DECISION ' This is an appeal against the order of learned Sindh Labour Court No, III at Karachi, dated 5-9- 1984, whereby the grievance petition filed by the 22 applicants was dismissed. Out of these 22 original applicants; 17 applicants filed appeal in this Tribunal which was originally decided by this Tribunal on 24-3-1988, but, the order of this Tribunal was set aside by Hon'ble High Court in the exercise of its writ jurisdiction and the appeal was remanded back for fresh decision. Out of the 17 appellants; appellants Nos. 2, 4, 5, 7, 9, 11 and 16 settled their matter with the respondents and withdrew the appeal. Appellant No, 1, Abdul Jabbar died on 1-4-1986 and his legal heirs were joined as party.
2. I have heard Mr. Shafique Qureshi, learned Advocate for the appellants and Mr. Ali Amjad, learned Advocate for the respondents.
3. The brief facts of the case are that admittedly the appellants were employed as workmen by the respondents whose services were terminated by letters, dated 20-4-1983, on the ground that the work had been given on contract to contractor as a measure of re-organisation and economy.
Being aggrieved by this order, the appellants served grievance notices upon the respondents and then filed grievance petitions before the learned Labour Court which was resisted by the respondents on the ground that because re-organisation became inescapable due to financial crises in the textile industry, the weaving section was given on contract.
4. The main contention of the appellants is that the action of the respondents was mala fide and in fact they had not given the weaving factory on contract to a genuine contractor, but, it had been given to a fake contractor. Appellants Muhammad Nazeer and Abdul Jabbar had examined themselves and had filed affidavits-in-evidence and they were duly cross-examined by the respondents. Appellant, Muhammad Nazir had stated in his cross-examination that out of 300 workers of the Plain Loom Section, 22 have been removed, while the rest were working under the contractor. He has admitted that the contract system had been introduced in the factory since 1979 and there were retrenchments in the departments granted to contractors from time to time.
Appellant Abdul Jabbar had also admitted in his cross-examination that he was working in the Plain Loom Shed where there were five lines in the Plain Loom Shed and each line comprised of 50 looms and that lines Nos. 1, 2, 3 and 4 had already been given on contract much earlier in the year 1980-1981. He had further admitted that other Loom Sheds viz. Auto-Loom Shed and Fancy Loom Shed had also been given on contract since 1980-81. He also admitted that his C.B.A. Union had not raised any Industrial Dispute against the contract system. Some other appellants had also filed affidavits-in-evidence but they did not turn up for cross-examination, therefore, I need not discuss their evidence.
5. The appellants also examined one Muhammad Hussain, Social Security Officer, who had stated that the Director had called upon the respondents to make payment of the contribution under Social Security Scheme for the Contractor's workers, but, the respondents raised objection as to their liability. He had further stated that they had called for the copies of the agreements between the Contractor and the Company and the matter was still pending. The appellant also examined Abdul Mateen, who states that he had taken on contract Line No, 4 consisting of 50 Looms and he did not pay Social Security contribution of the workmen. He had further stated that there is a Union of workers in the company, but, the workers employed by the contractors are not members of the union. The appellant also examined one Abdul Qadir, a Labour Officer of the Labour Directorate. He stated that on 19-1-1983, an application was received from Mazdoor Ittehad Union of Star Textile Mills, but, they had turned it down on the ground that in the referendum, Insaf Union had been declared as a certified C.B.A. The respondents had examined one Saadat Beg their Personnel Officer.
6. From the evidence on record, it is clear that the respondents had given certain works in the factory on contract to the contractors and this system was in force since 1979. The section in which the appellants were working is also alleged to have been given on contract and that is the reason which has been shown in the letter of termination of services of the appellants. The contentions of the respondents appear to be that the work was given on contract as a measure of economy and reorganisation. One witness, namely, Abdul Mateen who was examined by the appellants and who was one of the contractors has stated that since the Weaving Department had been given on contract, production was increased to about 35 to 40 or 45 metres of cloth per loom per shift; whereas previously the production was 16 to 25 metres per loom per shift. However, no such question has been suggested to the appellant. No doubt Mateen was examined by the appellants, but, he is contractor of the respondents and as such his evidence is to be considered with caution.
The appellant pleaded mala fides against the respondents. It is a settled law that the party who alleges the mala fides has to strictly prove mala fides. Witness Abdul Jabbar has admitted in his cross-examination that the respondents had retrenched workers irrespective of the union to which they belonged whenever the section of the department was leased out to the contractor. However, this admission is only with regard to the earlier contracts and not for the contract, in question. The respondents have examined Saadat Beg who has denied the allegation of mala fides but has not denied the averments of the appellants that all the 22 applicants were the office-bearers of the Ittehad Union and only these 22 workers were removed from service. He has denied that the management had to do anything with the disputes between the two unions, but, has admitted that lnsaf Union was the C.B.A. Which had raised a demand for the abolition of contract system but subsequently withdrew it. He has also not named the contractor to whom the Line No, 5 had been given on contract.
7. The question as to who has to pay the Social Security contribution of the workers engaged by the contractor in the factory, has now been set at rest by the Hon'ble Supreme Court in the case of Sindh Employees' Social Security Institution v. Consolidated Sugar Mills Limited reported in 1989 SCMR 888. Their Lordships have discussed the definition of word 'employer' as defined in the Social Security Ordinance and have observed, as under:-- "The definition of 'employer' has two extremely relevant features for understanding its meaning and scope. Firstly in the case of works and undertakings on behalf of the State, the contractor or the licensee carrying on the work has been made the employer. Secondly, in every other case that is in which State's interest is not in that manner directly involved 'the owner of the industry, business, undertaking or establishment in which an employee works' has been made the employer. On these two features, without for the present examining the concept of employee, the respondent being the owner would be the employer."
8. The question as to whether the Mill-owner could give out the work on contract and terminate the services of the workmen so that ground was considered at length by this Tribunal in the case of Messrs Emesco Industries Ltd. v. S. Ifran Ahmad reported in 1983 PLC 981; wherein after discussing extensive case-law this Tribunal came to the conclusion that termination of services of workers simpliciter on account of reorganisation including giving of contract of work to independent contractor was permissible provided such action was taken bona fide and not as a cloak to get rid of workers or to crush genuine union activities provided termination of services is not for reasons of misconduct and explicitly state reasons and in case of permanent worker either give one month's notice or one month's pay in lieu of notice.
9. The main contention of the appellants is that the action of the respondents is mala fide and that the work has not been given to genuine contractor and they have been victimised because of trade union activities. It has come in the cross-examination of Muhammad Nazeer that 300 workers are working in the Plain Looms Section out of which only 22 workers, who originally were applicants in the grievance petition have been removed, while all the other workers work under the Contractor. Admittedly 22 original applicants including present appellants were office-bearers of the `Mazdoor Ittehad Union' of the respondent mills. It has also come in the cross-examination of Muhammad Nazeer that in referendum of 1980, `Ittehad Union' was elected as C.B.A. And that he developed dispute with the General Secretary Mushtaq and finally he was elected 'General Secretary' in 1981, but, the Registrar did not accept his election. The matter went to High Court and the High Court issued Stay Order against this appellant. He has alleged in the affidavit that his election as General Secretary was cancelled by the Registrar in collusion with the respondents.
However, in 1982 `Insaf Union' was elected as `C.BA.' It has come in the cross-examination of appellant, Abdul Jabbar that Plain Loom Shed comprises of five Lines each of fifty looms and Lines 1 to 4 had already been given on contract in 1980-81. It is admitted that appellants were working in Line No,
5. The respondents have not given any cogent reason to show as to what was the necessity of giving Line No, 5 to the Contractor nor any such contractor has been named or examined. The evidence of Muhammad Mateen refers to Line No, 4 and not the Line in which the appellants were working. There is no evidence as to what was the production of per loom per shift in Line No, 5 as no such question has been suggested to the appellants who tendered themselves for examination. It cannot be mere coincidence that out of 300 workers working in Plain Looms Shed all continue to work under. Contractor except 22 applicants, including appellants who happened to be office-bearers of the Ittehad Mazdoor Union', which admittedly had disputes with Insaf Union which admittedly is C.BA., who withdrew their demand for abolition of contract system.
This admission of R.W. Saddat Beg lends support to the allegation of the appellants of collusion between the Insaf Union and the respondents. This is strong circumstance supporting the contention of the appellants that they have been mala fide removed from service due to their trade union activities and that the work has not been given out to any genuine contractor.
Evidence on oath of these two appellants has not been rebutted, by any credible evidence. Even in the case of Messrs Emesco Industries Limited referred to above this Tribunal had held retrenchment of workman was permissible where work was given out to contractor only if such action was taken bona fide and not as a cloak to get rid of workers or to crush union activities.
10. In view of above discussion, in my opinion, the action of the respondents in terminating the services of the appellants in the circumstances is mala fide and not sustainable. The appeal of the appellants, except those who have withdrawn their appeal is, therefore, allowed and they are ordered to be reinstated in service with full back benefits. With respect to appellant No, 1, Abdul Jabbar, who died on 1-4-1986 he will be deemed to have continued in service upto the date of his death and his legal heirs would be entitled to his full back benefits upto that date and other dues which are admissible to the workman who dies during the course of his service.