LAHORE: The Lahore High Court has set aside notices issued by Punjab government for the recovery of contributions towards the Punjab Workers’ Welfare Fund (PWWF) and Workers’ Profit Participation Fund (WPPF) from trans-provincial companies, declaring them a violation of the mechanism decided by the Council of Common Interests (CCI).

Justice Shahid Karim allowed the petitions filed by M/s Hyundai Nishat Motor (Pvt.) Ltd and other companies operating in more than one province.

They challenged notices issued for payment of two percent contributions towards PWWF and five percent of annual profits towards WPPF.

The notices alleged that the petitioners failed to deposit the outstanding dues regarding these contributions for the relevant financial years and have been directed to deposit the same immediately. The petitioners were also asked to submit a written explanation within seven days of receipt of the notices.

The companies argued that being trans-provincial entities with operations in multiple provinces and Islamabad Capital Territory, they were not liable to be governed by provincial labour laws.

Justice Karim observed that the main question before the court was not whether the companies were liable to pay contributions but which authority had the power to collect such payments — the federal or the provincial government.

The judge noted that the issue had already been considered by the CCI, a constitutional body established under Articles 153 and 154 of the Constitution to resolve inter-provincial matters.

The judge referred to a CCI decision of Dec 23, 2019, under which it was decided that Workers Welfare Fund matters relating to trans-provincial companies would continue to be handled through the federal mechanism until a mutually agreed arrangement was developed between the federation and provinces.

The judge also referred to a subsequent committee meeting held in October 2020, where it was agreed that companies having offices in two or more provinces would continue contributing through the Federal Board of Revenue (FBR) under the federal mechanism.

“The ineluctable conclusion is that the impugned notices have been issued in clear violation of the decision made by the committee constituted by CCI and hence cannot be sustained,” the judge held.

Justice Karim observed that the issue remained unresolved and the Punjab government was bound to follow the arrangement agreed at the constitutional forum.

The judge held that merely empowering the Punjab Employees Social Security Institution (PESSI) through amendments to recover contributions did not extend its authority to collect dues from trans-provincial entities, a category already under consideration before the CCI.

“Simply because through an amendment, the institution [PESSI] has been empowered to make recoveries of contributions under the funds would not mean that the power extends to recovering contributions from trans-provincial entities,” Justice Karim observed.

He noted that the Sindh High Court had also disposed of similar petitions in light of the CCI decision and found no reason to disagree with that view.

Allowing the petitions, Justice Karim struck down the notices and clarified that the companies would have the right to challenge any future decision taken by the CCI or any other competent authority.

Published in Dawn, July 1st, 2026