' The Management of Machine Tools Manufacturing Factory, Multan Road, Lahore,-vide order dated the 1st April 1975 terminated the services of 86 workers employed in its Ammunition Box Section with effect from 2nd April 1975 on the plea that Pakistan Ordnance Factory, the sole buyer of ammunition containers had not placed any formal fresh order for the purchase of the said containers and there did not seem to be any such intention on the part of the buyer and that the Management had received the telegraphic message dated the 28th March 1975 from the P.
0. F. That they would not accept any ammunition boxes without entering into fresh contract. It was further indicated in the termination order by the management that it had become impossible for them to carry on with the present strength of workers employed in the Ammunition Box Section and they are compelled for having recourse to retrenchment.
2. Machine Tools Labour Union, C. B. A., in the establishment of Machine Tools Manufacturing Factory feeling aggrieved of the retrenchment and termination of workers at such a large scale protested to the Labour Welfare Department.
3. Mr. M. A. H. Beg, Assistant Director, Labour Welfare (Conciliation) Lahore, hereinafter referred to as the Reporting Officer, enquired into the matter personally as well as through his Labour Officer and ultimately on 14th January 1974 he made a report to this Court under section 46-A of the Industrial Relations Ordinance, 1969 for lifting of the alleged illegal lock-out.
4. A notice was duly served on the management as well as on the workers' Union through the Reporting Officer.
5. The Management resisted the report on the ground that their action was termination simplicitor of workmen employed in the Ammunition Box Section and the same did not amount to lockout much less illegal lockout. According to the Management, the Reporting Officer did not conduct any enquiry in the matter himself. The retenched workers if felt aggrieved could seek redress before the Junior Labour Court, under section 25-A of the Industrial Labour Court.
6. Machine Tools Labour Union contended that the Union had raised Industrial Dispute on 19th September 1974 and after a protracted concliation proceedings a settlement was arrived at on 5th March 1975. Soon after the conclusion of the settlement the Management in the first instance terminated 21 workers and then locked out 86 workers under the false pretext that amunition containers were not likely to be sold. It has also been alleged by the Union that the Workers' Union had instituted cases against the management which were still pending in Court and the Union was being pressed to withdraw those cases.
7. Mr. Barkat Ali, General Secretary of the Machine Tools Labour Union appeared before this Court on behalf of the Union while Mr. Muhammad Naeem Dar, Managing Partner of Machine Tools Manufacturing Factory testified on behalf of the Management of the employer. Mr. M. A. H. Beg the Reporting Officer was examined as Court witness and subjected to cross-examination by the counsel for the workers and the counsel for the Management.
8. The Reporting Officer stated that Machine Tools Manufacturing Co., employed 140 workmen. The last settlement executed between the Union and the Management was signed on 5th March 1975 whereby certain demands of workers were accepted. On 2nd April 1975 this officer received complaint from the Union that the Management had issued orders on 1st April 1975 terminating the service of 86 workers. The workers complained that they had been victimized for the Trade Union activities and on account of the execution of the settlement. Management took the plea that they had resorted to the retrenchment in implementation of their general scheme of the retrenchment.
This officer carried out further probe in the matter. He came to the conclusion that the items being manufactured in the factory were in sufficient demand in the market and the Management with little effort could dispose of its manufactured goods and there was no genunine urgency for having recourse to the retrenchment. In his view the so-called retrenchment of a large number of workers in fact amounted to illegal lock out. He also disclosed that the Management demanded from the Union for the withdrawal of the application relating to the appointment of chartered accountant to which the Union did not agree. He admitted that he did not visit the factory personally in connection with the complaint of the Union but made enquiry from the Management on the telephone. The enquiry on the spot was conducted by his Labour Officer.
9. Barkat Ali the General Secretary of the Workers' Union stated that in October, 1974 the Union served a strike notice on the Management in connection with the demands already communicated to the Management. The consequential cociliation proceeding remained pending for about 4/5 months. During the pendency of the conciliation proceeding the Management laid off 21 workers without obtaining ammunition for the Labour Court. The General Secretary ultimately under section 60 of the Industrial Relations Ordinance before the Labour Court filed application. A settlement was executed between the parties on 5th March 1975. According to the settlement the Management terminated the laid off 21 workers on 10th March 1975. Union approached them to withdraw illegal order of terminated workers. The Management told the Union that besides 21 workers other workers could also be turned out if the complaint was not withdrawn and other cases filed by the Management in the Court were not taken back. The Union had also applied for the appointment of the chartered accountant. The Management exercised pressure on the Union to withdraw that application. The Management ultimately terminated 56 workers. They had long service to their credit as compared to those who have been retained. Out of 141 workers only 30 or 31 have been retained. All the office-bearers and the members of the Union have been terminated except one Foreman who was the Vice-President of the Union. The General Secretary of the Union further stated that the ammunition boxes manufactured in the factory were not rejected by the buyer and it was just by way of excuse to allege that no future contract was being executed by the Defence Department.
10. Mr. Muhammad Naeem Dar, Managing Partner of Machine Tools Manufacturing stated that they had received an order from the P.
0. F. For 2000 ammunition boxes. That order has already been complied with. The Management had verbal assurance of further order therefore they manufactured another 14000 ammunition boxes which were lying in the factory. They sent Telegrams Exh. R. 2 to Exh. R. 5 asking P.
0. F. To place further order. On 28th March 1975 the Management had received a telegram from the P.
0. F. That ammunition boxes without contract were not acceptable. The telegram is Exh. R.
14. It reads :-"Production of H. 10/P boxes without contract not repeat not acceptable". Mr. Dar further stated that after the receipt of telegram the Management had to retrench 86 workers by the order, dated the Ist April 1975.
11. The point for determination is as to whether the action of the Management where 86 workers have been terminated as an alleged measure of retrenchment amounts to lockout and if so whether the same is an illegal lockout. Expression "lockout" has been defined in section 2(xvi) of the Industrial Relations Ordinance. This definition suggests that refusal by the employer absolute or conditional to continue to employ any number of workmen employed by him such refusal occurs or is intended for the purpose of compelling workmen employed to accept certain terms and conditions of or affecting employment.
12. In the circumstances of the under consideration case, it has been stated by the Reporting Officer as well as by the General Secretary of the Workers' Union that soon after execution of the settlement the Management resorted to the termination of large number of workers. The Management pressurized the union to withdraw the complaint and cases filed against the Management before the Court and to withdraw the application filed by the Union for the appointment of chartered accountant. The Union did not yield to the pressure, and the Management has terminated the large number of workers. The plea of the Management on the other hand is that the P.
0. F. Was a sole buyer of the ammunition boxes being manufactured by the company in its Ammunition Box Section. The said buyer was not prepared to buy any more ammunition boxes from the company. The previous order of the P.
0. F. In respect of 20000 ammunition boxes has already been executed. The main-stay of the Management of the Machine Tools Manufacturing Co., to justify the so-called retrenchment of 86 workers is Exh. R-14. The contents of this telegram which have already been reproduced above simply suggest that the P.
0. F. Was not prepared to purchase boxes without contract. This telegram does not in any manner indicate that the P.
0. F. Was not prepared to execute the contract and to place further order of purchase of ammunition boxes on the Machine Tools Manufacturing Company.
13. In the light of the parties evidence we find that the action of the Management of terminating the services of 86 workers is not based on bona fide and in implementation of their general scheme of retrenchment. It appears that on account of the pendency of a complaint and other cases filed by the Union against the Management before the Labour Court, the execution of the settlement and the refusal of the Union to withdraw the application for the appointment of chartered accountant has led the Management to take this retaliatory action. Such an action amounts to lockout. Such lockout having been commenced otherwise than in accordance with the provisions of Industrial Relations Ordinance, 1969 is positively an illegal lock-out.
14. In the light of what has been said above, the management of Machine Tools Manufacturing Company is directed to lift the illegal lockout immediately and to re-instate the illegally locked-out workers by its order, dated 1st April 1975 with back benefits.