DECISION ' These are five appeals which I propose to dispose them by a single order as the same carry common question of facts and law. The appeals arise of common impugned order, dated 4th November, 1984 by the Labour Court No, I at Karachi. The Labour Court No, 1 had allowed the petitions under section 25-A, I. R.
0., 1969 and directed the respondent-company to reinstate all the five respondents in service with full back benefits within a fortnight. The appellant-company filed appeals which I propose to dispose of by this single order.
2. The facts stated in the grievance petitions of the five respondents are that they were employed by the appellant-company about 25 to 35 years back. At present the respondents were working as foremen and were serving in the company diligently. The appellant-company by its letter, dated 17th May, 1982 terminated the services of all the five respondents on the ground that the company was running into huge losses and were in tight financial position. Re-organizing of the appellant- company took place and the present five respondents alongwith 150 were retrenched and the posts of the present respondents were abolished.
3. The respondents sent grievance notices to the appellant-company on 6th June, 1982 and the notices were replied on 16th June, 1982 rejecting their notices. The appellant-company maintained and reiterated that due to heavy loss and re-organization the company has decided to abolish the posts of the respondents.
4. The stand taken by the appellants was that the respondents Were employed as foremen and were performing the duties purely of supervisory nature and, therefore, they were not workmen. The appellant-company further in reply statement observed and admitted that the services of the respondents were terminated on 17th May, 1982 on the grounds of tight financial position and recurring losses and, therefore, the posts were abolished. It was denied that the appellants had not adopted the legal procedure. It was contended that since the respondents were not workmen it was not obligatory on the part of the appellants to follow the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, and it was denied that junior workmen were retained and the seniors removed from the jobs.
5. Both the parties led evidence before the Labour Court. Each respondent filed his own affidavit besides the affidavit of Mr. Abdul Nabi, Mohammad Suleman and Mohammad Amin. On behalf of the appellants, affidavit of Masood Ahmed Geelani and one from Shabbir Company of Chartered Accountants were filed. The learned counsel argued the appeal before me.
6. The points involved in these appeals are whether the respondents were workmen for the purpose of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1969, whether the services of respondents were terminated and whether their termination was bona fide and according to law. These points were argued and agitated in the appeals before this Tribunal.
The respondents in their evidence have maintained that although they were foreman but they worked to repair the Water Pumps and other machines and that now machines were manufactured by them. According to the evidence of appellant, a foremen was doing supervisory work and looked after the works done by the workers. It was not the duty of a foreman to repair the pumps and to manufacture the machine. Syed Anwar Ali performed managerial duties by taking work from the workers and his total emoluments were Rs, 2,175 per month. Similarly the other respondents were in the same position. There is sufficient evidence on record to show the supervisory nature of duties performed by the respondent on the basis of their own admissions in the cross-examination. The respondent Anwar Ali has admitted that he has been recommending increments, promotions, disciplinary actions and transfer etc. In respect of the workers working under him. The evidence on the whole is that the function of a foreman was to supervise the work of other subordinates. The Supreme Court in 1971 P LC 1 at page 5 was pleased to hold that the foreman is the person who holds a position of supervision in a factory and as such is not a workman. The following observation is relevant :- "The mere fact that he had to do something by his own hands by way of checking or testing work done by other workman did not make his work manual work within the meaning of this clause. In the case of Crushing (Pakistan) Limited Workers Union, Lahore v. Messrs Crushing (Pakistan)
Limited, Lahore, it was observed as under :- Workman. Foreman with functions of supervisor, in character not a workman. Not covered by expression 'any person' in section 2 (h)"
7. In another case of Rahat Zafar Qureshi v. Star Textile Mills Limited , this Tribunal in an identical case, has held as under :- "Finally, there are numerous letters/memos. On record all written by the applicant, recommending appointments to be made, actions to be taken against unsuitable employees, criticising or commenting on the work of the employees and finally fixing duties to be performed by the employee in the Electrical Department. These pieces of evidence fully establish that the appellant was engaged in a supervisory capacity and was not employed or required to do manual work' It is possible that on occasions he may have found it necessary to do some manual work, but that was not his primary duties which appears to have been to take from the employees of the Electrical Department and guide them in the performance of duties."
8. In the case of Naeem Wahid v. S. L. A. T., the Division Bench of Karachi High Court has observed as under :- "It is to be considered whether the petitioners are workmen for the purpose of the said Ordinance, since their claim is based on the provisions of Standing Order 12 particularly clause (3) thereof. In1 2 order that an employee should be a workman for the purpose of the said Ordinance, the nature of his work must be either manual, whether skilled or unskilled; or clerical. According to this definition a 'workman' is employed in an industry or commercial establishment to do skilled or unskilled work which is manual or clerical. Manual work entails physical exertion to distinguish from the mental or intellectual exertion involved, in the clerical work. Both the manual and clerical work in the sense these terms are used here, connote that it is more or less a routine work not requiring any great amount of initiative imagination, direction, control and supervision in discharging the same. The true nature of duties performed by the employee is the determining factor in ascertaining if he was a workman or not within this definition. In case the manual work form only a small and an auxiliary part of his responsibilities or he is incidentally required to prepare a statement, maintain a register or submit a report he cannot be considered to be a workman if otherwise his main and primary duties do not belong to this category. The true test, therefore, is to look to the direct immediate, and the substantial part of the work for which he is employed and not to the sundry duties incidentally performed by him."
9. The arguments that the respondent was treated as a worker do not ipso facto taken him to a worker. In a case reported in NLR 1984 (Labour) 169 at p. 169, the Division Bench of Karachi High Court has observed as under :- "If the petitioner was not a workman and not entitled to relief on account of dismissal from the service under the relevant labour law, the mere fact that he had been treated as a workman by the respondent No, 3 could not convert his status of non-workman into a workman."
10. It has also been argued by the counsel for the appellants that since the respondents did not have the power of hire and fire they could be called as workman. In this respect there is a decision of Appellate Tribunal Baluchistan reported in 1983 PLC 810 holding as :- "In my view the power of hire and fire cannot be regarded as sole criteria for judging whether the person was or was not a 'workman'."
11. The above authorities indicate that the respondents were not workmen under Standing Orders Ordinance, 1968 and, therefore, not entitled to invoke the jurisdiction of the Labour Court in terms of section 25-A,
1. R.
0., 1969.
12. Now I would advert to the contention of the appellant-company that the respondents already have received their dues and they are no longer as aggrieved persons. Masood Hassan in his affidavit has produced D the relevant records. Even the respondents in their cross-examination have admitted the receipt of the payments vide Annexures R-12 and R-13 and other annexures. In this respect the Law is as enunciated in 1983 P L 777. The following extract is relevant :- "I am, therefore, of the view that the respondents Faqir Hussain and Ghulam Nabi had received all their dues in full and final settlement and had not only signed the full and final settlement statement but also back payment vouchers. Having received their dues in full and final settlement they ceased to be aggrieved persons entitled to file grievance petition under section 25-A of I. R. O., 1969 as held by a Division Bench of the Karachi High Court in the case reported as Futehally Chemicals Limited v. Majeed Baig. The said decision was respectfully followed by this Tribunal in the case of Muhammad Siddique v. Premier Tobacco Industrial Limited."
13. In the case of Rehman v. Sind Labour Appellate Tribunal , the Division Bench of the Karachi High Court has observed as under :- "On a reading of paragraph 9 of the aforesaid Judgment, it would appear that there was a factual dispute in that case and the workman's case was that he had not been paid his wages at all. The instant case is completely distinguishable, because nowhere the petitioner had raised the contention that he had not been paid his wages or that the cheques which were sent to him were not credited to his account and encashed. The case is, therefore, clearly distinguishable. We are,3 therefore, clearly of the view that the petitioner by accepting the accrued wages, notice salary and his provident fund collection had expressed satisfaction, and he had no grievance left on the basis of which he could invoke the jurisdiction of the Labour Court.
' Mr. Shahani further contended that since no evidence has been led on the point that the petitioner was entitled to any further amount than what has been paid to him, the order of termination of services of the petitioner was mala fide. We are of the view that this argument is completely misconceived. By his conduct, the petitioner had accepted the stand of the respondent in regard to the wages and dues payable to the petitioner and such amount having been tendered by the respondent and accepted by the petitioner, extinguishes any right which the petitioner had."
14. Similarly the case of Taj Muhammad v. Karachi Pipe Mills Ltd. at p. 978 supports the above view.
15. The most important point involved in this case is that the retrenchment took place on account of the fact that company had incurred' losses. The point is controverted by the respondent but the evidence shows that the company did incur losses. Shaikh Muhammad Amin and Chartered Accountants of Messrs Gangat and Company, have stated that the company had incurred financial loss during the year 1981 and 1982 and has produced the relevant record to this effect. It is open for the management to re-organize its business and to retrench workers surplus to its requirements in case of loss. In the case of Bayer Pharma Limited v. Mirza Hussain Akhtar , this Tribunal has held as under :- "It is well-established preposition 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 victimizing his employee or as a cloak to get rid of the services of any particular employee. 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 Annanthanarayanan, 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 Ghatge and Patil Concerns Employees' Union v.
Ghatge and Patil (Transport) (Pvy) Limited. 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."
16. To support this view host of authorities exist, namely, 1981 PLC 615, 1982 PLC 391, 1969 PLC 459 and 1983 PLC 1286.
17. The most important evidence on record is that Shabbir Gangat, Chartered Accountant. He, on oath has stated that the firm Messrs Gangat and Company, are the Chartered ' Accountants and they have audited the accounts of the company for the year ended on 31st December, 1980 and 31st December, 1981. He claimed that the company has suffered the losses of Rs, 1, 02,29,201 in the accounting year ended on 31st December, 1980 and Rs, 46,28,678 for the accounting year ended on 31st December, 1981. So, the overall position appears to me that the company had suffered huge losses and were compelled to retrench the employees. To sum up the above discussion, I have come to the conclusion that the appellant-company had run in huge losses and that they had actually retrenched along with these five foremen, a number of other employees. They had a right to re-organize their business. There is no evidence that juniors were retained and seniors were4 5 retrenched. I do' not agree with the learned Sind Labour Court No, 1 and hereby set! Aside his impugned order. The five appeals of the appellant management are accordingly allowed. 1982 PLC 289 1984 PLC 352 1983 PLC 210 1983 PLC 977 1981 PLC 24 at 27