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Petitioner: M/s. Sui Southern Gas Company Limited, etc VS Respondent: Federation of Pakistan
Court Name: Supreme Court of Pakistan Judge(s): Sajjad Ali Shah, Mushir Alam, Mian Saqib Nisar Title: M/s. Sui Southern Gas Company Limited, etc vs Federation of Pakistan Case No.:Civil Appeals Nos. 1583 to 1598 of 2014, 970 and 971 of 2013, 4, 5, 606 and
JUDGMENT
Reported As: 2019 P.S.C. 282, 2018 P.S.C. 1020, 2018 PLC (C.S.) 846 Result: Appeal dismissed Judgment JUDGMENT MIAN SAQIB NISAR, CJ. --- These appeals with the leave of the Court vide orders dated 5.9.2013 (C.As. No, 970 & 971 of 2013), 27.11.2014 (C.As. No, 1583 to 1598 of 2014), 8.1.2015 (C.As. No, 4 & 5 of 2015), 30.6.2015 (C.A. No, 606 of 2015) and 4.11.2015 (C.A. No, 1152 of 2015) and petition (C.P. No, 2154-L of 2014) entail the common question of law thus are being disposed of through this common judgment. 2. The Islamic Republic of Pakistan is a democratic State (Federation) with its Federating Units (Provinces) and the Constitution of the Islamic Republic Pakistan, 1973 (Constitution) recognizes and creates a balance between the authority of the Federation and the autonomy of the Provinces, which recognition has been given an iron cladding by virtue of the Eighteenth Amendment, passed vide the Constitution (Eighteenth Amendment) Act, 2010. This Amendment to the Constitution has inter alia introduced a drastic enhancement in the legislative authority of the Provinces by deleting the Concurrent Legislative List (CLL), whereby previously both the Parliament and the Provincial legislatures could legislate on the subjects enumerated therein. The omission of the CLL, left only a single Legislative List in the Constitution which exclusively list subjects that can be legislated upon by the Parliament alone, and by virtue of Article 142(c) of the Constitution any subject not enumerated in these two lists would subject to the Constitution, be within the legislative competence of the Provinces. Entry No, 26 of the erstwhile CLL contained the subjects of "welfare of labor; conditions of labor, provident funds; employer's liability and workmen's compensation, health insurance including invalidity pensions, old age pensions", whereas, Entry 27 of the same
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dealt with the subjects of "trade unions; industrial and labor disputes". Thus, prior to Eighteenth Amendment, the subject of labour and trade unions were in the domain of both the Parliament as well as the Provincial Assemblies. The labour laws enacted by the Parliament which were applicable in the Federation as well as the Federating Units. However, after the Eighteenth Amendment, the Parliament enacted the Industrial Relations Act, 2012 (IRA 2012) which was challenged before the concerned High Courts (all the provincial High Courts as also the Islamabad High Court) mainly on the ground that the same is incompetently enacted by the Parliament as the subject of labour and the trade unions was no more in the legislative domain of the Parliament rather within the domain of the Provincial Assemblies. All the High Court's held (through judgments impugned herein as also other judgments) in favour of the constitutionality/validity of the IRA 2012. The factual background as also the questions of law raised in the impugned judgments are as follows:-- CA. 970/2013, against order of High Court of Sindh dated 29.10.2010 passed in C.P. No, 1796D/2010 (2011 PLC 105) The learned High Court of Sindh was faced with the question whether Shaheen Air Port Services, is a charitable organization on the basis of being part of Shaheen Foundation which is a charitable trust set up by the Government of Pakistan, and thus whether a charitable organization fell within the ambit of the Industrial Relations Ordinance, 1969 and whether the same was operative in the interregnum of the lapse of the IndustriaI Relations Act, 2008 on 30.4.2010 (as per Section 81(3) of the said Act) which question, the learned High Court answered in the affirmative, holdingthat the Industrial Relations \ Act 2008/Industrial Relations Ordinance 1969 being Federal law was applicable to Shaheen Airport Services as the same was operative in more than one Province and that Shaheen Airport Services did not qualify as a charitable organization in view of the activities that were entailed in the operation of its business. Another question involved therein was that after the Eighteenth Amendment, whereby Entries No, 26 and 27 occurring in the CLL have been deleted, whether the Industrial Relations Ordinance, 1969 has become ultra vires of the Constitution for the reason that power to legislate on the subject no more existed with the Federal Legislature, the Court held that if a Trade Union has membership in more than one Provinces, merely because Entries No, 26 and 27 have been deleted, the jurisdiction of the Parliament to legislate in respect of situations services and items which fall within the inter Provincial trade, did not cease to exist. CA. 1583/2014, against order of High Court of Sindh dated 4.8.2014 passed in C.P. No, 304D/2012 (PLD 2014 K 553) The learned High Court while considering the question as to whether the IRA 2012 is ultra vires of the Constitution, held that while there is no doubt that the Eighteenth Amendment resulted in the deletion of the CLL, some room for concurrent legislation by both the Parliament and Provincial Assemblies was retained in Article 137 of the Constitution. Moreover, the IRA 2012 aimed at protecting the Fundamental Right of the citizens to form association provided under Article 17 and since Article 141 of the Constitution is clear that Provinces cannot legislate on matters beyond their territorial boundaries, it is imperative that the Federation steps into and protects such right of workers/employees who wish to form inter-provincial trade unions/associations, which resolve is further solidified with Articles 2A and 8 of the Constitution which emphasize the protection of the fundamental rights and relied upon the judgment reported as Pakistan Muslim League (N) v. The Federation of Pakistan (PLD 2007 SC 642) and the Indian judgment of Elel Hotels and Investment Ltd. etc. v. Union of India (AIR 1990 SC 1664) that advocates a liberal construction of the constitutional legislative lists. Thus, holding the IRA intra vires of the Constitution, the learned High Court held that there is no overlap in the Provincial and Federal law since the IRA 2012 applies to inter-provincial establishments and its workers/employees, whereas the Sindh Industrial Relations
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Act, 2013 applies to establishments functioning only within the Province of Sindh. C.A. No, 4/2015, against order of Islamabad High Court dated 3.12.2014 passed in W.P. No, 4626/2014 The dispute before the learned Islamabad High Court involved the employees of the SME Bank Limited, having its Branches throughout the Country i,e, in the Provinces of Punjab, Sindh, KPK and Balochistan, and also the Islamabad Capital Territory, who hired employees on contract basis who had thereafter been working for the said Bank for periods of 2 to 13 years and terminated them. The Bank contested the grievance notice of these employees contending that a fresh grievance notice should have been sent to the Bank under the Industrial Relations Act, 2002 (the prevailing law at the time) which contention was not accepted by the learned High Court which finding is contested inter alia in the present application before this Court. C.A. No, 606/2015, against order of High Court Sindh dated 18.3.2015 passed in CP No, 4154D/2013 The Sindh Labour Appellate Tribunal directed that the grievance petition filed by the worker/employee ought to be heard by the NIRC constituted under the IRA 2012. Being aggrieved, the Bank challenged the said order through a petition under Article 199 of the Constitution on the ground that the grievance petition had to be filed with concerned Labour Court constituted under the relevant provincial statute i,e, the Sindh Industrial Relations Act, 2013 as the matter did not lie under the IRA 2012. The High Court held that since the IRA 2012 applied to the present case, the proper forum was NIRC under the said Act and not the Labour Court set up under provincial legislation. C.A. No, 1152/2015, against order of Peshawar High Court dated 9.6.2015 passed in W.P. No, 634-- P/2015 (2016 PLC 279) The petitioner therein filed grievance petition before the Labour Court, Haripur which was remitted to NIRC, Peshawar Bench. During the proceedings the right of cross-examination was struck off, against which, the Bank filed a writ petition, however, in the meantime, NIRC accepted the grievance petition, consequently the writ petition was withdrawn., The appeal filed before the Full Bench of the NIRC Islamabad was dismissed and the said order was assailed through another writ petition. The learned Peshawar High Court held that the allegation that the grievance petition, of the petitioner (in the High Court) was not maintainable before the NIRC was ill-founded, thereby declaring that the NIRC was competent and the IRA 2012 was applicable to the Meezan Bank, Limited (which is a trans-provincial establishment). C.P. No, 2154/2014, against order of Lahore High Comfit dated. 17.1.1.2014 passed in Review Application No, 93/2012 The grievance petition filed by the worker was dismissed by the Labour Court on the ground that the IRO is not applicable to Shaheen Airport Service. The appeal was allowed and the matter was remanded, but the learned Lahore High Court in a writ petition directed that as the identical issue was pending before this Court the Labour Court would not proceed further till the decision of that matter (CP No, 11/2011). The review petition against that order was dismissed in light of the identical matter pending before this Court concerning the question as to whether, post the Eighteenth Amendment, the petitioner's case would fall under the provincial law i,e, the Punjab Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 or the Federal law i,e, the Industrial Relations Ordinance 1969 or Industrial Relations Act, 2008. There are some other cases wherein the vires of the Industrial Relations Ordinance, 2011 (IRO 2011) and IRA 2012 have been considered by the High Courts but the same are not subject-matter of these appeals/petition. The factual background as also the questions of law raised therein are as follows: Order of Lahore High Court dated 13.3.2012 passed in Writ Petitions No, 24691 to 24695 of 2011 (2012
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PLC 219) The NIRC through order dated 19.8.2011 directed to suspend the proceedings before the learned Labour Court. The vires of IRO, 2011 was challenged through writ petitions on the ground that after abolition of CLL by means of Eighteenth Amendment, the subject of labour became the provincial subject and as such the President of Pakistan had no powers to promulgate the IRO 2011. On the basis of Entries No, 3, 32 and 59 of Part-I of the FLL, the IRO 2011 was declared to be intra vires of the Constitution. Order of Islamabad High Court dated 27.6.2012 passed in Writ Petition No, 3472/2011 The learned High Court declared the IRO 2011 to be intra vires of the Constitution on the basis of Entries No, 3 and 32 of Part-I in the FLL. Order of High Court of Balochistan dated 26.6.2014 passed in C.P. No, 226/2012 (2014 PLC 351) While considering the vires of the IRA 2012, the Court held that the IRA 2012 was properly enacted by the Parliament and is not ultra vires the Constitution, therefore, the IRO 2012, which was succeeded by the IRA 2012, cannot be categorized as being unconstitutional. 4. Heard the learned Counsel for the parties and perused the impugned judgments with their able assistance. For brevity, the respective arguments of the learned counsel for the parties are not cited separately, which shall be considered and dealt with hereinafter in our detailed discussion on the questions so formulated. From the pleadings/arguments of parties, the following common questions of law emerge for determination of this Court: (a) Whether the promulgation of the Industrial Relations Act, 2012 was ultra vires of the Constitution by reason of encroaching upon the legislative authority of the Provinces under Articles 141-144 of the Constitution? (b) What is the extent of legislative competence of the federal and provincial legislatures and whether a provincial legislature has extraterritorial jurisdiction? (c) Whether there is an overlap in the legal remedies/forums available to the employees/workers who are employed in companies/ corporations/ institutions/ establishments in more than one Province and what is the precise scope of jurisdiction of the National Industrial Relations Commission (NIRC) formed under Section 35 of the IRA 2012 for inter-provincial/trans-provincial labour and trade disputes? (d)What is the precise scope of jurisdiction of the National Industrial Relations Commission (NIRC) formed under Section 25 of the Industrial Relations Act, 2008 in the interregnum till the IRA 2012 was not enacted for intra-provincial labour and trade disputes? 4. The case of the appellants/petitioners can be summarized as under: (1) That by means of the Eighteenth Amendment to the Constitution the CLL under which both the Parliament and Provincial Legislatures had jurisdiction to legislate on the subjects enumerated therein was abolished, as such, the matters .previously covered. under Entries No, 26 and 27 thereof were no longer under the legislative domain of the Parliament, because under Article 142(c) of the Constitution, the legislative competence of the Federal Legislature is restricted only to the subjects that are enumerated in the Federal Legislative List (FLL) and the legislative competence of the Provincial Legislatures have exclusive jurisdiction to make laws on all residuary subjects. Further, under Article 144 (1) of the Constitution the Parliament can also legislate on any matter not enumerated in the FLL only in the eventuality if one or more Provincial Assemblies pass a resolution to that effect. Therefore, prior to promulgation of the IRA 2012 it was necessary that all the four. Provincial Assemblies should have passed the resolutions authorizing the Parliament to regulate by law the subjects that are covered by it, but the said provision of the Constitution was not resorted to. In the case of Air League of PIAC Employees through President v. Federation of Pakistan M/O Labour and Manpower Division Islamabad and others (2011 SCM R 1254) this Court has held that the Federal Government has no power to legislate on the subject of labour welfare and trade unions,
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which subjects, after the Eighteenth Amendment have devolved upon the Provinces, which judgment under Article 189 of the Constitution is binding on all Courts in Pakistan. Thus, the IRA 2012 is not valid law. It was also the case of the appellants/petitioner that the IRA 2012 cannot be validated on the basis of Entry No, 3 of the FLL on the ground that it is intended to discharge obligation under the International Treaties and Conventions such as the ILO Conventions No, 87 and 98, especially when the Provincial Legislatures have already made the laws on the subjects covered by it (IRA 2012). Further, by means of the IRA 2012 a parallel legal forum in the shape of NIRC established under it (IRA 2012) alongside the Labour Courts established under the Provincial laws has been created which has resulted in a confusion with regard to the relevant forum to be approached. (2) That since the promulgation of the Government of India Act, 1935 till the Constitution of 1973, the subject of trade unions and workers welfare has consistently never ever been in the Federal sphere of legislation. The Parliament, through the Eighteenth Amendment, with a deliberate and conscious decision, enhanced the quantum of provincial autonomy by abolishing the CLL, which can be said to be one of the most important phases in the constitutional history of Pakistan; however, the learned High Courts have validated the Federal laws as if it had never taken place and the fact of the devolution of powers has been sidelined and treated as inconsequential. In fact. the upholding the federal law means an increase in the legislative power of the Federation and reduction in the legislative power of the Provinces, which is against the intent of the Eighteenth Amendment: (3) That the learned High Courts have unanimously saved the Federal laws by interpreting different entries of the FLL on the tacit assumption that there never was any entry relating to trade unions and labour welfare. Various other entries have been stretched to include trade unions and workers welfare while disregarding the basic fact that this subject was previously the subject-matter of Entries No, 26 and 27 of the CLL which have now been omitted i,e, transferred exclusively to the Provincial sphere. It is obvious that entries should be construed while taking an overall view of the contents thereof and not in isolation as if the other entries have never existed in the first place. The fact that the upholding the Federal legislation necessarily means invalidating and striking down either full or certain provisions of all four provincial Acts (Provincial Industrial Relation Acts). In fact, the findings of the learned High Courts appear to be on the basis that there is a vacuum in the law, which in fact was not there, as all the four Provincial legislatures had enacted laws providing an alternate route. (4) There is no bar on a Provincial legislature to make trans-provincial legislation. Therightsof the labourers/workers are better protected through having Province-wide trade unions rather than trade unions which are operating at the Federal level or in other provinces and can only be given relief by a single body, namely the NIRC. Further, Article 17 of the Constitution does not contemplate the necessity for nationwide trade unions. If the Provincial legislatures, considered that a nationwide trade union was beneficial they could have provided for the same through the constitutional mechanism provided by Article 144 of the Constitution, by authorizing the Federal legislature to legislate on this subject. They have, however, in their legislative wisdom, consciously decided not to do so. It is a legislative policy matter on which the concerned legislatures shall be allowed to decide and the learned High Courts ought not to interfere therein. (5) As per the definitions of terms 'employer', 'establishment', 'industrial dispute' and 'industry' contained in the Provincial law of Sindh, every commercial entity, whether it is operating on a trans-provincial basis or on a provincial basis, irrespective of the fact as to whether it has certain employees in other Provinces apart from Sindh would be covered by the Sindh Industrial Relations Act, 2013 (SIRA 2013). However, the Federal Act (IRA 2012), as interpreted by the High Courts excludes in totality the jurisdiction of the Provincial Labour Courts with regard to the trade unions operating for and in relation to any company operating in Sindh which has branches in other Provinces.
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Therefore, this was not a case of vacuum which the Federal law, by referring to the so-called trans- provincial trade unions had filled in. In fact, it was a blatant usurpation of Provincial autonomy by the Federal Government and deprivation of the jurisdiction of Provincial Labour Courts by limiting their jurisdiction only to those companies which do not have branches in other Provinces. (6) In terms of Section 3 of the SIRA 2013, which deals with trade unions and freedom of association, it is specifically provided that workers, without any distinction whatsoever, shall have the right to establish and join trade unions of their own choice. With the Federal law, this Section has been reduced in its scope and ambit and will now apply to only those companies which do not have branches in other Provinces. There is no justification whatsoever for this arbitrary deprivation of the rights of workmen in Sindh merely because the company for which they work has branches in different Provinces. Likewise, the scope of Sections 17, 34 and 45 of the Act has also been reduced; inasmuch as, the right of workmen to take a local dispute before a local Court has been infringed. (7) There is a critical distinction between legislative competence and fundamental rights. Insofar as the question of legislative competence is concerned the same is governed by the Article 142 of the Constitution and the Articles relating to fundamental rights are irrelevant in this regard. The fundamental rights are the rights conferred on citizens of Pakistan and have nothing whatsoever to do with legislative competence, which is a totally different concept. The learned High Courts have not only mixed together these two conceptually distinct and disparate aspects of constitutional interpretation but also the concept of legislative competence has been subordinated to the concept of fundamental rights. This has been done on the assumption that a trans-provincial trade union is desirable. Article 7, together with Article 8 of the Constitution controls all the fundamental rights. These Articles clearly lay down restrictions upon the "State"; a restriction from passing a law in violation of the fundamental rights. The definition of State includes both the Federal as well as the Provincial organs of the State. The framers of the Constitution, irrespective of the question of legislative competence, which has to be determined under Article 142 ibid, stipulated that a violation of fundamental rights, either by the Federal or by the Provincial legislatures would be illegal. (8) The learned Baluchistan High Court, upheld the Federal Legislation by relying upon the interpretation of US Supreme Court, whereby the Entry relating to "commerce" in the US Constitution has been stretched to include trade unions and workers welfare, so by means of a similar process, the Entry relating to commerce contained in Entry No, 27 of Part-I of the FLL in our Constitution, may also be so structured. While holding so, the learned High Court has ignored the fact that the entries in the US Constitution are very brief, as against it, the Constitution of Pakistan set out at great length and detail various topics which form the subject-matter of the jurisdiction of the different legislatures, and previously certain entries (Entries No, 26 and 27) of the CLL were dealing with these subjects but were abolished and no corresponding entry was included/inserted in the FLL. Further, the US Supreme Court is unique in the western world as being the only openly politicized judicial institution; whereas, the Pakistan Supreme Court is a far better judicial model, therefore, in these circumstances, interpretation given by the .US Supreme Court should not be followed by this Court irrationally. (9) The learned High Courts have held that a Provincial legislature does not have the power to pass laws in relation to companies which operate in more than one province. There is nothing on the Constitutional plane preventing the Provincial Legislature from passing a law in relation to trade unions and workmen, which would make it compulsory and mandatory for each company to allow all its employees, no matter where they are working, to become members of a trade union. Thus, a company incorporated in one Province and having its head office therein and a branch office in other Province can allow all its workmen to be members of a single union. There is nothing unconstitutional or illegal about it, as all the workers can be subjected to the laws of the said
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Province. Since the large companies usually have branches in different Provinces e.g. all major banks and other corporate entities such as PIA, it is obvious that the jurisdiction and legislative competence of the Provinces has been curtailed by the learned High Courts. Even otherwise, having different trade unions operating in different Provinces will cause no harm and detriment to the workmen. It is not obvious that the interest of the small minority of workmen in one Province are not co-terminus or identical with the thousand employees in other Province. If there is only one trade union to cover both sets of workmen, then it is obvious that the majority view will be based on the interests of the vast majority of the workmen while the minority 'workmen's grievances may be disregarded. The principle of justice being delivered to the door step is radically breached by having only one forum at the Federal level, namely, NIRC based in Islamabad. In contrast to this, there are more than 30 Labour Courts in the different Provinces, therefore, it is obviously to the advantage of workmen to be able to have resort to a Court at their door step. Although the NIRC travels to different Provinces, obviously one…
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