1. This appeal u/S. 48(3) r/w Section 48 of Industrial Relations Ordinance, 2002 (hereinafter referred to as the IRO) 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 26.4.97 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 18.8.94 was removed from service vide retrenchment order dated 26.4.97 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 u/S. 25-A IRO seeking withdrawal of the retrenchment order. On refusal of the Employer/ Company application u/S. 25-A of IRO was filed by the applicant/worker with the prayer to set aside the order dated 26.4.97 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 willfully 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 21.8.96, 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 26.4.97. According to the Employer/Company his retrenchment order was in accordance with the provisions of Order 13 of West Pakistan Industrial & 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 30.12.97, whereby the order dated 26.4.97 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, 2/1998, 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 15.9.02 whereby the appellant/employer was allowed to incorporate additional grounds in the memo of appeal. Accordingly, amended memorandum of appeal was filed incorporating additional grounds which 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.
5. 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 3.5.97, 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.
6. 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 labeling the action of the Employer/Company as unfair labour practice and after being failed before NIRC filed the grievance application before the Labour Court on the same grounds, which were already dealt with by the NIRC in its order dated 3.5.97. The applicant failed to bring on record any material reflecting malafide on the part of Employer/Company for termination of his service. The evidence available on the record does not reflect that after termination of 11 employees any new worker was inducted, which fact by itself shows that the applicant and ten others were surplus and have not been replaced till date, therefore, the learned Labour Court ignoring all the above aspects of the case is stated to have passed the order of reinstatement, which is in conflict with the evidence available on the record.
7. Mr. Sundar Dass the learned counsel for the applicant/worker supporting the impugned order argued that the plea of the Employer/ Company about sustaining of losses has been examined in detail by the Labour Court and the same was found to be incorrect as the Employer/Company had obtained loan from the Banks for expansion of the establishment, which speaks of increase in demand and production. The interest being paid on the loans cannot be termed as loss. According to the learned counsel for the applicant/worker the retrenchment order was malafide and was on account of the trade union activities of the applicant who was earlier forced to resign from the office of General Secretary of the Union and subsequently he himself was removed from service.
8. According to the learned counsel for the applicant provisions of Section 22-A IRO are not applicable in the instant case as the application has been filed by the applicant for redressal of his grievance arising out of the termination order, whereas the proceedings before NIRC were initiated by the CBA Union before issuance of termination order, therefore, order dated 3.5.97 passed by NIRC refusing to grant stay against the termination order cannot affect the maintainability of the grievance application. The findings of the learned Labour Court are stated to be in consonance with the evidence available on record and free from any legal infirmity leaving no room for interference.
9. Before going into merits, the objection raised by the employer/company about jurisdiction of Labour Court to. adjudicate upon the matter already dealt with by NIRC requires to be examined.
10. There is no dispute between the parties about filing of Case No, 4A (174/97/24 (203)/97 by Pioneer Cables Ltd. Mehnat Kash Union through its President Shakeel Ahmed against the employer/company. None of the party produced the copies of the application filed by CBA Union, however the plea of the CBA Union before NIRC as reflected by the order dated 3.5.1997 was that the CBA Union submitted charter of demands to respondent on 15.7.1996 but the respondent/company allegedly delayed the negotiation with intention to retrench the workers to avoid the charter of demands. It was further contended that the 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 Orders 13 of West Pakistan Industrial & Commercial Employment (Standing Orders) Ordinance, 1968. Obviously retrenchment of the workers will not fall with in the ambit of unfair labour practice, and it can only be considered as on act of unfair labour practice, if it is done due to malafide intention. Obviously at this stage on record there appears no malafide of the respondent in making retrenchment of the workers to re-organise his business to run it beneficially. Admittedly the party, who alleges malafide, has to prove it. It is, therefore, for the applicant to prove that there are malafides on the part of the respondent in making retrenchment of the workers, but so far no such malafide of the respondent appears on the record.
11. In the light of above reasons, I am of the view that the applicant has no prima facie case for grant of prohibitory order, 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 Union is dismissed. To come up on 19.6.1997 for filing affidavits-in-evidence by the applicant."
12. It is admitted feature of the case that applicant/worker and 10 others were removed on 26.4.1997, hence 11 workers referred in the above order are found to be applicant and 10 others, further the order reflects that the CBA Union did not challenge the termination/retrenchment of the 11 workers already removed, they prayed for injunction against further removal of workers. The applicant/worker though in his grievance application before Labour Court claimed to have been removed during the order of status quo passed by NIRC but his such plea is negated by he above referred order, besides the retrenchment order dated 26.4.1997 could not be stayed vide order dated 29.4.1999. Having in view the order dated 29.4.1997 it can safely be concluded that the proceeding before NIRC was not against the termination/retrenchment order dated 26.4.1997, hence maintainability of the grievance application filed by the applicant/worker before Labour Court challenging his termination order cannot be held to be not maintainable on said score and applicant/worker being aggrieved by his termination order could challenge the same under Section 25-A of IRO 1969 before Labour Court.
13. Adverting to the merits of the case, as already stated applicant/worker along with 10 others was removed from service vide retrenchment letter S dated 26.4.1997. The letter received by the applicant/worker reads as under:-- "Due to huge financial losses, lack of demand and lack of orders, the Management have decided to re-organize their operations and retrench worker surplus to our requirement.
14. Keeping in view the principle of last in first out, your services for the aforesaid reasons are hereby terminated with immediate effect on payment of one month salary in lieu of notice. You are directed to collect your dues on any working day."
15. The applicant/worker disputing the plea of the employer/company claimed that the company was earning profit and bonus was given to its employees and contended that the termination order was malafide as the company did not approve his Trade Union Activities. However, the applicant/worker did not dispute the fact that he was Joint Secretary of the Mehnat Kash Union and he resigned from the said position on 21.8.1996 which was accepted by the CBA Union and was communicated to the Registrar of Trade Union on 17.10.1996 i,e, more than six months before the issuance of letter of retrenchment dated 26.4.1997 and applicant failed to bring on record any evidence about the 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 malafide as on account of any Trade Union Activities. Above all, the terminated workers do not include any office bearer of the CBA Union and applicant worker 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 mala fidely on account of his Trade Union Activities.
16. 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, 25000000/-and Rs, 3500000/- were spent in purchase of machinery and construction respectively and that the said amount Was borrowed from bank.
17. 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 financial 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 form 170 to 70 only. Having in view all the above factors the action of the company, in the attending circumstances cannot be said to be for any reason but for re-organization 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.
18. 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 16.2.05 passed by 3rd Labour Court Balochistan at Hub is set-aside, resultantly the application filed by the applicant/worker under Section 25-A of IRO for his reinstatement by setting-aside by the retrenchment order dated 26.4.97 is dismissed.
19. Appeal is allowed, with no order as to cost.