KARACHI: High Court upholds NDFC employees’ right to benefits
By Our Reporter
KARACHI, May 12: The Sindh High Court has announced reasons for declaring that clerical and non-clerical employees of the defunct National Development Finance Corporation (NDFC) were entitled to benevolent fund grant and medical benefit.
A division bench, comprising Justice Sabihuddin Ahmed and Justice Ali Aslam Jaferi, allowed the application subject to the conditions that court fee should be deposited in respect of each and every clerical and non-clerical employee of the defunct NFC (the respondent No 2).
The petitioners were Muhammad Dilshad and the NDFC Staff Union, and the respondents were the Federation, NDFC and National Bank of Pakistan.
The respondent No 2 was a statutory corporation established under the National Development Finance Corporation Act of 1973. It appeared that as a consequence of consistent financial losses the respondent No 1 (the federal government) decided to merge the respondent No 2 with National Bank of Pakistan and terminate the services of a large number of employees.
A severance package had been announced, whereby certain termination benefits, mostly in accordance with the service regulations of the respondent No 2 were stipulated.
Approval of the package was accorded by the respondent No 1 with certain modifications.
The grievance of the petitioner No 1, who was an employee opting for the package, and petitioner No 2, which was a staff union, appeared to be confined to the entitlement of the clerical and non-clerical staff in respect of benevolent fund grant and medical benefits stipulated in the package.
Khalid Jawaid Khan, counsel for the petitioners, argued that the Benevolent Fund Regulation of the respondent No 2 every employee of the NDFC, irrespective of the period of employment with it, was entitled to benevolent fund grant for a period of 10 years in the event of retirement prior to the age of superannuation.
He had further argued that under the Service Regulations, all such employees were entitled to post-retirements medical benefit up to a specified period of time. The scheme had been prepared by the respondent No 1, but apparently in terms of a letter from the ministry of finance of the respondent No 1 dated October 26, 2001, forwarded to the respondent No 2, benevolent fund grant and post-retirement medical benefits were only approved in respect of employees having rendered at least 10 years of service.
By a letter dated October 27, 2001 the respondent No 2 had requested that the scheme had been prepared in accordance with the regulations of the NDFC, and it was requested that the employees should be allowed payment of benevolent fund grant and post-retirement medical benefits according to their entitlement. No response to such letter had been brought to the notice of the court, counsel Khan had contended.
The respondent No 2 did not dispute the petitioners’ contention with respect to the above claims. It was nevertheless argued that the matter pertained to terms and conditions of service, and the petition was barred under article 212 of the constitution, the High Court in its detailed judgment said.
The counsel for the petitioners, on the other hand, had replied that no order denying the aforesaid benefits had been made available to the petitioners, to enable them to approach a competent service tribunal.
On behalf of the respondent No 1, parawise comments had been filed on March 19, and certain documents were placed on record by deputy attorney-general along with a statement dated April 23, 2002.
Without going into the legal question whether the severance package announced by the respondent No 2, which was an autonomous statutory corporation, in accordance with Service Regulations pertaining to its employees, required an approval of the respondent No 1, the Court noticed from the documents placed on record on behalf of the respondent No 1 itself that by a letter dated October 6, 2001, the ministry of finance had approved the severance package.
It specified that 10 years’ grant worked out on the basis of the rules of the subject and 286 per cent of current monitory entitlement commuted for a period of 10 years as per rules by way of medical facility had been approved by the respondent No 1. This letter was duly communicated to the chairman of the respondent No 2. Moreover, it seemed that a subsequent letter dated October 26, 2001 purporting to determine the financial impact of the package was dispatched to the chairman of the respondent No 2.
In the body of the letter it had been stated that the approval was subject to the condition that employees alleged to have committed service misconduct or be corrupt could not avail of the package unless they were exonerated from all charges. However, in the enclosed statement of financial impact the amount payable by way of provident fund and medical relief had been reduced, the judgment said.
After going through the material on record, apart from the question, whether a package required approval of the respondent No 1, the Court noticed that a conscious approval was accorded to the proposal of benevolent fund grant and medical facilities irrespective of the length of service of the employees. This letter was duly communicated to the respondent No 2. Therefore, the Court was of the view that the respondent No 1 had lost locus ponentiae to recall the same and the respondent No 2 was bound to give effect to approved proposal. Moreover, the letter dated October 26, 2001 did not explicitly state that the decision to accord such benefits to employees, who had rendered less then 10 years of service, had been recalled.
In any event the officers engaged in calculating the financial impact could not assume the powers to review the approval accorded by the competent authority, the High Court held.
