DECISION ' The respondents Mercurry Garments had retrenched most of their permanent workers because of the lack of orders from abroad. They mostly depended on the demand from U.S.S.R. But after dissolution of the Soviet Union these orders ceased. The respondent-factory accordingly decided to ultimately close down the garment factory and in the first instance they retrenched 165 workers who filed their grievance petitions under section 25-A of the I.R.O. Before the Labour Court. Most of these grievance petitions were dismissed for default. Some applications were separated from the whole lot and 88 applications remained for decision. Out of these 65 workers have appealed. The facts of these appeals and the law involved being identical they will be disposed of by this order.
2. The main objection raised against the retrenchment of workers is that Order 11-A of the Standing Orders Ordinance, 1968 has been violated since more than 50% of the workmen have been retrenched without prior permission of the Labour Court. It has, however, been stated in evidence that the application under Order 11-A having been made to the Labour Courts is pending for orders.
Meanwhile steps are being taken to close down the major part of the factory. There can be no objection to such procedure being adopted by the management as held in the case of South British Insurance Employees' Union v. Sindh Labour Court 1975 SCM R 49. Order 11-A of the Standing Orders Ordinance mentions that before the factory is ultimately closed down, the permission of the Labour Court should be obtained in this behalf. Thus the Labour Court's permission might indeed be the last step in process of closing down and if an application has been made under Order 11-A but has not yet been decided, it is sufficient compliance with Order 11-A of the Standing Orders Ordinance.
3. Even otherwise for the purpose of re-organisation, employment of workers can be terminated under Order 12 of the Standing Orders Ordinance on payment of one month's wages in lieu of notice and other dues.
4. In case mala fides are imputed to the management for retrenchment of such huge number of workers, the burden strictly lies on the workers to prove such mala fides. In this case this has not been established.
5. It has been argued that part of the factory is closed down because the management can get such garments made through the contractors at much lower costs than the cost incurred by them in manufacturing the garments themselves. That the orders from Russia have not ceased but they continued. It is only the economy involved in the transaction, that the old workers have been retrenched. However, even if that is the case it is the right of the management to effect economy in their business by re-organisation and such act cannot be termed to be mala fide. It has, therefore, been rightly held by the Labour Court that the retrenchment of the appellants was neither mala fide nor B illegal.
6. The order of the Labour Court is accordingly maintained and these 65 appeals are dismissed in limine.