Rights of Employees: Employed Directly or through an Independent Contractor

28 December 2015

In the recent years, many multinational companies and other companies have “outsourced” the workings of the department of human resources. This means that the company hires and fires employees through a middle-company, the independent contractor. Usually, the remuneration of such “contracted” employees is also agreed and disbursed by the independent contractor. The advantage for doing so for the company is that it does not assume any liability on the part of the employee. Therefore, the company protects itself from the benefits that are usually provided to the employee.

When such cases reach the courts of Pakistan, due to some grievance of the employee, the company regrets any responsibility on the defence that such employee was the employee of the independent contractor and not the company.

The courts of Pakistan deliberate on the status of the employee, whether of the company or the independent contractor, when such employee falls within the definition of “workman” under the dominant labour laws such as the provincially adopted Industrial Relations Ordinance and the Industrial Relations (Standing Orders) Ordinance. However, any employee employed in a supervisory role or such employee that is expected to use creativity, imagination, intellect, skill, know-how or generally apply his mind to the assignments, does not fall within the definition of a workman. Therefore, employees employed in multinationals or such companies would usually fall outside the ambit of the definition of “workman”.

The rights of the employees are then limited to the contractual terms and conditions agreed with either the employer or the independent contractor.

Notably, the concept of “independent contractor“, as defined in the laws of United Kingdom, United States of America, and other (Western) jurisdictions is different from the concept in Pakistan. The jurisprudence in Pakistan has not yet evolved to define independent contractor as separate from an employee, outside the definition of workman. The definition of independent contractor remains limited as, what appears to be, a sub-section of those employees defined as “workman”.

Although the considerations applied when determining the status of a workman as a worker of the company or an independent contractor may be applied to the status of an employee (who is not a workman), but these considerations have, as yet, not been incorporated in the precedents set by the superior courts of Pakistan.

Such considerations include: (1) technical and administrative control over the employee; (2) the decisions re hiring, firing, remuneration and other benefits, the employees; (3) the involvement of the employee in the company; (4) that the employee works in a department that would constitute the principal organ of the company; (5) the machines, equipment, and raw material belong to the company; and the department is controlled by the supervisors of the company; (6) the company benefits from the performance of the employees functions; (7) the employee is integrated into the company; (8) the reality of the contract with the employee.

If the above considerations are present in the relationship between the employer and employee, whether hired directly or through an independent contractor, such employee is deemed to be an employee of the company and not the independent contractor.

For all employees, not protected as “workman” under the labour laws of Pakistan, the contract with the employer is the most important document and establishes the rights of the employee with the employer.

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Myra Khan is a Barrister-at-Law from the Honourable Society of Lincoln’s Inn and Vice Chairperson Women Rights Committee of the Lahore High Court Bar Association. She is currently practicing law in Lahore, Pakistan.

Any queries may be directed to lawyereadia@gmail.com

Gift under Islamic Law

18 December 2015

Under Muhammadan Law, a share in the estate of the testator can be transferred by way of a gift (Section 149).

The three (3) essentials of a gift (“hiba“) are:

(a) there should be a declaration of a gift by the donor;

(b) an acceptance of the gift, express or implied, by or on behalf of the donee; and

(c) delivery of possession of the subject of the gift by the donor to the donee (Section 150).

If these conditions are complied with, the gift is complete.

1. The Donor

Any person, who can execute a contract, can make a gift of his property in Islam.

Like the requirements of contract, the conditions to be able to make a gift are that, the donor should be: (a) at the age of majority, (b) of sound mind; (c) by his own free will and without any pressure or coercion to make the gift; and (d) the absolute owner of the property to be gifted.

The declaration, to make a gift, by the donor must be clear and  unambiguous and reflect the absolute intention of the donor to gift his property.

A gift by a married woman is valid and is subjected to same legal rules as mentioned above.

A gift by an insolvent person is also valid provided that it is bona fide and not with the intention to defraud the creditors.

2. The Donee

The one who can receives or accepts the gift is known as the donee.

Acceptance may be made expressly or implied by conduct. Any person can receive a gift if he or she is in existence at the time of the gift.

A gift to an unborn child is invalid, unless such child is born within six (6) months of the date of gift. In such case the gift to the unborn child will be valid as it was made on the presumption that the child was actually alive and existing in the womb of the mother.

In the case of a minor, possession of the gift is given to the legal guardian of the minor.

A lawful gift can also be made to non-muslim, so long as the Donee is in existence at the time of giving the gift.

The most important component of a gift is “acceptance” and “delivery”. A gift is void is acceptance has not been given by the Donee. A gift is also invalid if the possession of the property has not passed to the Donee so that the Donee reaps the benefit of the property. If the Donor is still enjoying the benefits of the property then such gift is invalid.

A gift that does not take effect immediately is of no effect whatsoever.

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Myra Khan is a Barrister-at-Law from the Honourable Society of Lincoln’s Inn and Vice Chairperson Women Rights Committee of the Lahore High Court Bar Association. She is currently practicing law in Lahore, Pakistan.

Any queries may be directed to lawyereadia@gmail.com