Managing-Director, Saydon Pharmaceutical Industries Pvt Ltd, Peshawar Vs Sadiq Niaz Khan, etc

IN THE PESHAWAR HIGH COURT,

BANNU BENCH

(Judicial Department)

WP No.499-Bl2026

Managing-Director, Saydon Pharmaceutical Industries Private (Ltd), Peshawar, etc.

Vs Sadiq Niaz Khan, etc.

JADGMENT

Date of hearing: 10.08.2026

For petitioner(s): Mr. Rooh Ullah Shah Advocate MTIIIAMMAD TARIO AFRIDI. J.- Through the instant writ petition, filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, I 973, the petitioners have called in question the legality and propriety of the judgment dated 20.05.2026 passed by the Labour Court, D.I.Khan, Camp Court at Bannu, whereby the appeal preferred by the petitioners against the order dated 15.07.2025 passed by the Commissioner for Workers' Compensation / Authority under the Khyber Pakhtunkhwa Workers' CompenSation Act,2013, at Bannu, was dismissed and the said order, whereby the claim petition of respondent No. 1 was partially allowed to the extent of Rs.561,745l-, was maintained.

2.Briefly stated, the facts leading to the institution of the present writ petition are that respondent No.l, Sadiq Niaz Khan, filed a claim petition before the Commissioner for Workers' Compensation/Authority under the Khyber Pakhtunkhwa Workers' Compensation Act,2013, at Bannu, seeking recovery of Rs.1,789,800/-, comprising Rs.44,2001- as one month's salary, Rs.44,2OOl- as one month's notice pay, Rs.751,400/- as gratuity

for 17 years of service, and Rs.950,000/- as profit share, besides clearance of his EOBI dues. It was averred that respondent No.1 was appointed by the petitioners-company, namely, Saydon Pharmaceutical Industries (hrt.) Ltd., as Territory Manager vide appointment letter dated 25.09.2006 with effect from 09.06.2006, and was posted at Bannu, where he performed his duties diligently and contributed towards the promotion of the Company's business and enhancement of its profits. It was further averred that, owing to his satisfactory performance and achievement of the targets assigned to him, respondent No.l was subsequently promoted to the position of Senior Territory Manager (STM). It was contended that after rendering approximately 17 years of service, the petitioners compelled the respondent No.l to tender his A resignation on 10.10.2023. It was claimed that, despite cessation d of his service, the petitioners allegedly failed to pay his outstanding dues, including one month's salary, one month's salary in lieu of notice, $atuity and profit share, and also failed to clear his EOBI dues. Consequently, an amount of Rs.1,789,800/- was claimed to be payable to respondent No.1, which the petitioners-company had illegally and unlawfully withheld. The respondent thus filed the claim petition seeking recovery of the aforesaid amount and clearance of his EOBI dues.

3.On being summoned, the petitioners appeared and submitted their reply. Although, they admitted the appointment of respondent No.1 but denied his entitlement to the relief sought. After recording the evidence and hearing the parties, the claim petition was partially allowed vide order dated 15.07.2025, holding respondent No.l entitled to gratuity for 17 years of service at the notihed rate of Rs.32,000/- per month, amounting to Rs.5,44,000/-, along with Rs.17,7451- on account of outstanding expenses for the months of September and October, 2023. His total entitlement was thus determined at Rs.5,61,745l-, whereas the remaining claims were refused. Feeling aggrieved, the

petitioners preferred an appeal against the said order. However, the appeal was dismissed by the Labour Court, D.LKhan, Camp Court at Bannu, vide judgment dated 20.05.2026. Hence, this petition.

4.Arguments heard. Record perused.

5.There is no denial of the fact that respondent No.1 was appointed as Territory Manager vide appointment letter dated 25.09.2006. It is also not in dispute that the respondent was later promoted as Senior Territory Manager. It is an established fact that the respondent was posted at Bannu, where he performed his duties for nearly seventeen (17) years, promoting and selling the products of the petitioners-company in accordance with his job description. This established the relationship of employer and employee between the parties. The record further reveals that the ? respondent tendered resignation on 10.10.2023, which was accepted by the petitioners-company with immediate effect. It is also undisputed that the petitioners-company did not pay any terminal service benefits to respondent No.l .

6.The foremost contention raised by learned counsel for the petitioners is that the Authority under the Khyber Pakhtunkhwa Payment of Wages Act, 2013 at Bannu lacked territorial jurisdiction, because the petitioners-company was registered at Peshawar and Clause G(5) of the appointment letter specifically contained a clause restricting disputes to Courts functioning at Peshawar. This argument is misconceived. Under Section 15(l) of the Khyber Pakhtunkhwa Payment of Wages Act, 2013, the Authority notified for a particular local area is empowered to adjudicate all claims arising out of less payments, deductions from the wages or non-payment of dues relating to provident fund or grafurty, bonus, overtime, leave encashment, notice pay or travelling allowance and other emoluments payable under any law or delay in payments of wages of persons employed or paid in that

axea. The petitioners remained unable to produce any material demonstrating that the Authority at Bannu lacked jurisdiction to entertain the claim. Furthermore, Section 23 of the said Act declares void any contract or agreement whereby an employed person relinquishes rights conferred by the statute. Since respondent No.1 was posted and performed his duties at Bannu, the Authority at Bannu rightly assumed jurisdiction. The contractual clause contained in the appointnent letter cannot override the jurisdiction conferred by law.

7.The next contention advanced by the leamed counsel is that respondent No.l , having served as Territory Manager and subsequently promoted as Senior Territory Manager, did not fall within the statutory definition of a "worker" and was, therefore, not entitled to gratuity or other terminal benefits. This argument is equally not tenable. Section 2(l)(n) of the Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Orders) Act, 2013, defines a "worker" as any person employed in an industrial or commercial establishment to perform skilled or unskilled, manual or clerical work for hire or reward, and includes permanent, probationer, temporary, apprentice and contract workers. The mere nomenclature of the respondent's designation could not, by itself, determine his status, rather the true nature of the duties actually performed by him was decisive. His functions relating to the promotion and sale of the petitioners-company's products within the assigned tenitory were essentially commercial in nature and fall within the ambit of a "commercial establishmenf' as defined in Section 2(1)(b) of the Act ibid.

8.Furthermore, Standing Order 1(b) defines a "permanent worker" as one engaged in work of a permanent nature likely to last more than niqe months and having satisfactorily completed the prescribed period of probation. Respondent No.1, having continuously served for approximately seventeen (17) years in the

commercial establishment of the petitioners-company, squarely qualified as a permanent worker within the contemplation of the aforementioned provision of law. Consequently, the fora below rightly extended to him the protection of the Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Orders) Act, 2013, including the benefit of gratuity under Standing Order

9.The question ofgratuity calculation has also been raised by the petitioners, who contend that it ought to have been determined on the basis ofthe respondent's last drawn salary ofRs.18,500/- per month. This contention is devoid of merit. Under Standing Order 17(6) of the Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Orders) Act,2013, a worker who resigns or whose services are terminated for reasons other than misconduct id entitled to gratuity equivalent to thirty days' wages for every completed year of service, calculated in the case of fixed-rated worker, on the basis of the wages admissible to him during the last month of service. The record, however, demonstrates that the last drawn salary of the respondent was below the minimum wage notified by the Government.

10.In this regard, Section 9 of the Khyber Pakhtunkhwa Minimum Wages Act, 2013 categorically prohibits payment of wages at a rate lower than the minimum rate declared under the Act. Record shows that the Govemment of Khyber Pakhtunkhwa, through notification dated21.09.2023,fxed the minimum wage at Rs.32,000/- per month. Therefore, any calculation of gratuity must necessarily be based upon the statutory minimum wage, as payment below that tlreshold is impermissible in law. The Authority, by applying the notified minimum wage for the purpose of gratuity, acted strictly in accordance with the statutory mandate, and the Labour Court rightly affrmed its determination.

11.As regards the argument that gratuity does not form part of "wages" within the meaning of Section 2(xiv)(d) of the Khyber Pakhtunkhwa Payment of Wages Act,2013 and, therefore, the Authority lacked jurisdiction to adjudicate such a claim. This contention is also misconceived for the reason that although, gratulty payable upon discharge is excluded from the definition of "wages" for certain purposes, the scheme of the law makes it clear that claims relating to gratuity fall within the jurisdiction of the Authority. Section l5(1) of the Payment of Wages Act, 2013 expressly empowers the Authority to hear and decide claims arising out of less payment, deductions from wages, or non-payment of dues relating to provident fund, gratuity, bonus, leave encashment, notice pay or travelling allowance. Moreover, Standing Order 17(6) of the Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Orders) Act,2013 creates an independent statutory entitlement to gratuify for every completed year of service, where a worker resigns or his services are terminated for reasons other than misconduct. The Authority was, therefore, fully competent to adjudicate the respondent's claim for gratuity.

12.The petitioners also disputed the findings, whereby the respondent No.1 was awarded Rs.17,7451- on account of outstanding expenses for September and October, 2023. The record demonstrates that, in addition to his fixed salary, the respondent was entitled to reimbursement of certain contingent expenses incurred in the discharge of his duties. The salary and expense sheets produced by the petitioners-company clearly reflect that although, the salary component had been paid, the approved expenses remained outstanding. It is significant to note that under Section 2(xiv) ofthe Khyber Pakhtunkhwa Payment of Wages Act, 2013, "wages" include all remuneration capable of being expressed in terms of money, together with statutory and non-statutory allowances and any additional remuneration payable

under the terms of employment. Although, the statute excludes travelling allowance or sums paid to defray special expenses from the definition of wages, the record in this case established that the outstanding amount represented approved and admissible expenses which had abeady been sanctioned by the employer but not disbursed. The fora below, therefore, rightly treated the unpaid sum as part of the respondent's lawful dues and directed its payment.

13.It is a well settled exposition of law that the writ jurisdiction of this.Court under Article 199 of the Constitution is supervisory in nature and is not to be exercised as a substitute for appellate jurisdiction. Interference is warranted only where the impugrred orders suffer from jurisdictional defect, perversity, or patent illegality. In the present case, both the Authority under the Khyber Pakhtunkhwa Payment of Wages Act, 2013 and the Labour Court have concurrently recorded findings of fact, frmly rooted in the statutory provisions and supported by the material available on the record. No perversity, illegality, or jurisdictional defect has been demonstrated.

14.Finding no merit in this writ petition, the same IS accordingly dismissed in limine.

ilL Announced

(Ghafoor Zaman) l4

JUDGE

Date of hearing and announcement of judgment ... ... . . . ... ... .. . . ...... 10.08.2026 Date of preparation and signing of judgment............ .. ............27.08 2026

(S.B.) Hon'ble Mr. Justice Muhammad Tariq Afridi