Labour Courts can declare Employees Permanent but cannot bypass Statutory Policies to grant Regularization --- Lahore High Court, Lahore

Islamabad 04-03-2025: In a landmark ruling, the Lahore High Court (LHC) has upheld the declaration of daily wage employees of the Parks & Horticulture Authority (PHA) as permanent workmen but set aside the Labour Appellate Tribunal’s order directing their regularization.  

Mr. Justice Anwaar Hussain delivered the judgment in [Writ Petition No. 78987 of 2023], filed by PHA challenging the Tribunal’s decision that granted regularization to workers employed for over 10 years as gardeners, plumbers, and drivers. The Court ruled that while the employees qualify as workmen under labour laws, their regularization is an administrative matter beyond the Labour Tribunal’s jurisdiction.  

PHA, in its petition, argued that:   

1. It is not an industrial or commercial establishment under Punjab Industrial Relations Act, 2010 (PIRA).  
2. The Industrial & Commercial Employment (Standing Orders) Ordinance, 1968 does not apply to its employees.  
3. Regularization falls under the Punjab Regularization of Service Act, 2018, not under labour laws.  
4. The Labour Appellate Tribunal overstepped its authority in directing regularization.  

However, after reviewing the legal framework and precedents, the Lahore High Court ruled that:  

1. PHA qualifies as a ‘commercial establishment’ under labour laws since it provides structured horticultural and maintenance services. 
2. Daily wage employees performing manual labour qualify as ‘workmen’ and are entitled to protections under labour laws. 
3. The Supreme Court’s precedent in Ahmad Hussain (2013 SCMR 1547) supports the recognition of long-serving government employees as workmen. 
4. Permanent workman status is automatic under Standing Order No. 12 after 9 months of continuous employment, but regularization requires a statutory process. 

Key Legal Principles Established:    

1. PHA’s structured economic activities make it a commercial establishment under the Standing Orders Ordinance, 1968. 
2. Employees performing non-administrative manual work qualify as workmen, irrespective of whether their employer is a government entity. 
3. Permanent status is granted automatically under labour laws after a prescribed period of service.  
4. Regularization, however, is an administrative decision and cannot be ordered by labour Courts.
5. Labour Courts can declare employees permanent but cannot bypass statutory policies to grant regularization.   
6. Regularization requires policy decisions and government approvals, as clarified in Vice Chancellor Agriculture University (2024 SCMR 527). 
7. The Government’s policy estops PHA from denying workman status to daily wage workers. 

The Lahore High Court ruled in favor of the employees by upholding their permanent workman status but reversed the Tribunal’s regularization order, stating that it lacked legal authority to grant such relief.  

Regularization order set aside.

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