' The services of the contesting respondent, Mirza Hussain Akhtar, were terminated by the appellant Company with effect from 13-3-1978, on the ground of retrenchment due to reduction in the quantum of work in its Analytical Department. The respondent challenged his discharge before the learned lInd Labour Court which dismissed his grievance petition on the ground that he was not a workman and hence his grievance petition was not maintainable. The respondent preferred an appeal to this Tribunal which set aside the said order of the learned Lahour Court, holding that the respondent was a workman both for the purposes of the Standing Orders and the Industrial Relations Ordinance, 1969, and remanded the case to the learned Labour Court for decision on merits. On remand, the Labour Court has held that there was no justification for terminating, the services of the respondent and that the plea that there was reduction of work in the Analytical Department of the appellant Company was devoid of substance. It accordingly by its decision, dated 14-1-1980, set aside the order of discharge of the respondent and directed the appellant Company to reinstate him in service with full back benefits. The appellant-Company has challenged this decision by way of appeal to this Tribunal.
2. I have heard Mr. Qamaruddin, the learned counsel for the appellant Company, and Mr. Samo, who appeared for the respondent. I have also recorded the further statement of Khurshid Ahmad, the Plant Manager in the appellant Company, for the purposes of clarifying the position as to the quantum of work in the Analytical Department of the appellant-Company as depicted in the annual report produced before the learned Labour Court.
3. The sole ground on which Mr. Syed Qamaruddin Hassan assailed the decision of the learned Labour Court was that it is based on misreading and misconstruing of evidence. The learned counsel contended that there was bona fide retrenchment in the appellant-Company and the termination of services of the respondent was on account of reduction in work in the Analytical Department of the appellant-Company. In suppor of this contention, the learned counsel relied upon the annual report for the year 1977, which indicates the quantum of work in the Analytical Department for the year 1977 and also the preceding year. That report depicts the following picture :- Country Pakistan AnnualManufacturinPage 7 Of 14 Name of companyBayer-Pharma Limited.Report1977 Date : 12-3-197 5.3. Number of performed analyses (=number of issued certificates; 1.2.3.4.
5.3.1. In the laboratory of the company Previous yearYear report On raw materials 161 156 On packing materials534 344 On finished goods 710 741 Others 756 493 Total 2,161 1,743 Number of rejects 35 31
4. There is, however, a dispute in respect of the figure for the packing materials for the year 1976. As the copy of the report which was produced by witness Khurshid Ahmad before the Labour Court was not very clear, the figures for this item for the year 1976 could be read both as 534 as well as
334. It appears that both the learned Labour Court as well as Khurshid Ahmad, while giving evidence before the learned Labour Court, adopted the letter figure. That this figure is not correct is clear on adding up the items for the year 1976. If the figure had been 334, the total would have been only 1861. Since the total of the items, however, is 2,161, it clearly indicates that the figures for the item of packing materials was 534. For the purposes of further clearing up their discrepancy, Khurshid Ahmad was required to produce the copy of the report which he had sent to the Managing Director, which he has done, and was further examined by this Tribunal in regard to it.
The said copy clearly shows that the figure in respect of packing materials during the year 1976 was 534. In view of this evidence and the clear copy of the report which Khurshid Ahmad brought from the record of the Managing Director of the appellant-Company, it is established that, as compared to the year 1976, during the year 1977 not only there was substantial reduction in the total number of units in respect of which analyses was performed by the Analytical Department, but there was substantial reduction in the main items relating to packing materials and others, while there was only a nominal increase in the remaining 2 items which relate to raw materials and finished goods.
5. Mr. Samo, the learned counsel for the respondent, while not disputing the normal right of the Management to effect retrenchment, submitted that what has to be examined in the instant case is the ground on which the retrenchment is purported to have been made and if that ground is found to be untenable the retrenchment would be not for bona fide reasons but would be mala fide. Elaborating his arguments, the learned counsel contended that the annual report in fact did not bear out the contention of the appellant Company that there had been reduction of work in the Analytical Department. The learned counsel submitted that the main work of the Analyst was the examination of the raw material and finished goods and both these items admittedly showed an increase over the preceding year. He further suggested that reduction in the item relating to packing material during the year under report may have been due to lesser receipt or production of packing materials. He further submitted that the item of `others' in the annual report does not indicate that it comprises for or relates to and even Khurshid Ahmad, in his evidence before the learned Labour Court has not explained this item. However, Khurshid Ahmad in his evidence before this Tribunal, explained that this item includes the analysis of products during different stages of manufucture. Whatever may have been the reasons for the reduction in the number of analyses carried out in respect of the item of packing materials and irrespective of the fact whether Khurshid Ahmad's explanation as to the composition of the miscellaneous item "others" is correct or not, the annual report does show that during the year 1977, there was a substantial reduction in the quantum of work in the Analytical Department, though the staff in that Department remained the same.
6. In order to appreciate whether the reaction in the quantum of work in the Analytical Department justified reduction in staff, I would briefly discuss what constitutes retrenchment and when it is permissible and when it can be considered to be invalid. It is a well-established proposition that it is within the discretion of an employer to organize and arrange his business in the manner he considers best. The law, however, requires that in effecting retrenchment for any reason whatsoever, the employer must be acting bona fide and not for the purposes of victimising his employees or as a cloak to get rid of the services of any particular employer. Justification for the retrenchment has, however, to be assessed by the reasonableness of a decision taken by the Management in a particular situation of actual or threatened losses or actual or expected reduction in the quantum of work. As was pointed out by Ananthanarayanan, J. In the well-known case of Film Distributors Employees' Association v. Metro Goldwyn Mayer (India) Ltd., reasonableness of retrenchment is not to be assessed as the vindication of that step by future events and by the substituted judgment of any other agency, judicial or otherwise, which has no responsibility or hazard in the industry. I may also refer to the observations of Hidayatullah, J., in the Supreme Court of India in the case of Ghage & Patil Concerns Employees' Union v. Ghatge & Patil(Transport) (Pvt.) Ltd. The learned Judge expressed himself as follows in that case :- "A person must be considered free to go arrange his business that he avoids a regulatory law and its penal consequence which he has without the arrangement, no proper means of obeying. This, of course, he can do so long as he does not break that or any other law."
6. In Workmen of Subong Tea Estate v. Subong Tea Estate, Supreme Court of India, summing up the law on the question retrenchment, laid down the following propositions :-
(1) the Management can retreach its employees only for proper reasons, which means that it must not be actuated by any motive of victimization or any unfair labour practice;
(2) it is for the Management to decide the strength of its labour force, and the number of workmen required to carry out efficiently the work in its industrial undertaking must always be left to be determined by the Management in its discretion;
(3) if the number of employees exceeds the reasonable and legitimate needs of the undertaking, it is open to the Management to retrench them ;
(4) workmen may become surplus on the ground of rationalization or on the ground of economy reasonably and bona fide adopted by the Management or of other industrial or trade reasons; and
(5) the right of the employer to effect retrenchment cannot normally be challenged but when there is a dispute in regard to the validity of the retrenchment, it would be necessary for the Tribunal to consider whether the impugned retrenchment was justified for proper reasons and it would not be open to the employer either capriciously or without any reason at all to any that it proposes to reduce its labour force for no rhyme or reason."
8. So far as the Law in Pakistan is concerned, retrenchment would be permissible as long as it does not infringe the provisions of the Standing Orders, particularly Standing Order 12, and other Labour1 Laws. If, the services of any workman are retrenched for any reason, including on the plea of retrenchment, he is entitled to file a grievance petition under section 25-A, I. K.
0., as has been done by the respondent workman, and thereupon the Labour Court is entitled to go into all the facts of the case, as provided in subsection (5) of the said section. It is thus the duty of the Labour Courts to see that retrenchment has not been resorted to as a cloak to get rid of a workman who is found inconvenient for any reason or for any extraneous reason.
9. In the instant case, as already pointed out, the retrenchment, according to the appellant- Company, was on account of reduction in work. I have already shown, on the basis of the annual report, that there was substantial reduction in the work in the Analytical Department though some items of C work undoubtedly showed an increase. That it is possible for the appellant-Company to carry on the work in the Analytical Department with only 2 analysts is established from the fact that right from March 1978, when the services of the respondent were terminated, up to the present date, no other analysts has been appointed and the work has been handled by the 2 analysts who are admittedly senior to the respondent-worker. No doubt, at the time that the services of the respondent were terminated, there were 2 trainee analysts namely Miss Shahida and Syed Abbas, but both of them admittedly quitted the Analytical Department shortly thereafter. Miss Shahida left on completing her training, while Syed Abbas was absorbed in neither Department of the Company after completing his training. Furthermore, both of them were mere trainees. As such, the mere fact that these two persons were allowed to continue with the appellant-Company after the termination of the services of the respondent, for the sole purpose of completing their training, does not indicate that there was either need for mere analysts or that the junior-most analyst was not retrenched.
10. I have carefully examined the question whether the retrenchment of the respondent was due to victimization but I find no evidence in support of this allegation. No doubt the respondent, in his evidence before the Labour Court, has alleged a dispute with the Plant Manager, but he has neither substantiated his allegation nor was able to give adequate reasons for the same. The Plant Manager himself has strongly denied any untoward incident or dispute between him and the respondent-workman.
11. I have also considered the question whether there could be reduction of work in the Analytical Department of the appellant-Company without corresponding reduction of work in its other sections, particularly on the production side, with consequent retrenchment or reduction of employees in these sections. But, looking to the somewhat complicated nature of the work involved in the manufacture of pharmaceutical products, it is not possible to say that reduction of work in the Analytical Department is only possible in these cases where there is corresponding reduction in the other sections of the Pharmaceutical Company. In any case, no question in regard to this issue was put to any witness and, therefore, I am unable to hold that reduction of work in the Analytical Department would only be possible if there was corresponding reduction of work in the other sections of the appellant Company.
12. The upshot of the above discussion is that there appears to have been bona fide retrenchment in the Analytical Department of the appellant Company in consequence of reduction of work and hence no fault can be found with the order terminating the services of the respondent workman on that ground. I would accordingly set aside the impugned order of the learned Labour Court and allow the appeal. 1962 PLC 5151