ISLAMABAD: Employees of the engineering and kitchen departments of Pakistan International Airlines fall under the purview of the Employees Old Age Benefits Institution (EOBI) and are therefore subject to the benefits offered by the organisation, the Supreme Court concluded on Saturday.

The conclusion came in a judgment authored by Justice Mian Saqib Nisar, dismissing an appeal instituted by the Pakistan International Airlines Corporation against the EOBI Board of Trustees, challenging a Sindh High Court verdict.

Senior counsel Anwar Mansoor Khan represented PIA whereas Tariq Bilal appeared on behalf of the EOBI.

Under the EOBI scheme, insured persons were entitled to avail benefits such as old-age pension after retirement or invalidity pension in case of permanent disability, or old-age grant if the insured person attained superannuation but does not possess the minimum threshold for pension or survivor’s pension in case of his or her death.

SC turns down the management contention that food was prepared for ‘own consumption’

The judgment upheld a decision made by an EOBI adjudicating authority on Nov 24, 1995, when an assistant director moved a complaint under section 33 of the Employees Old Age Benefits Act 1976, highlighting that the kitchen and engineering department of the airlines required compulsory registration with EOBI and were therefore liable to pay contributions under the EOBI Act.

Both the adjudicating authority and the board of trustees, after seeking a reply from the airline, held that the kitchen and engineering departments of the national flag carrier were establishments within the purview of the Act. Section 3 asks for the compulsory insurance of all employees in any establishment.

These orders were challenged by PIA through constitutional petitions before the Sindh High Court, which was dismissed, and later the apex court.

In his judgment, Justice Nisar explored whether manufacturing process as has been defined under Factories Act 1934, was being carried out in the kitchen or engineering departments of the carrier.

Referring to the kitchen department, the verdict explained, flight kitchens or flight catering consists of mass-scale food production, where food was prepared, cooked and arranged for serving to countless passengers and flight crew on numerous local and international flights round the clock every day.

This makes it loosely similar to a regular kitchen and more akin to a food manufacturing plant, where finished dishes are made from raw material and finally packed and loaded onto flight catering carts for use on-board aircraft, the judgment said.

This makes it like the process for making or packing any article and making it a manufacturing process, and consequently rendering the kitchen department a factory in terms of the factories act, the judgment explained.

Accordingly, such a department would necessarily be an establishment under the purposes of the EOBI act.

The judgment did not find PIA’s argument – that the food was being prepared for its own consumption — reasonable, as the kitchen department was very much part and parcel of PIA’s objective, which is the provision of flight facilities to passengers.

Similarly, even if it was accepted that no manufacturing whatsoever was taking place in the engineering department, the judgment said, repairing and servicing of airplanes was admittedly being carried out, which brought it within the definition of a factory.

The court also noted that the repair and maintenance services of the engineering departments were also being provided to other airlines, as well as the Pakistan Navy and air force.

Published in Dawn, February 14th, 2016