TELENOR PAKISTAN (PVT.) LTD. vs EMPLOYEES OLD AGE BENEFITS INSTITUTION through Regional Office, Islamabad Ss

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TELENOR PAKISTAN (PVT.) LTD. VS EMPLOYEES OLD AGE BENEFITS INSTITUTION through Regional Office, Islamabad Ss.2(bb) & 33---Punjab Private Security Companies (Regulation and Control) Ordinance, (LXIX of 2002), S.13---Constitution of Pakistan, Art.199---Employees' Old-Age Benefit (EOB) contributions---Petitioner company engaging security services through independent third-party service provider---Issuance of show cause notice and demand notice, challenge to---Whether the security guards were employees of the beneficiary company or that of the third-party service provider---Whether the petitioner/beneficiary company was liable for 'EOB' contributions or the independent third-party service provider---Determination---Briefly, the petitioner company entered into security service agreements with various private security companies for deployment of security guards at its offices and sites---Upon correspondence, the Employees Old-Age Benefits Institution (EOBI) demanded employer and employee contributions in respect of the deployed guards and issued show-cause as well as demand notices, and initiated recovery proceedings, including sealing of the petitioner's office, leading the petitioner to file a complaint under section 33 of the Employees' Old-Age Benefits Act, 1976, which was dismissed by the adjudicating authority---Appellate Authority also held the petitioner liable to pay contributions amounting to Rs. 238,960,800/- for the period July 2004 to June 2010---Issue requiring determination before the High Court "was whether the security guards deployed through independent security companies were to be treated as employees of the petitioner company for the purposes of EOB contributions, and whether the impugned orders and recovery proceedings were legally sustainable?"---Held: Security Companies engaged by the petitioner company were registered in different provinces where the provincial statutes govern the regulatory framework of security companies in their respective jurisdictions---For instance, S. 13 of the Punjab Private Security Companies (Regulation and Control) Ordinance, 2002 delineates a comprehensive regulatory framework governing the employment, supervision and welfare of personnel engaged by alicensed security company---This provision imposed upon the licensee a continuing obligation to ensure the integrity, discipline and lawful conduct of all individuals employed in connection with its operations---Under the existing framework across the provincial jurisdictions, security companies/third-party service providers assumed the unequivocal status of "employers" of their respective security personnel, possessing complete administrative and financial control over them, who were responsible for the employment, hiring, training and equipping of the security guards and provide uniforms, issue arms and ammunition, deploy personnel to various sites, manage work shifts and determine leave schedules---Under the contractual framework the security companies having complete discretion were responsible for hiring, dismissal, payment of wages, and all other benefits due towards the guards under the social security and labor laws and these agreements explicitly set out the responsibility of registration with the Social Security and Employees Old Age Benefits Institution on the Security Companies and established their liability to discharge all legal obligations towards the said guards---Impugned decision imposing the contributions liability upon the petitioner in respect of the security guards at its sites, without first adjudicating the clear and material question of who in fact employed and paid the guards, was legally unsustainable---Security companies, in their capacity as direct employers of the security guards, could not be overlooked in determining liability for Employees Old Age Benefits contributions---Impugned decisions were set aside---Constitutional petition was allowed, in circumstances.

TELENOR PAKISTAN (PVT.) LTD. vs EMPLOYEES OLD AGE BENEFITS INSTITUTION through Regional Office, Islamabad Ss — 2026 PLC 41 ISLAMABAD

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