This is a petition filed by the Secretary General, MCP (Mechanised Construction of Pakistan Limited)
Employees Federation, MCP Workshop, Faisalabad, against the Chairman, OCP (MCP) and the M.D.
MCP. Under Section 34 of the Industrial Relations Ordinance, Standing Order 11-A of the West Pakistan Industrial & Commercial employment (Standing Orders) Ordinance, 1968. Sections 22- A(8)(g) and 22-B(3)(a)(b) of the Industrial Relations Ordinance, 1969 and Regulation 32 of the NIRC (Procedure & Functions) Regulations, 1973.
2. The facts in brief are that the Mechanised Construction of Pakistan is a Private Limited Company registered under the Company's Ordinance, 1983. By letter dated 30-12-1986, the Planning & Development Division of the Government of Pakistan conveyed the following decision of the ECC:
(a) MCP may be wound up voluntarily.
(b) MCP's liability to GOP amounting to Rs.296.0 million may be written of.
(c) Liabilities to the Federal agencies, Provincial Governments and others which need reconciliation, be reconciled by 31-3-1987 and the net assumed by the GOP for payment.
(d) Payment owed to the foreign banks amounting to Rs.69.972 million in foreign exchange, after adjustment for part of the interest element which they may agree to waive, be paid by GOP immediately.
(e) Liabilities owed to the nationalised Pakistani banks amounting to Rs.1203.201 million in local currency and Rs.1534.879 million in foreign exchange be assumed by GOP, and the payment modalities settled with PBC within one year of MCP's liquidation.
(f) NTCC may be made responsible for attending the post liquidation matters.
(g) WAPDA may be directed to take back the workshops and its remaining deputationists immediately but not later than 31-1-1987.
(h) For MCP's own employees, the principle of 'golden handshake' may be adopted.
(i) The Panjnad-Abbasia Head-works project may be transferred to OCP for completion.
The Planning & Development Division asked the Ministry of Water & Power to take back the WAPDA's workshops and its remaining deputationists immediately but not later than 31-1-1987 and also asked the Chairman, OCP to initiate action on the remaining decisions of the ECC. The employees of the MCP who had been on deputation from WAPDA were repatriated and we are not concerned with them. This petition is in regard to the other employees who are MCP's own employees and who in the result of the decision to wind up the organisation are facing retrenchment. In regard to these employees the OCP issued, on 11-1-1987, the following letter of Option:- Dated: 11-1-1987.
Subject: Voluntary Winding up of MCP.
1, We have to inform you that competent authority has taken a decision for voluntary winding of the company under Companies Ordinance, 1984. We are in the process of implementing this decision according to law and all steps shall be taken strictly in accordance with law.
2. We would like to have your option on the following:-
(a) Whether you agree to accept ex gratia payment equal to 12 months gross salary in addition to your normal dues such as encashment of leave salary according to latest laws, payment of gratuity due etc, and agree to be released from service through resignation.
(b) You would like the law to take its normal course.
3. Please indicate your option in the form below by 24 January, 1987 Sd/- Chairman, OCP.
A number of employees are said to have accepted the offer of ex gratia payment equal to 12 months gross salary in addition to normal dues set forth in the option letter for their release from service.
3. Nevertheless, the issuance of the letter was challenged by the petitioner as constituting unfair labour practice. His case is that in spite of the decision of the ECC, the establishment of the MCP could not be closed down except in accordance with the provision of Standing Order 11-A, that the principle of golden handshake would apply only after the necessary permission from the Labour Court for closing down the Establishment has been obtained and that, therefore, the issuing of the option letter at this stage when permission of Labour Court has not yet been obtained was violative of the provision of Standing Order 11-A and constituted unfair labour practice. The petitioner also objected to the method adopted, by the option letter, of inducing the workers to accept the offer and to agree to be released from service through resignation.
4. Notice was issued to the respondents and an ad interim order for maintenance of Status quo, was passed on 19-1-1987. In the comments subsequently filed on behalf of the respondents, it was categorically held out that the decision of voluntary winding up the Company "will be implemented only and strictly in accordance with law". It was however, asserted that the Company was under no legal obligation to make the offer of ex gratia payment and that it could terminate the services of 50% of the workmen without contravening the law in Standing Order 11-A. It was denied that the letter of option issued by the Company constituted unfair labour practice or furnished any cause of action to the workers.
5. Later, in the proceeding, it was stated on behalf of the respondents that the Company had applied to the Commission for permission to close down the whole of the Establishment under Standing Order 11-A and it was prayed that the petition be dismissed as having become infructuous. This was resisted on the ground that without waiting for the grant of such permission, the Management was forcing resignation of the workers by the Option letter Since it was asserted on behalf of the Company that the workers are themselves prepared to accept, and a large number of them has in fact accepted, the offer of the golden handshake, some of such employees as had so accepted the offer were called and their statements recorded. Their statements made it clear that they had accepted the offer because according to the letter of option, they would, in the alternative get nothing except in the normal course of law.
6. During the hearing of the main petition, its maintainability was questioned on behalf of the respondents who asserted that as no right of the CBA was involved, Section 34-IRO, was not attracted, that as the Company was involved in construction work, all that the workers could seek was the benefit under Standing Order 14-A and that the provision of Standing Order 11-A was not applicable and consequently no case of unfair labour practice would arise. The case may not fall under Section 34 IRO, but I see no reason why S.O. 11-A is not attracted to the case. Under the Standing Order 14-A a worker retrenched or discharged by any employer engaged in the construction industry due to completion, cessaion or discontinuanc of work, is entitled to preference for employment in any other similar work undertaken by the employer within a period of one year. The provision of S.O. 14-A has therefore, no bearing on that of S.O. 11-A under which the employer is forbidden from closing down the whole of the establishment without prior permission of the Labour Court, except in the event of certain contingencies. Obviously, it is a case of closing down the whole of the Establishment. This is paten from the decision of the ECC as contained in the letter of the Planning Development Division dated 30-12-1986 already cited above and also from the pleadings of the respondents themselves which is to the effect that "a decision in principle has been taken for the voluntary winding up of the Company". The term "establishment" used in S.O 11-A includes an establishment of a person who, directly or indirectly, employs workmen in connection with any construction industry, 'Construction Industry' is defined in the West Pakistan Industrial & Commercial Employment (Standing Orders) Ordinance, 1968 and it is the Company's own case that they are Construction industry. That being so, permission of the Labour Court would be necessary before termination of the employment of the workers. The respondents must have realised this legal position which is obvious from the fact that they felt compelled to make the application to the Labour Court for permission to close down the establishment.
7. It was next argued on behalf of the respondents that even under S.O.11-A, they were entitled to retrench not more than 50% of the workers without giving violence to the provision of that Standing Order. I have not understood the reason which has prompted the to advance such argument. They have not retrenched any workman on that basis, nor is the Government decision which they are implementing, to that effect. The decision is clearly for winding up of the entire Establishment of MCP. In that background, it does not lie in their mouth to say that they could proceed to retrench upto 50% of their employees. They could do that only if it was clear from the attending circumstances that they had no intention now or in the near future to close down more than 50% of their establishment. This not being the case, any attempt on the part of the Company to proceed to retrench 50% of the workers progressively in order to ultimately get rid of their workers, will be a device only to circumvent S.O. 11-A and thus will attract S.15(1)(i) of IRO. It is clear that the task before the Company is to voluntarily wind up itself and any retrenchment of workers is to be viewed in that context and towards that purpose. Prior permission of Labour Court will, therefore, be necessary.
8. Viewed in this context, the letter of option issued to the workers is against the spirit of S.O. 11-A as also the Government's own decision. The decision of the Government is to offer the principle of golden handshake to all the MCP's own employees who are to be retrenched in consequence of the winding up of the Company. The Option letter however, makes a distinction inasmuch as it denies the benefit to those who refuse to accept the golden handshake at this stage. The Option letter also offends the provision of S.O. 11-A because the offer has been made in order to induce them to resign before permission for closing down the Establishment has been obtained. The argument that the workers were accepting the option on their own free accord was demolished by the statements made before me. In Al-Habib Textile Bleaching v. Al-Habib Textile Bleaching Mills Employees Union 1975 PLC 246 where the Management had obtained resignations of its workers by creating impression that it was closing the whole mill permanently and if the Mill was closed, the workers would get no payment of their dues and a plea had been raised against the re- employment of the workers, that it was not a case of retrenchment within the meaning of Standing Order 14, the plea was repelled by the Labour Appellate Tribunal with the observation "I am not prepared to accept the second contention of Mr. Shaukat Ali also, as I have come to the conclusion that the workers of the Mill had resigned under misapprehension and wrong impression created by the Management. They got the impression that if they did not resign, they would not be able to get their dues. The Mill, at any rate, was going to close, therefore, it was best to resign and get their dues".
9. In the circumstance, I accept the petition and direct the Respondents to maintain the status quo in regard to MCP's own workers who are members of the petitioner federation as on the date o presentation of the petition, that is 19-1-1987, until permission has been obtained from the Labour Court for winding up the establishment. Thereafter, the principle of golden handshake will apply to all the said workers whose services will then be terminated. This will however, not stand in the way of those workers who without waiting for the outcome of the Company's application made before the Labour Court, want by their own volition to leave the MCP on accepting the benefit of golden handshake. For this, either the worker concerned ma have to appear before the Labour Court and make a statement o submit his affidavit through either party in this regard.