DECISION ' These are 54 connected appeals arising from the judgment of Sindh Labour Court No, 3, Karachi, rejecting grievance petitions under section 25-A of the I.R.O., 1969, for reinstatement and back benefits.
2. The appellants were the employees of M/s. A & B Beverage (Pvt.) Ltd., the manufacturers of Seven-Up. This Company employed 146 persons out of which they retrenched 87 persons by orders in writing giving reasons. This was done for the purpose of closing down the factory and an application under Order 11-A of the W.P. Standing Orders Ordinance had already been made to the Labour Court for grant of permission in this behalf. The reasons for closure of the factory were that the factory was suffering huge losses due to rise in Excise Taxes etc. And it was not possible to carry on the business any longer. The Board of Directors of the appellant company in consultation with, their Chartered Accountants passed a Resolution, dated 18-2-1992 as, according to the advice of the Chartered Accountants and according to the report of the Auditor's, the company was an longer viable.
3. Notices were published in Dailies "Jang" and "Dawn" regarding termination of the services of the employees and actual letters of termination were issued and sent by registered post to 81 employees out of 146. One of such letter reads as under: "Dear Sir, ' As you may be aware, that .The company has suffered operating losses since the last more than 3 years and after the present/new shareholders/Directors took over in January 1992, they have been advised not to undertake any operations as it was no longer possible for the company to operate without incurring further losses.
' Therefore, it has been decided to liquidate/wind-up the company and some steps in this direction have already been taken.
' The company would also be applying shortly to the Labour Court for permission under S.O. 11-A, to close down the whole of its establishment.
' In view of the above, it is, regretted that your employment is no longer required and is accordingly hereby terminated with immediate effect i,e, the close of work on 27-2-1992.
' Please collect all your legal/termination dues, if any, alongwith one month salary/wages in lieu of notice of termination of employment on any day during office hours.
' Yours faithfully.
' For A & B BEVERAGES (PVT.) LTD.
(Sd.)
(GENERAL MANAGER.)"
4. The workers sent letters of protest on reading of the notices in the newspapers and filed their grievance petitions before the Labour Courts.
5. The Labour Court found that only 56 petitioners were workers while the rest, employed as Sales Manager etc., were not governed by the Standing Orders Ordinance, 1968. That the services of these 56 workers were terminated validly under Order 12(3) of the Standing Orders Ordinance. That these were 56 persons of the 'total strength. The application of the Company for permission to close down was also pending in the .Same Labour Court and it was granted. In proceedings of grievance petitions the Labour Court had admitted as evidence reports of two firms of Chartered Accountants also the report of Auditors that the decision to close down the factory was bona fide and unavoidable. The Labour Court, therefore, held that no mala fide could be inferred from the facts and circumstances of the case.
6. I have heard Mr. Khalilur Rehman, Representative for the appellants and Mt. Muhammad Hussain, Junior Advocate of the firm of Mr. A. Hafiz, Advocate, though he has shown his inability to argue the case his senior being away at Lahore.
7. Mr. Khalilur Rehman has first argued that the respondent-company could not retrench more than 50 per cent. Of their employees before obtaining the orders on their application under Order 11-A of . The Standing Orders Ordinance. That in this case they had terminated the services of 87 'out of 146 employees. It is, however, an admitted fact that termination of the services of the employees was in the process to close down the whole factory. It has been held by the Supreme Court in South British Insurance Employees' Union v. Sindh Labour Court 1975 SCMR page 49: "All that this Standing Order prescribes is that no employer shall close down the whole of its establishment without prior permission of the Labour Court. Thus, the Labour Court's permission might indeed be the last step in process of closing down or an application may be made by the employer simultaneously with any other step he may have to take to wind-up his business and close down his establishment. The Standing Order does not spell out any sequence in which the various steps closing down an establishment have to be taken by an employer. Permission to close down upheld."
' It is not, therefore, a condition precedent to wait for Court's Orders before starting the termination of the employees as argued by Mr. Khalilur Rehman. It was openly stated in the notices in the newspapers and the letters sent to the workers that the company had decided to close down the whole of its establishment for which an application under Standing Order 11-A had been filed in the Labour Court.
8. It has next been argued that the respondent-company were not suffering any losses and they had been paying bonus and workers' participation fund _regularly to their employees until the retrenchment, which was rather sudden. That, in fact, the A & B Beverages. Had sold their concern to Pakistan Beverages Company, the Pepsi manufacturers, for a consideration of Rupees one crore and thirty-five lacs and, therefore, these steps were taken. However, whatever may be the reasons, they were closing down the establishment and they could not be prevented from doing so because they wanted to sell their factory to another company. They were not bound to effect the sale of their company along with the workers. It was open to the workers to approach the new Company for employment, if they so choose, on any terms and conditions agreeable to them and the new Company. For this reason the learned representative, Mr. Khalilur Rehman cannot charge the respondent-company with mala fides. The burden to prove mala fides lies heavily on the workers but in this case there is neither any proof nor any such allegations apparent on the face of the proceedings that the company had terminated the services of the employees on account of their union activities.
9. I, therefore, agree with the view taken by the lower Court that the termination was bona fide and legal. The, order of the lower Court is, accordingly, maintained and all the appeals are dismissed.