1. ' MUHAMMAD NADIR KHAN, J.--- This common judgment shall dispose of Labour Appeals Nos.27 of 2006 to 49 of 2006 involving similar facts and common law points arising out of the consolidated order, dated 26-8-2006 passed by District and Sessions Judge/Presiding Officer 3rd Labour Court Balochistan at Hub whereby the grievance petitions filed by the appellants (hereinafter referred to as the applicants/ workers) under section 46 of the Industrial Relations Ordinance, 2002 (hereinafter referred to as the I.R.O.) read with section 12(3) of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (hereinafter referred to as the Standing Orders) against the respondent (hereinafter referred to as the respondent/ Company) have been dismissed.
2. ' Case of the appellants/workers was that they being permanent workers of the respondent/company, were members of Pakistan Synthetic Ltd. Mehnat Kash Union. According to the applicants the respondent/ company was unhappy by the Trade Union activities of the applicants as the respondent/company never accepted real and healthy trade unionism and since last 14 years the Company had their own pocket C.B, A. Union known as Pakistan Synthetic Ltd.
(PSL) Employees Union which did not take any steps for betterment, improvement/increase the facilities of the workers. According to the applicants, respondent/company has sound financial position from the very beginning and in the last financial year which ended on 30-6-2004 they earned good profit. The applicants further contended that the respondent/company created their own pocket unions known as Pakistan Synthetic Employees Union, PSL Labour Union and PSL Mazdoor Union only to deprive the workers from their genuine and active trade union activities, while the above unions were restricted only to the files of the Company and leadership of the Union acted as, puppet of the Company. The election of Pakistan Synthetic Ltd. Mehnat Kash Union was challenged by some of the members whereupon NIRC directed to hold the elections of the Union under supervision of Deputy Registrar of NIRC. Accordingly, the elections were held and the puppet union lost the election which was won by Abdul Salam Panel and the company did not accept the same. The applicants further submitted that at the time of election of PSL Mehnat Kash Union the applicants were harassed, pressurized and forced to cast their votes in favour of the patronized panel of the Company which the applicants refused resultantly in the elections held on 12-1-2005 the Company's patronized panel lost election, whereafter the company affected lay off w.e.f., 13-1- 2005 which continued up to 14-3-2005 without any physical break. The grounds for lay off were not correct. The applicants further stated that they were laid off while dozens of junior workers of same category continued their duties and dozens of daily paid workers in the same category were also retained. According to the applicants lay off order was signed by Younas Khan who was not competent to pass such orders. The applicants submitted their grievance notice, dated 17-1-2005 against their lay off which was reply by the company on 31-1-2005. Thereafter the company terminated the services of the applicants w.e.f. 15-3-2005 by means of termination letter dated 10- 3-2005. The termination of the applicants was stated to be mala fide. According to the applicants the removal of the applicants on the ground of reorganization amounts to retrenchment of the employees under Standing Order 13 which requires that the retrenchment of the workers is to be made on principle of last come first go which was not followed by the Company as junior workers in the same category were retained. The applicants alleged that Pakistan Synthetic Ltd. Mehnat Kash Union vide letter, dated 16-2-2005 had applied for determination of C.B.A. And the respondent company with intention to save their pocket unions from defeat, the services of the applicants were terminated malafidely. The applicants further contended that termination of their service is in violation of order, dated 23-7-2002 passed by NIRC restraining the respondent/company from terminating/dismissing the applicants from service. According to the applicants they served grievance notice, dated 16-3-2005 on the respondent/company which was replied on 28-3-2005 but the grievance of the applicants was not redressed. The applicants finally prayed in the following terms:-- "In 'view of above and in the interest of justice it is humbly prayed that this Honourable Court may be pleased to:--
(A) Allow the application.
(B) Hold that the lay off for the period of 1-1-2005 to 14-3-2005 is illegal and the applicant is entitled for full wages during that period.
(C) Declare and to hold that the termination order 10-3-2005 (Annexure "D") is illegal.
(D) Direct the respondent Company to reinstate the applicant in service with full back-benefits.
(E) Any other relief under the circumstances of the case. Prayed accordingly."
3. ' The respondent/company contested the applications by filing of rejoinder wherein number of preliminary objections were raised with regard to maintainability of the application contending that the services of the applicants were terminated under Standing Order 12, 1968. According to the respondent/company the applications have been filed by an unauthorized person, as Rehmatullah is neither officer-bearer of C.B.A. Nor an Advocate. The respondent/company further contended that the applicants are time-barred as against the lay off the applicants issued grievance notice, dated 17-1-2005 but they did not approach the court within the period of two months. On merits the respondent/ company though admitted that the applicants were their permanent workers but denied that the services of the applicants were terminated on account of their trade union activities. According to the respondent/ company, from financial year 2004-05 the Company has gone under heavy financial/monetary losses due to slump in the market resulting in lack of demand of staples fiber due to which huge quantity of company's finished goods were accumulated to an extent that there was no space for its proper storage. According to the respondent/company the reasons of financial losses to the company were strong international competition, as the finished product namely staple fibers of China and Korea are cheaper than the respondent/company's staple fiber and due to very high cost of inputs, it had become difficult for the respondent-company to survive. The company continued its involvement in the labour union affairs and the services of the applicants were terminated purely on the ground of reorganization of the company. The company finally prayed for dismissal of the applications.
4. ' Learned Labour Court out of pleadings of the parties framed following issues:--
(1) Whether the lay off of the workers in the factory and thereafter the termination of the applicants were illegal?
(2) Whether the applicants are entitled for the relief as claimed?
(3) Relief?
5. ' The applicants/workers supported there plea by filing their affidavit in evidence and applicant/worker Waqar Ahmed was cross-examined by the respondent/company which was relied by both the parties in all the cases. On the other hand the respondent/company filed the affidavit in evidence of Muhammad Younas Khan Senior Manager Administration, Muhammad lqbal Khan Senior General Officer and Saleem Aziz, Chief Financial Officer, they were cross- examined by the representative of the applicants/workers. The learned Labour Court-III at Hub concluded the proceedings by means of order dated 26-8-2006 whereby the grievance applications filed by the appellants have been dismissed.
6. ' Mr. Azam Jan Zarkoon the learned counsel for the appellants and Mr. Kamran Mullahkhail the learned counsel for the respondents have been heard at length and the record of the case perused minutely.
7. ' There is no dispute between the parties about applicants/workers being permanent employees/workers of the respondent/company. It is also an admitted fact that services of the applicants along with few other workers were dispensed with vide order/letter dated 10-3-2005.
8. The plea of the Company in said regard was that the product of the company known as staple fiber was out of demand and the Company had to stop its production. According to the Company on account of lack of demand of staple fiber the Company was facing financial losses and to reorganize the Company they had to remove some of their employees under Standing Order 12(1).
9. ' On the other hand the applicants/workers came up with the plea that their removal from service was mala fide as they were supporters of the Labour Union established against the wishes of the company. Further the plea of the Company about financial losses was denied and ,it was claimed that the company was earning profit and after their removal the Company recruited new workers.
10. Further the workers junior to the applicants were. Retained. Removal of the applicants was stated to be in violation of the provisions of Standing. Orders. The applicant/workers supported their plea by their affidavit in evidence wherein they reiterated the averments of their application while in cross-examination the Company impliedly admitted establishment of Labour Union known as Mehnat Kash Union of which the applicants were members. The record reflects that previously also there was some controversy between the parties with regard to labour affairs and some of the employees had approached NIRC apprehending their removal from service and their petition was disposed of vide order, dated 31-7-2002 in the following terms:-- "Order ' Mr. Muhammad Nishat Warsi, Advocate for the petitioners is present. Mr. Rafique Malik, Advocate for respondents Nos.2 and 3 is present. Mr. Muhammad Younas Khan, Senior Manager Administration is present on behalf of respondent No,
1. The Advocate for respondent No,1 Management and their Senior Manager Administration have made written undertaking that they will not terminate, dismiss or remove from the employment any of the petitioner without due process of law and that they will not commit any act of unfair labour practice. This statement was read over to Mr. Nishat Warsi, Advocate who was satisfied with this statement and stated no objection on the said application that the case may be disposed of on the basis of this undertaking.
11. ' Since the respondent-Management has given in writing that they will not dismiss, terminate or remove from employment any of the petitioner and that they will not commit any act of unfair labour practice in respect of petitioners; hence this petition has become infructuous and it is dismissed accordingly.
12. (Sd.) (Ali Nawaz A. Channa)
13. Member."
14. ' It seems that thereafter the dispute between the parties though was subsided for the time being but subsequently, the same again cropped up which resulted in the dismissal of the applicants who were firstly laid off w.e.f. 13-1-2005 which was extended on 28-1-2005, 12-2-2005, 28-2-2005, and finally services of the applicants were terminated w.e.f. 15-3-2005 vide letter dated 10-3-2005 which reads as under:-- "Subject: Termination of employment under section 12(1) of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968.
15. ' As you know that due to slump in the market resulting lack in demand of staple fiber, huge quantity of Company's Finished Product namely, staple fiber was/is accumulated to an extent that there is no space for its proper storage, due to which it was/is impossible to continue further production of staple fiber, whereas the liquidity position/condition of the Company is also very precarious.
16. ' Due to the above position, the Company went on lay off from January, 2005 but still there is no improvement in the market condition. It is further pointed out that due to the above position, the Company is also facing losses continuously since last year and reached at the condition, where its survival not possible except to further minimize its monetary load.
17. 'In view of above, we regret to inform you that it has been decided by the Company to terminate your services with effect from 15-3-2005 due to the above reason under section 12(1) of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. However, you will be entitled for one month's notice pay in lieu of notice.
18. ' You are directed to collect your legal dues in full and final settlement on submission of the prescribed clearance from our Accounts Department including one month's notice pay on any working day during working hours by the end of this month, so that necessary arrangements for the payment of your legal dues could be made effectively.
19. ' For PAKISTAN SYNTHETICS LTD., (Sd.) (Muhammad Younus Khan), Senior Manager Administration."
20. ' Company though supported the reasons for lay off and termination of the services of applicants through affidavit in evidence of Muhammad Younas Khan, Senior Manager (Admn.), Muhammad Iqbal Khan, Senior General Officer and Saleem Aziz, Chief Financial Officer, but the Company did not produce any record about production of staple fiber, its demand and available stock. So much so that there is no evidence to show that the production of staple fiber was stopped. Furthermore, the company did not produce the annual audit report to prove that the Company was facing financial losses on account of lack of demand of staple fiber. The copies of statements R.1 and R.2 produced by the company stating the profit and loss account (unaudited) for 9 months period ending on 31- 3-2005 does not support the plea of company. The said statement does not indicate that any incline in the income was on account of lack of demand of staple fiber. In such view of the matter the ground on which the applicants/workers were removed could not be substantiated by the company. The findings of the learned Labour Court/trial Court in said regard cannot be agreed as no evidence worth reliance was produced by the company to prove that the company was facing financial loss on account of lack of demand of staple fiber to justify reorganization of the company by reducing the manpower.
21. ' Adverting to the other limbs of the matter, the plea of the applicants/workers that they being senior workers were removed and junior workers were retained was not disputed by the company and it was pleaded that the removal of the applicants was under Standing Order 12(1) and not under Standing Order 13. Admittedly the company has not removed/discharged all the employees working in the factory and there is no evidence that section of the factory was closed or that employees of a particular group performing specified nature of work were removed.. The evidence rather showed that some of the employees were picked and their services were terminated without taking into consideration the seniority of the workers being removed and workers whose services were retained. The evidence available on the record reflects that the applicants were senior while junior workers performing similar nature of work were retained. In such eventuality provisions of Standing Order 12(1) could not be made applicable which in my view could be applied when all the employees of a particular section or all employees performing work of particular nature were to be removed but not in the case where some of the employees were removed and other employees performing similar nature of work were retained as in such circumstances the provisions of Standing Order 13 where applicable, limiting the choice of the employer to choose and pick the workers for their removal from service, as under Standing Order 13, where any workman is to be retrenched and he belongs to particular category of workman, the employer shall retrenched the workman who is the last person employed in the category. In such view of the matter termination of services of the applicants retaining juniors workers of same category is found to being violation of provisions Standing Order 13.
22. ' In such view of what has been discussed hereinabove it is held that the termination of services of the applicants/workers on ground of reorganization was not justified as the respondent/company failed to prove the ground for reorganization while the removal was also not within purview of Standing Order 12(1) as the circumstances of the case attracted provisions of Standing Order 13 and the respondent/ company violated the principle laid by Standing Order 13 by removing the senior workers and retaining junior workers of same category. Hence the order, dated 10-3-2005 of the respondent/company about termination of service of the applicants/workers is set aside. The applicants/workers specifically pleaded that after termination of their services they were not employed elsewhere and their such plea could not be proved to be innocent, hence the applicants/ workers are found to be entitled for back-benefits, accordingly the applicants are reinstated with back-benefits.
23. ' Appeals are allowed in the above terms with no orders as to cost.