๐๐ฎ๐ญ๐ฌ๐จ๐ฎ๐ซ๐๐ข๐ง๐ ๐๐๐๐จ๐ซ ๐ญ๐จ ๐ ๐๐จ๐ง๐ญ๐ซ๐๐๐ญ๐จ๐ซ ๐ญ๐จ ๐๐ฌ๐๐๐ฉ๐ ๐๐๐๐จ๐ซ ๐๐๐ฐ๐ฌ ๐ข๐ฌ ๐๐ฅ๐ฅ๐๐ ๐๐ฅ: ๐๐
The usual practice, seen mostly in manufacturing companies, is that they outsource labor to an independent contractor to avoid labor laws and its implications i.e. pensionary benefits, increase in salaries, death bonuses, grants, gratuity and the likes. This sort of agreements are called shame agreements or pretenses. If a company does so, what would be the legal solution for a labor who is exploited through a sham agreement? This issue has been resolved by the Supreme Court in a recent judgment authored by Justice Muhammad Ali Mazhar.
The Court in short held that sham agreements or pretenses, whose sole purpose is to escape the consequences, implications and rigors of labor laws, are in no way tenable in the eye of law. The labor laws were enacted for the benefit of and against the exploitationย of labors at the hands of employer. No one can use the same law for what it was enacted to combat.
The Court reiterated its previous stance and placed reliance on precedents and ruled that where the employer has direct control over the labor, has himself installed the machinery, pays their salaries and manage their affairs, such labor, even of their employment has been outsourced to a contractor, cannot be said to be employee of a contractor. The relationship of employee and employer would exist and labor laws would apply.
However, the Court distinguished the case where an employer outsources certain projects or manufacturing of certain commodities to another company or a contractor. The Court held that sometimes for downsizing cost effectiveness, an employer outsources certain business activity to an outsider. An employer has a full authority to evolve the best suited business strategy for his business but he is in no way allowed to do so at the cost of circumventing the laws.
c.p._525_k_2023
