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Miscellaneous Appeal No. 34 of 1983, decided on 1st October, 1986

‑‑‑Ss. 2(30), 20 & 64‑‑Production premium‑‑Liability of establishment to make contribution on amount paid to workers as production premium‑ Production premium paid to workers being in fact payment made towards overtime to its workers, claim to contribution thereon, by Authority in terms of S.20 of Ordinance X of 1965, held, was not sustainable‑‑No prohibition of treating such allowance as overtime payment either in Factories Act, 1934 or in Ordinance X of 1965 existed.

‑‑‑S. 64‑‑Appeal under S.64 could only be lodged if a substantial question of law was involved therein‑‑Appeal against order of Social Security Court‑‑Appeal under S.64, held, could only be lodged if a substantial question of law was involved therein.

‑‑‑S. 64‑‑Appeal against order of Social Security Court‑‑Plea not raised before lower forum‑‑Effect‑‑Where a plea was not raised before lower forum, same, held, could not be raised subsequently, in appeal‑‑High Court in its appellate jurisdiction would decline interference in absence of misreading or perverse appreciation of evidence.

‑‑‑Ss. 20 & 64‑‑Liability of establishment to contribution on amount paid to workers as milk and washing allowances‑‑Admission of liability by establishment on such allowances before Authority‑‑Such liability however, challenged by establishment before lower appellate forum---In absence of ground in memo. of appeal before such forum, attacking correctness of observation by authority about admission by establishment, finding of lower forum reversing finding of such Authority, held, would not be sustainable‑‑Order of lower appellate forum in so a as same disallowed claim for contribution on amount paid by establishment in respect of washing allowance only, was set aside by High Court in exercise of its appellate jurisdiction‑‑Appeal being not pressed in respect of milk allowance, however, was dismissed accordingly.

S.A. Sarwana for Appellant.

Ali Amjad for Respondent.

Date of hearing: 1st October, 1986.

This miscellaneous appeal under section 64 of the Sind Employees' Social Security Ordinance, 1965, is filed by the Sind Employees Social Security Institution against the order of the Social Security Court, holding that the payments made by the respondent to its workmen as production premium, milk allowance and washing allowance did not fall within the meaning of "wages" as defined in the Ordinance and, as such, no contribution under section 20 of the Ordinance were payable thereon. At the hearing of this appeal, the learned counsel for the appellant conceded that, in view of the evidence on record, no contribution was payable on the amount of milk allowance paid by the respondent to its workmen, but maintained that such contribution was payable both on the sum paid as production premium and washing allowance by respondent to its workers. It is contended by the learned counsel that the payment made by the respondent and held by the lower Tribunal; as overtime allowance are in fact entered on one ledger maintained by respondent as production premium and, as such, the Social Security Court wrongly treated these amounts as overtime payment to its workers. It is urged that the claim of the respondent, that the amount paid to its workers, although described as production premium in the ledger, was, in fact, an overtime payment to its workers, is not borne out from the evidence on record. Alternatively, it is contended by the learned counsel that, in the absence of compliance of sections 34, 36, 39, 40 and 47 of the Factories Act, there was strong legal presumption in favour of appellant that these payments made by the respondent to its workers were not overtime, and the Tribunal below should have held accordingly. It is additionally contended that the description of this disputed payment to its workers by the respondent as production premium was a device adopted by the respondent to circumvent the non‑compliance of the provisions of the Factories Act relating to overtime work in a factory, and, for this reason alone, the lower Tribunal should have refused to treat these payments as overtime payments. With regard to the exemption from contribution under the Ordinance on the sum paid as washing allowance by the respondent to its workers allowed by the Social Security Court, the learned counsel contends that this part of the judgment is wholly without jurisdiction, as the respondent had conceded before the Social Security Commissioner that this payment is subject to contribution under section 20 of the Ordinance, and, in the grounds of appeal, no challenge was made with regard to the correctness of the observations made by the Commissioner in this regard.

The contention of the appellant that overtime payment could not be accepted by the Tribunal in the absence of compliance of the provisions of the Factories Act applicable in this behalf has been dealt with at length by the learned Social Security Court in the impugned judgment, and, for very cogent reasons, the learned Tribunal repelled the contention. I am of the view that, in the absence of a positive provision either in the Factories Act or in the Ordinance, prohibiting payment of overtime by an employer to its workmen, the overtime payments made by the employer to its workers could not be disregard merely on the ground that the employer had failed to comply with the provisions of the Factories Act, applicable in this behalf. It is admitted by the learned counsel for the appellant before me that there is no provision either in the Factories Act, or, under the Social Security Ordinance, which prohibited an employer to make payment for overtime A work to workmen in the absence of compliance with the provisions of the Factories Act. In the absence of such a provision, the actual nature of payment was the determining factor, and not its description in the accounts book. In the case before me, the respondent examined its Accountant, who produced the overtime payment register before the Social Security Court and explained in the evidence that the description of these payments in the general ledger as production premium was only for the purposes of accounting. No evidence was produced by the appellant to rebut these assertions. The learned Social Security Court, on the basis of the above evidence as well as various admissions made by the appellant's witness namely, Naseem Ahmad Khan (Auditor of the appellant) in cross‑examination, reached the conclusion that, although the payments made by the respondent to its workers were described in the general ledger as production premium, out, in fact, these payments were made in connection with the overtime work done by the workmen. There is no evidence on record to show that the disputed payments made by the respondent to its workers were for any extraordinary work done by them, during normal working hours, in the factory. It is not disputed by the learned counsel for the appellant that incentive payment like production bonus, or, production premium are paid to worker for extraordinary work performed by him during the normal working hour, while overtime payment is paid to workers for the work which they do after normal working hour in extra time. It is sufficiently established in the evidence led before the Social Security Court that the disputed payments were made to the workers by the respondent for extra time work done by them in the factory of the respondent. The rate of payment for the extra time, which is admitted in this case, also supported the conclusion of the lower Tribunal, that the payment was not in the nature of incentive payment to the workmen, but it related to the work performed by the workmen over and above the normal duty hours. The learned counsel for the appellant lastly contended that these payments were in fact made to the workers to circumvent the provisions of the Factories Act and were in fact payments for a second shift for which no permission was obtained by the respondent from the relevant authority. It is also urged by the learned counsel that, in order to avoid penal consequences, resulting from non‑compliance with the provisions of sections 34, 36, 39 and 47 of the Factories Act. The respondent had deliberately shown this amount in their general ledger as production premium and, as such they cannot be allowed to take advantage of their own wrong. I am afraid these contentions of the learned counsel have no basis as neither any such plea was raised before the Tribunal below nor any foundation was laid in the evidence before the Commissioner, or, before the Social Security Court for such a case. In the absence of such a plea having been raised before the B Tribunal below, it is not possible to accept the contention of the learned counsel for the appellant at this stage. I have gone through the evidence recorded in the case with the assistance of the learned counsel for the appellant, and I do not find any case of misreading, or, perverse appreciation of evidence on record, as to call for interference in this miscellaneous appeal. It is not disputed by the learned counsel that an appeal under section 64 of the Social Security Ordinance can be lodged only if a substantial question of law is involved in the appeal. As I have reached the conclusion after going through the evidence, that the conclusion arrived at by the Social Security Court supported by the evidence on record, no legal question arises in this appeal for determination. I accordingly see no reason to interfere with the finding of the Social Security Court in so far it disallowed the claim of contribution on the amount paid by the respondent to its workers as production premium, which was held to be in fact payment made towards overtime to its workers.

The next contention of the learned counsel for the appellant is that before the Commissioner, Social Security, the respondent had conceded that contribution under section 20 of the Ordinance is payable on the amounts paid to workers towards milk and washing allowance. I E have gone through the order of the Commissioner, Social Security, in the case, and I find that it is specifically observed in his order that the respondent did not dispute before him that they are liable for payment of contribution on the payments made to the workers in these accounts. Although the question was reopened in the appeal before the Social Security Court, but, in the absence of a ground in the memo of appeal before that Court, attacking the correctness of the observation made by the Commissioner in his order, it was not open to the Social Security Court to have reversed the finding of the Commissioner, which was arrived at on the basis of a concession made before it by the party. I accordingly reverse the order of the Social Security Court in so far as it disallowed the claim of the appellant for contribution on the amounts paid by him in respect of washing allowance only, as the appeal is not pressed in respect of milk allowance. In view of these observations, the appeal is partly allowed, but there will be no order as to costs.

A.A. /4887/Lb Appeal allowed.

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