Principal Father Emmanual Fazal OP St: Helen`s School and College, D.I Khan Vs The state and another.

JUDGMENT SHEET

IN THE PESHAWAR HIGH COURT, D.I.KHAN

BENCH/LABOUR APPELLATE TRIBUNAL

(Judicial Department)

L.A.No.01-D/2024 with C.M.No.63-D/2024.

Principal Father Emmanual Fazal OP St: Helen’s School and College, D.I.Khan Versus The State and another

JUDGMENT

For appellant: Mr. Ehsan-ul-Haq Malik, Advocate.

For respondents: Mr. Ghulam Muhammad Sappal, Addl: A.G. alongwith Muhammad Yaqoob, Labour Officer.

Date of hearing: 05.5.2026.

SADIQ ALI, J.- Through this consolidated judgment, I intend to decide the instant appeal bearing L.A.No.01-D/2024 as well as connected 15 appeals bearing L.A.No.02-D/2024 to L.A.No.16- D/2024, as all these appeals arise out of identical facts, involve common questions of law and are directed against similar orders each, dated 12.10.2024, passed by the learned Presiding Officer, Labour Court, D.I.Khan, whereby applications moved by the appellant for dismissal of complaints and discharge were declined. For convenience and brevity, facts are being taken from L.A.No.01-D/2024 titled “Principal Father

Emmanuel Fazal OP St: Helen’s School and College, D.I.Khan versus The State and another”.

2.Record reveals that respondent No.2, Deputy Chief Inspector Shops and Establishments, D.I.Khan, instituted complaint under Section 9(3) of the Khyber Pakhtunkhwa Minimum Wages Act, 2013, alleging violation of minimum wage provisions. Upon appearance before the learned Labour Court, the appellant moved an application seeking dismissal of complaint and his discharge mainly on the grounds that prosecution could only be instituted by an “Inspector”. School does not fall within the definition of “establishment”. The institution is a charitable and missionary institution and therefore exempt from operation of the Khyber Pakhtunkhwa Minimum Wages Act, 2013. Earlier similar complaint had already been dismissed by the Labour Court and attained finality, and lastly that the institution is a trans-provincial entity whose affairs fall exclusively within the jurisdiction of National Industrial Relations Commission (NIRC) under the Industrial Relations Act, 2012. The learned Labour Court, after hearing the parties, dismissed the application vide impugned order, dated 12.10.2024. Hence, these appeals.

3.Learned counsel for the appellant contended that the learned Labour Court failed to appreciate that the institution in question is functioning under the Diocesan Board of Education (DBE), Rawalpindi/Islamabad, which is a non-profitable and charitable missionary organization registered under the Societies Registration Act, 1860. It was argued that the institution is a trans-provincial entity having branches in different provinces and therefore Labour Court established under the Khyber Pakhtunkhwa Industrial Relations Act, 2010 lacked jurisdiction to entertain the complaint.

Learned counsel further argued that only National Industrial Relations Commission constituted under the Industrial Relations Act, 2012 could assume jurisdiction in the matter. It was also contended that the complaint itself was incompetent because the same had not been instituted by an “Inspector” as contemplated under law. Learned counsel lastly submitted that earlier similar proceedings had already been dismissed by the Labour Court and the said order having attained finality operated against institution of fresh proceedings on the same subject.

4.Conversely, learned Addl: A.G. assisted by Labour Officer supported the impugned orders and

argued that Deputy Chief Inspector was duly authorized under Government notification to conduct inspections and institute proceedings. It was further argued that labour welfare legislation enacted by the Province for protection and welfare of labourers/workers applies to all establishments operating within the Province and no exemption exists in favour of missionary or charitable institutions. It was further submitted that proceedings under the Khyber Pakhtunkhwa Minimum Wages Act, 2013 are distinct from proceedings under the Industrial Relations Act, 2012 and therefore the objection regarding exclusive jurisdiction of NIRC was misconceived.

5.Arguments heard and record perused.

6.The first objection raised by the appellant for dismissal of complaint relates to competency of Deputy Chief Inspector to institute proceedings under the Khyber Pakhtunkhwa Minimum Wages Act, 2013. In this regard, section 10 of the Khyber Pakhtunkhwa Minimum Wages Act, 2013 is relevant, which reads as under:-

“10. Inspector.---Government may, by notification in the official Gazette, appoint such persons of the Labour Department to be Inspector for the purpose of this Act as it may deem appropriate.”

A bare reading of the above provision shows that the Government has been vested with authority to appoint persons of Labour Department as Inspectors through notification in the official Gazette for purposes of enforcement of the Act.

The learned Labour Court while dealing with this objection specifically relied upon Notification No.SOL(LD)8-4/2019/Vol-I, dated 30.09.2019, and observed that Assistant Director/Deputy Chief Inspector had duly been authorized to conduct inspections in District D.I.Khan, Tank and South Waziristan. Once statutory authorization had been conferred through delegated notification, the objection regarding incompetency of Deputy Chief Inspector to institute complaint was without substance. The learned Labour Court, therefore, rightly rejected the said objection.

7.The second objection raised by the learned counsel for the appellant was that school does not fall within the definition of “establishment” under the relevant labour welfare legislation enacted for protection and welfare of labourers/workers. The contention too is devoid of force. Section 1(3) of the Khyber Pakhtunkhwa Minimum Wages Act, 2013 provides as under:-

“It shall apply to all industrial establishment and commercial establishment shops in the Province of the Khyber Pakhtunkhwa.”

Likewise, section 2(vi) of the Act defines “commercial establishment” in the following terms:-

“(vi) “commercial establishment” for the purpose of this Act, means an establishment in which the business of advertising, commission or forwarding is conducted, or which is a commercial agency, and includes a clerical department of a factory or of any industrial or commercial undertaking, the office establishment of a person who for the purpose of fulfilling a contract with the owner of any commercial establishment or industrial establishment, employs worker, a unit of a joint stock company, an insurance company, a banking company or a bank, a broker's office or stock-exchange, a club, a hotel, a restaurant or an eating house, a cinema or theater, private health centres, clinical laboratories, private security agencies, other establishment or class thereof which run on commercial and profit basis, and such other establishment or class thereof, as Government may, by notification in the official Gazette, declare to be a commercial establishment for the purposes of this Act:

Provided that relevant provisions of this Act shall also apply to the employees of societies registered under the Societies Registration Act, 1860 (Act No. XXI of 1860) and the Voluntary Social Welfare Organization.”

The above definition is quite comprehensive and expansive in nature. Particularly significant is the

proviso appended thereto whereby applicability of the Act has specifically been extended even to employees of societies registered under the Societies Registration Act, 1860 and voluntary social welfare organizations. Admittedly, the appellant himself claims that the institution is functioning under Diocesan Board of Education registered under the Societies Registration Act, 1860. Therefore, prima facie, the institution does not stand excluded from the operation of the statute; rather, the proviso reinforces applicability of the Act to such organizations.

8.The Khyber Pakhtunkhwa Minimum Wages Act, 2013 is a beneficial labour welfare legislation enacted to secure payment of minimum wages to employees and workers. Such welfare statutes are to be interpreted liberally so as to advance the object of the legislation instead of frustrating it through narrow and technical interpretation.

Whether the institution is functioning on charitable basis, whether employees/workers are engaged therein and whether it fully falls within statutory definition are all questions requiring evidence and cannot conclusively be determined at preliminary stage merely on assertions made in the application for dismissal of complaint. The learned Labour

Court, therefore, rightly declined to dismiss the complaint on this ground at threshold.

9.Another objection raised by the appellant was that earlier similar complaint had been dismissed by the Labour Court and therefore fresh proceedings were not maintainable. This contention too does not advance the case of the appellant.

Violations relating to labour rights and minimum wages may furnish separate cause of action depending upon the facts and period involved.

Moreover, an erroneous assumption of law in earlier proceedings, if any, cannot perpetuate illegality or oust jurisdiction conferred by statute.

Therefore, the learned Labour Court rightly refrained from dismissing the complaint on such preliminary objection.

10.The foremost contention of the learned counsel for the appellants is regarding lack of jurisdiction of the Labour Court on the premise that the institution is a trans-provincial establishment and, therefore, only NIRC established under the Industrial Relations Act, 2012 could entertain the matter. The said contention, though attractive at first glance, is legally misconceived and without substance. The complaints in question were

admittedly instituted under section 9(3) of the Khyber Pakhtunkhwa Minimum Wages Act, 2013.

The controversy, therefore, pertains to enforcement of minimum wages legislation and not to adjudication of an industrial dispute, unfair labour practice, collective bargaining issue or grievance petition under the Industrial Relations Act, 2012.

The distinction between the two statutory regimes is significant and cannot be ignored. The learned Labour Court while rejecting the application specifically observed that the Khyber Pakhtunkhwa Minimum Wages Act, 2013 does not create any distinction between workers employed in provincial establishments and those employed in trans-provincial establishments. The said observation is legally sound and fully supported by precedent. In this regard, reference may beneficially be made to the case titled “Telenor Pakistan (Pvt.) Limited versus Presiding Officer, Labour Court and others” reported as 2019 PLC 240, wherein the Honourable Peshawar High Court (Abbottabad Bench) exhaustively examined the question whether labour and wages legislation enacted by the Province would apply to trans- provincial establishments. The Court held that jurisdiction of Labour Court/Wages Authority

extends to all industrial and commercial establishments situated within the territorial jurisdiction of the Province and trans-provincial establishments have not been excluded from the operation of such labour welfare laws. The relevant observations of the learned High Court are reproduced as under:

“The purpose of referring to the above provisions of law is mainly aimed that the jurisdiction of the wages Court has been extended to all the industrial and commercial establishments constituted in the province of Khyber Pakhtunkhwa and in the PWA of 2013 the trans-provincial establishment, as defined in the IRA, 2012, have not been excluded.”

The learned Court further held that the argument that after promulgation of Industrial Relations Act, 2012, the jurisdiction of Provincial Labour/Wages Courts stood completely ousted, was misconceived because labour welfare legislations enacted by Provinces continue to hold the field and operate independently in their own sphere. The Court observed:

“The argument that after the promulgation of IRA, 2012, the jurisdiction of the wages Court has been completely ousted is misconceived because the Payment of Wages Act, 1936 still hold the field, besides every province has promulgated its own law and both these legislation are not in any manner overriding or contradicting each other.”

Though the aforesaid judgment pertained to Khyber Pakhtunkhwa Payment of Wages Act, 2013, yet the principle laid down therein squarely applies to proceedings under the Khyber Pakhtunkhwa Minimum Wages Act, 2013 because both statutes are labour welfare legislations enacted by the Province to secure statutory rights of workers/employees within the Province.

11.The aforesaid principle has also subsequently been elaborately examined by the Honourable High Court of Sindh, Karachi in Constitutional Petition No.S-731 of 2021 titled “MCB Bank Limited versus Zahid Ali”, decided on 30.05.2023, wherein the question before the learned Court was whether a trans-provincial organization could be subjected to provincial labour welfare legislation relating to payment of wages. The learned Sindh High Court, after extensively examining Articles 97, 137, 141 and 142 of the Constitution of the Islamic Republic of Pakistan, 1973, as well as the judgment of the Honourable Supreme Court of Pakistan in “Sui Southern Gas Company Limited versus Federation of Pakistan” (2018 SCMR 802), held that labour welfare legislation concerning payment

of wages falls within the legislative competence of the Province and merely because an entity is trans- provincial does not automatically oust applicability of provincial labour legislation. The learned Sindh High Court observed that after the Eighteenth Constitutional Amendment, the field relating to labour welfare and payment of wages stood devolved to the Provinces and no legislative field relating to payment of wages remained in the Federal Legislative List. The Court specifically held that the determining factor is not whether the employer is a trans-provincial entity, but whether the subject matter of legislation in its application travels beyond territorial limits of the Province.

The Court concluded that payment of wages arising out of employment within a Province remains subject to Provincial labour legislation even if the employer operates across Pakistan. The relevant observations are reproduced as under:- “In relation to any company, the Sindh Act applied to all the workers but only to those workers who are in this Province. In other words, it is irrelevant whether the registered office or the industrial undertaking of the company is located. It is equally irrelevant whether the company is trans-provincial or not. The focus of the Act must be on the workers alone and nowhere else.”

The learned Court further held:-

“To my mind payment of wages that are made as between an employer and an employee are in respect of a service agreement... this to my mind would not take away from the fact that the employer had employed an employee to serve primarily at a designated place and which being at a single place the application of the payment of wages cannot be considered “in its application” to travel beyond the territorial boundaries of the Province so as to oust the legislative competence of the Province to regulate that activity.”

The learned Sindh High Court ultimately concluded that Provincial Authority under the Payment of Wages Act possessed lawful jurisdiction notwithstanding the fact that the employer was admittedly a trans-provincial bank operating throughout Pakistan. The petition challenging jurisdiction was accordingly dismissed.

The ratio decidendi of the aforesaid judgment fully supports the proposition that Provincial labour welfare legislation concerning payment of wages/minimum wages applies to employees working within the Province irrespective of the trans-provincial status of employer.

12.The reliance placed by the appellant upon the concept of trans-provincial establishment under Industrial Relations Act, 2012 is therefore misplaced. Merely because an institution has branches in more than one province does not

automatically oust applicability of Provincial labour welfare legislation governing payment of wages and minimum wages within territorial jurisdiction of the Province. The learned Labour Court examined each objection raised by the appellant in the application for dismissal of complaint and assigned sound, lawful and convincing reasons while rejecting the same. No illegality, jurisdictional defect, misreading or non- reading of record has been pointed out warranting interference by this Tribunal in appellate jurisdiction.

13.It is a settled principle of law that labour welfare statutes are social beneficial legislations and are required to be interpreted liberally in favour of employees and workers so as to advance the object of the legislation rather than frustrate it through technical objections. Acceptance of the objections raised by the appellant at the threshold would defeat the very purpose of minimum wage legislation and would unnecessarily shut the door of statutory remedy available to employees/ workers. The judgments reported as 2019 PLC 240 and Constitutional Petition No.S-731 of 2021 decided by the Honourable High Court of Sindh, Karachi, fully answer the jurisdictional objection

raised by the appellant and clearly affirms that Provincial labour/wages legislation applies to establishments operating within the Province, including trans-provincial establishments, unless specifically excluded by law. No such exclusion has been pointed out in the Khyber Pakhtunkhwa Minimum Wages Act, 2013.

14.For what has been discussed above, I am of the considered view that the learned Labour Court committed no illegality while rejecting the applications for dismissal of complaints and discharge of the appellant. The impugned orders, dated 12.10.2024, are fully in accordance with law and do not call for interference by this Tribunal.

Consequently, all these appeals being devoid of merit are hereby dismissed. The learned Labour Court shall proceed with the complaints strictly in accordance with law without being influenced by any observation made herein touching upon merits of the controversy.

Announced.

Dt:05.5.2026. -Sd/- Imran/*

JUDGE

Labour Appellate Tribunal

(S.B)

Hon”ble Mr. Justice Sadiq Ali