1. ' MUHAMMAD NADIR KHAN, J---This appeal under section 48 (3) real with section 48 of Industrial Relations Ordinance, 2002 (hereinafter referred to as the I.R.O.) is directed against the order dated 16-2-2005 passed by Third Labour Court Balochistan at Hub (hereinafter referred to as the Labour Court) whereby the order of retrenchment dated 26-4-1997 terminating the service of the respondent (hereinafter referred to as the applicant/worker) has been set aside and the Employer/Company has been directed to reinstate the worker in service with full back-benefits.
2. ' The concise facts relevant for disposal of this appeal are that the applicant/worker who was serving the Employer/Company as Helper since 18-8-1994 was removed from service vide retrenchment order dated 26-4-1997 as the Employer/Company decided to reorganize their operations and retrench workers surplus to their requirement because Company was stated to be facing financial losses due to lack of demand and lack of orders. According to the Employer/Company applying the principle of last in first out the services of the applicant/worker were terminated who was directed to collect his dues on any working day. The applicant on receiving of the retrenchment order served the company with the grievance notice under section 25-A I.R.O. Seeking withdrawal of the retrenchment order. On refusal of the Employer/Company application under section 25-A of I.R.O., was filed by the applicant/ worker with the prayer to set aside the order dated 26-4-1997 and his reinstatement in service with back-benefits. The applicant alleged that his services were terminated malafidely on account of his trade union activities and the retrenchment order was stated to be against the provisions of law, while the Company was stated to be gaining huge profits as the production of the Company has increased due to great demand in the market.
3. ' The Employer/Company resisted the application contending that the applicant during the tenure of his service absented wilfully and was not performing his duty as claimed by him. According to the Employer/Company the applicant who was Joint Secretary of Mehnat Kash Union himself resigned from the said office on 21-8-1996, which was accepted by the CBA Union and copy of the same was submitted to the Registrar of the Trade Unions of Balochistan on 17-10-1996. The Employer/Company further submitted that the CBA Union approached the NIRC and obtained order dated 29-4-1997 restraining the Employer/Company from terminating the services of the workers, whereas the order of retrenchment was already issued on 26-4-1997. According to the Employer/Company his retrenchment order was in accordance with the provisions of Order 13 of West Pakistan Industrial and Commercial Standing Orders Ordinance, 1968 (hereinafter referred to as the Standing Orders).
4. ' The learned Labour Court after adducing of the evidence by the parties allowed the application vide order dated 30-12-1997, whereby the order dated 26-4-1997 passed by the Employer/Company terminating the services of respondent was set aside and he was reinstated with all the back-benefits. The Employer/Company being aggrieved by the reinstatement of the applicant filed Labour Appeal No,2 of 1998, which was dismissed by the Labour Appellate Tribunal vide judgment dated 2-5-2001. The Employer/Company thereafter filed constitutional petition No,222/2001, which was allowed by means of judgment dated 20-12-2001 and the case was remanded to the Labour Appellate Tribunal for decision afresh in accordance with law. After remand the Employer/Company filed application for amendment/incorporation of additional grounds in the memo. Of appeal, placing of documents on record and for leading of additional evidence. The said applications were disposed of by means of order dated 15-9-2002 whereby the appellant/employer was allowed to incorporate additional grounds in the memo. Of appeal.
5. Accordingly, amended memorandum of appeal was filed incorporating additional grounds with regard to the financial losses incurred by the company till year 1997 and in support of the same additional documents/annual reports were filed. After hearing of both the parties the appeal was disposed of by means of judgment dated 7-10-2003 whereby the order dated 30-12-1997 was set aside and the case was remanded to the Labour Court for its disposal afresh after allowing both the parties fair opportunity to support their respective claims and the Labour Court also to re- examine the matter.
6. ' After remand of the application the applicant filed his affidavit as additional evidence and he was cross-examined by the counsel for the Employer/Company. On the other hand the Employer/Company filed the affidavit of Abdul Majeed accompanied by documents R-1 to R-52, which include the order of NIRC dated 3-5-1997, order of termination of ten other employees and audit/annual reports of the accounts of the Company for the years 1997 to 2002. The learned Labour Court concluded the proceedings by means of order dated 16-2-2005 in the aforementioned terms.
7. ' Mr. Mehmood Abdul Ghani counsel for the appellant argued that the learned Labour Court has failed to appreciate the evidence available on the record, which established that at the time of retrenchment order of the applicant and ten others, Employer/Company was facing financial losses and for reorganization of the establishment the surplus staff could be removed as allowed by Order 13 of the Standing Orders. According to the learned counsel ten other employees accepted the position of the Employer/Company and in compliance of the retrenchment order they collected their dues and the applicant alone, who failed to dispute the financial position of the Company and also is being amongst the junior most worker in his category, filed the grievance application only to pressurize the Company to meet his uncalled demands. The counsel for the Employer/Company further argued that the grievance application was not maintainable in view of section 22-A of IRO as the applicant through CBA Union approached NIRC labelling the action of the Employer/Company as unfair labour practice and after being failed respondent/company has terminated services of 11 workers and intends to retrench more workers. CBA Union prayed for restraining the company from retrenchment of the workers. The CBA Union filed application for interim injunction whereupon ad interim injunction was granted vide order dated 29-4-1997, however the same was subsequently vacated vide order dated 3-5-1997 with following observations:-- "Admittedly the applicant union is collective bargaining agent since 7-6-1990 and within the period of 7 years there has been no instance quoted by the applicant regarding victimization of the office-bearers or members of the union by the respondent. Respondent has already retrenched 11 workers and reasons shown by the respondent in the termination letters of those 11 workers is huge financial losses, lack of demands and lack of orders as such to re-organise their business. The respondent has right to re-organise the business to make it beneficial and profitable and run the same in the way he likes to have gain from the business. Respondent has right to retrench the workers but has to observe the provisions of S.O. 13 of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, .1968 in case of retrenchment. There is no allegation by the applicant that in retrenchment of those 11 workers the respondent had violated the provisions of Standing Order 13 of West Pakistan Industrial and Commercial Employment (Standing Orders)
8. Ordinance, 1968. Obviously retrenchment of the workers will not fall within the ambit of unfair labour practice, and it can only be considered as an act of unfair labour practice, if it is done due to mala fide intention. Obviously at this stage on record there appears no mala fide of the respondent in making retrenchment of the workers to reorganise his business to run it beneficially. Admittedly the party, who alleges mala fide, has to prove it. It is, therefore, for the applicant to prove that there are mala fides on the part of the respondent in making retrenchment of the workers, but so far no such mala fide of the respondent appears on the record.
9. ' In the light of above reasons, I am of the view that the applicant has no prima facie case for grant of prohibitory orders, restraining the respondent from making retrenchment of the workers, as such the application for vacating interim orders dated 29-4-1997 filed by the advocate for the respondent is allowed and interim prohibitory order passed on 29-4-1997 are vacated, and consequently application under Regulation 32(2)(c) of NIRC (P&F) Regulations, 1973 filed by the applicant CBA Trade union activities being performed by him, which was cause of annoyance for the employer/company. At this juncture, once again reference is made to the admitted fact about removal of 11 workers including applicant, all other 10 retrenched workers accepted the termination order and collected their dues and their termination was neither stated to be mala fide nor on account of any Trade Union activities. Above all, the terminated workers do not include any office- bearer of the CBA Union and applicant workers who himself resigned from the office of Joint Secretary of CBA Union six months before issuance of retrenchment order and being failed to specify his involvement in trade union activities cannot be said to have been removed from service malafidely on account of his Trade Union activities.
10. ' The employer/company produced the Annual Reports for year 1996/1997 to 2001/2002 showing that the company suffered financial loss during above period, which fact has been supported by the statement of Abdul Majeed Admin. Officer who in cross examination admitted that in year 1997 despite sustaining of loss by the company the pay and number of directors and executives was increased. He further admitted that in year 1997 the number of workers was 170, which decreased to 70 and their pay has been increased. It was admitted by the representative of the company that in year 1998 Islamabad office was established, amount of Rs,25,000,000 and Rs,35,00,000 were spent in purchase of machinery and construction respectively and that the said amount was borrowed from bank.
11. ' The above statement of the representative of the company and the documents filed by him not only support the plea of company about suffering of fmancial loss but it also reflect that number of workers was reduced from 170 to 70 which fact by itself is enough to prove that the workers in large number were unnecessary/surplus whereas amount spent towards improvement of the establishment and that too by obtaining loan from bank cannot convert the loss into profit nor it can be considered unnecessary expenditures, while increase of pay of the employees of company to meet the inflation cannot be termed as unnecessary expenditure; whereas the undisputed annual financial reports reflect that the company was suffering loss continuously for three years, before issuance of retrenchment order of 11 workers including applicant, besides number of other workers had left, reducing the number of workers from 170 to 70 only. Having in view all the above factors the action the action of the company in the attending circumstances cannot be said to be for any reason but for reorganization of the establishment because of the financial loss being suffered by the company and to improve its viability by removing the surplus/unnecessary staff/workers.
12. ' The applicant/worker has not challenged the plea of the company about his being amongst the juniors most workers who have been removed from service through retrenchment. In such view of the matter the removal of the applicant/worker cannot be termed to be in violation of provisions of Order 13 of the Standing Orders. The order of removal of the applicant/worker, therefore, was not open to any interference, accordingly the order dated 16-2-2005 passed by 3rd Labour Court Balochistan at Hub is set aside, resultantly the application filed by the applicant/worker under section 25-A of I.R.O. For his reinstatement by setting aside the retrenchment order dated 26-4- 1997 is dismissed.
13. ' Appeal is allowed, which no order as to costs.