DECISION ' This is an appeal against the order of the learned Presiding Officer, First Sindh Labour Court at Karachi, dated 16-3-1989, whereby the grievance petition filed by the appellant was dismissed.
2. The brief facts of the case are that the appellant was admittedly employed by the respondent in 1980. His services were terminated on 31-12-1987 by written order on the ground that due to uneconomic productivity it was decided to stop the production in the establishment and due to abolition of his department, his services had become redundant and, therefore, were terminated.
He being dissatisfied with this order, served grievance notice upon the respondent Failing to get any relief he filed grievance petition before the learned Labour Court which was resisted by the respondent on the ground, that the appellant was Incharge of the Department and he was not a workman and further that the termination of service was due to bona fide retrenchment.
3. I have heard Mr. M.M. Kazim, Advocate for the appellant and Mr. Mohammad Humayoon, Advocate for the respondent and have also gone through three record and proceedings of the case.
4. The learned Labour Court held the appellant to be workman and no gross-objection or appeal was filed by the respondent against this finding of the learned Labour Court which is based on sound reasoning and I see no reason to disagree with this finding.
5. Admittedly, the management of establishment has ceased to operate the production process in their establishment and the running of factory has been given on contract which is being carried under the strict supervision, control and guidance of the respondent. The contract agreements have been produced as Exhts. "R-2", "R-3" and "R-4". Mr. Mirza Kazim has raised objection that these contractors are the employees of the respondent and the factory has not been given on contract but the respondents are running it through their employees. The mere fact that the contractors are ex-employees would not debar them from taking the contract and there is no evidence to show, that the contractors are not running the factory, though admittedly the respondents do exercise control and supervision, which is necessary because they would be marketing the goods. Even the appellant has admitted in his cross-examination that the work is being done by the contractors in the respondents' establishment since 1-1-1988. This contention of Mr. Mirza Kazim, therefore has no force.
6. It is contended that the respondents have violated the provision of Standing Order 11-A of the Standing Orders Ordinance, 1968. To appreciate the contention of the parties it will be pertinent to refer to this provision which is reproduced as under:- "11-A. Closure of Establishment.-- Notwithstanding anything contained in Standing Order 11, no employer shall terminate the employment of more than fifty per cent of the workmen 'or' close down the whole of the establishment without prior permission of the Labour Court in this behalf, except in the event of fire, catastrophe, stoppage-of power supply, epidemics or civil commotion."
7. It is an admitted fact that when the respondent informed the workers, I, that they intended to give the factory on contract, all the workers excepting the present appellant tendered their resignations and accepted their dues alongwith six months salary as special bonus as full and final settlement of their claims. The services of the appellant were however, terminated by the termination order dated 31-12-1987, apparently because he refused to resign.
8. There is conflicting evidence whether the respondent had closed their establishment. Mr. Sohail Ahmed, General Manager of the respondent has clarified this position by stating that they did not obtain permission from the Labour Court for closing the factory, as the factory did not cease to work but they continued to work it upto 30-12-1987, under their management, but thereafter since 31-12-1987 the factory continues to work on contract basis, after all the employees resigned from their employment.
9. Mr. Muhammad Humayoon have relied upon the case of South British Insurance Employees Union v. The Sindh Labour Court No, 4 and others, reported in 1975 SCMR 49, wherein their Lordships have observed as under:- "The Standing Order 11-A does not stipulate that the application to the Labour Court for permission to close down should be the first step in the process. All that it prescribes is that no employer shall close down the whole of its establishment without prior permission of the Labour Court in this behalf. Thus the Labour Court's permission might indeed be the last step in the process of closing down, or an application in this behalf may be made by the employer simultaneously with any other step that he may have to take to wind up his business and close down his establishment. The Standing Order does not appear to spell out any sequence in which the various steps for closing down an establishment have to be taken by an employer."
10. This authority pertains to the closure of the establishment. However, in this case apparently there is no closure of the establishment. However, in this case apparently there is no closure of the establishment. It may also be pointed out that after this decision of the Hon'ble Supreme Court, Standing Order 11-A was amended under Act No, 11 of 1976 and words 'terminate the employment of more than 50% of the workmen or' were added in this Standing Order after words 'no employer shall' and before words 'close down the whole establishment.' It is submitted by Mr. Mirza Kazim that this authority of the Hon'ble Supreme Court would not be applicable in case where services of more than 50% of the workmen were terminated by the employer, as the termination of the service would be last step and not first step in the process of termination of the service.
11. Mr. Mirza Mohammad Kazim has further contended, that the resignation obtained by the respondents from other workers was by deceitful means and cannot be considered as voluntary resignation because they were made to resign on being given to understand that they would face difficulties after the factory was given on contract. In support he has relied upon the decision of this Tribunal in the case of Al-Habib Textile Bleaching Mills, Karachi v. Employees Union and another, reported in 1975 PLC 246. In this case the workers were made to resign due to wrong impression, that mill was being closed for good. However, mill started operating soon after their resignation.
The management in the circumstances was held to have resorted to clever device to obtain resignations and to conceal real intention of termination of services of workmen. The management in the circumstances was directed to comply with provisions of Standing Order 14 to take back the workers in order of seniority. He also relied upon the case of Shamas Textile Mills Limited v.
Muhammad Iqbal and another, reported in 1986 PLC 52. In that case the Labour Court held that the resignation said to have been submitted by the employee was forced out of him and did not affect the employment of petitioner and thereof ordered that he should be reinstated and paid back benefits. The decision was challenged in the Writ jurisdiction. The Hon'ble High Court considering the facts of the case, held that immediate and subsequent conduct of the employee following such submission of resignation also supported conclusion of voluntary character of resignation and, therefore, dismissed the writ petition. In both the cases the validity of resignation was challenged by the affected persons, through union in the first case and by the worker in the second case. In the instant case the validity of the resignation was not challenged by the affected persons and, therefore, no finding can be given as to whether these resignations were not voluntarily.
12. The next contention of Mr. Mirza Muhammad Kazim is that after the resignation of other workers the appellant remained sole worker, whose services were terminated on 31-12-1987, and thereby the employer terminated the services of more than 50% of the employees in violation of Standing Order 11-A. Mr. Muhammad Humayoon argued that S.O. 11-A was not the relevant provision, but S.O.
12(3) is relevant which deals with the termination of the service of an employee and which has been complied with by the management. Standing Order 12(3) cannot be read in isolation from S.O. 11-A Standing Order 11-A contains embargo on termination of services of more than 50% employees without prior permission of the trial Court. S.O. 12(3) lays down the procedure for termination of services of the employees. Even after the permission is obtained from the Labour Court, under Standing Order 11-A, the procedure as laid down under S.O. 12(3) is to be followed.
Similarly the provision of S.O. 11-A would not become redundant or inapplicable where the employer adopts the procedure laid down under S.O. 12(3) while terminating services of more than 50% workers.
13. Mr. Mohammad Humayoon has relied upon case of Naeemuddin v. The Sindh Labour Court No, IV, Nazimabad, Karachi and 2 others, reported in 1979 PLC 59, where the learned Single Judge of the Karachi High Court held that there was no bar to closure of a shift, section or department without permission of Labour Court. However, this decision also pertains to the cases prior to the amendment of the S.O. 11-A and furthermore in the instant case, the whole factory has been given away on contract and services of all the workmen have been terminated as pointed out above. Mr. Mohammad Humayoon has also relied upon the decision reported in 1980 PLC 1224, which deals with the question as to whether the retrenchment was genuine or mala fide. I have already held that this question is not material for the decision of this appeal. Mr. Mohammad Humayoon also relied upon a decision of this Tribunal in Appeal No, KAR-183 of 1988. That case related not to the termination of all the workers of the establishment but only to the termination of services of workers of certain section, which was given on contract. Obviously the case is distinguishable.
14. For the aforesaid reasons, I am of the opinion that termination of service of the present appellant, who remained the sole worker was in violation of the S.O. 11-A and, therefore, was not sustainable. I, accordingly allow this appeal and order the reinstatement in service of the appellant.
There is no evidence to show that during the pendency of the case, the appellant was sitting unemployed or was gainfully employed. I, therefore, award him 50% back benefits. The order to be implemented within one month.