DECISION ' This Revision Petition is filed against the order, dated 14th April, 2000 passed by Labour Court No,3, Karachi, in the circumstances briefly stated as follows. The applicant company which is known as Reckitt & Colman of Pakistan Limited has been running a factory for manufacture of Ethical Pharmaceutical Products for over 40 years. However, since recently it has suffered financial losses in succession so much so that it has been made difficult for the company even to make arrangements/changes as required by law (Drugs Act, 1976). Seeing no other alternative, the company decided to close down the factory. In keeping with that decision, not only it started terminating the services of all the 117 workmen working in the factory but also it made application to the Labour Court for necessary permission for permanent closure of the concern under Standing Order 11-A of the Standing Orders Ordinance, 1968.
2.. Pending the disposal of the aforesaid application the company entered into an agreement with the CBA whereby the basic salary of terminated workers was increased by Rs,500 and Rent Allowance by Rs,200 retrospectively with effect from 1st January, 2000. Additionally the company also decided to pay then gratuity in accordance with formula mentioned in the agreement, undertaking further to pay ex gratia in lieu of bonus for the year 1999 and other redundancy benefits. In pursuance of that agreement 96 out of 117 workers, constituting more than 82 of the total strength of workers, availed the benefits and got their dues cleared and they submitted individual resignations with prayer that their termination be converted into acceptance of resignations. As per said agreement the CBA and management also submitted a joint consent application in the Labour Court for permission to close down the factory in terms of the agreement.
However, the said application did not find favour with the Labour Court which by its order, dated 14th April, 2000 dismissed the same as mentioned above, it was this order which has been challenged in the present Revision Petition.
3. Mr. Mehmood A. Ghani appeared for the appellant's company. Mr. Nishat Warsi represented the previous set-up of the CBA, Ch. Muhammad Ashraf Khan was present on behalf of the new set-up of the CBA and Mr. M.A.K. Azmati attended the bearing for Intervenors i,e, remaining 22 workers who had not availed the benefits given by the company. All these learned counsel submitted their arguments. Elaborating their view-point. I have perused the impugned order very carefully and also the relevant documents available on record.
4. It appears from the judgment of the learned Labour Court that it has heavily relied upon the judgment of Sindh High Court in C.P. No,S-3 of 1995, dated 30-5-1999. The learned Judge has quoted extensively from the said judgment. The perusal of the observations made by the High Court in the said judgment has made it clear that for purpose of giving permission under Standing Order 11-A, the Labour Court has been invested with discretion which it has to exercise justly, fairly and honestly and not arbitrarily or capriciously. While exercising such discretion, the Court has to make sure that closure of the establishment was sought not with bad motive or mala fide intention.
Keeping these guidelines in view the learned Labour Court has observed that unless the parties concerned are provided opportunity to lead evidence in support of their respective stands, it was difficult to appreciate that the application made for permission for closure of the establishment was free from ill-will or such other considerations. However, the argument of the learned counsel of the management was that since the overwhelming majority of the workers i,e, 32 of the total 117 workers had joined hands with the CBA in executing the agreement, the apprehension for the agreement being the result of mala fide intention etc., was almost nill. As regards the workers who had not availed the benefits of the agreement and had, instead, choosen to approach the Labour Court with prayer that they should be joined as party to the proceedings pending before the Labour Court for the permission to close down the factory of the applicant's company, he vehemently argued that they had no locus standi, and they had no vested right. In support of his argument, he made reference to the case decided by Single Bench of Sindh High Court (Mamoon Kazi, J.) vide 1986 PLC 1052. I am inclined to agree with the views expressed by the learned Single Judge of the High Court, which are reproduced as under:- "I have already pointed out, the purpose of inquiry before the Labour Court appears to be only to determine whether the employer has bona fide resumed to close down the establishment or terminate the services of more than fifty per cent. Of the workmen employed by him. There is, therefore, no vested right of the petitioner which was likely to be affected by the proceedings pending before the Labour Court. Ordinarily, the employer should be at liberty to close down his establishment and terminate the services of his workmen if the exigencies so require. However, it appears that the Legislature has imposed certain restrictions on the right of the employer to take such action, making prior permission of the Labour Court necessary in this respect. It is noteworthy that Standing Order 11-A does not provide for giving of notice to the individual workmen concerned or even the CBA, therefore, the object behind joining the CBA as party to the proceedings before the Labour Court appears to be to enable the Labour Court to ascertain true facts so that nothing is concealed therefrom and not that it may espouse the cause of individual workers."
5. In course of arguments it was brought to my notice that the set-up of CBA which executed agreement with the management had been changed during the controversial period and new set- up had taken over. This information was confirmed by the Letter No,RTU/ND/90/2000-842, dated 18-5-2000 addressed to the General Secretary of the Employees' Union by Assistant Director Labour (Trade Unions). By the said letter the new set-up of office-bearers whose names are mentioned in the letter was approved. The question arose what could be the effect of such charge on the pending litigation of the parties? In normal course the agreement executed by the previous set-up of CBA, with the management should be binding on its successor set-up, unless it was proved that the agreement was somehow vitiated due to one or the other reasons. But this could be thrashed out only in Labour Court. So far as this Tribunal was concerned, it could not overlook or ignore that statement made by Ch. Muhammad Ashraf, the learned counsel for the new set-up of C.B.A. In open Court. He made no secret in stating that new set-up of C.B.A. Was no longer party to the joint/consent application made by the management and the previous set-up of C.B.A. For grant of permission for permanent closure of the establishment in terms of the agreement executed between them. What could be the implication of such statement? Whether the new set-up of the CBA could dissociate from the joint application which was obviously filed in accordance with the agreement. May be the new set-up had reservations about the agreement. They may or may not be able to prove their apprehension about the agreement, Yet their very statement of withdrawal from the joint application was enough to change the complexion of the revision petition. With separation of one important party i,e, CBA, the revision petition neither remained joint nor of consent. I am of the view that permission application would have now to be decided on its merits. It was rightly pointed out by the learned Single Judge in the above reported case that "the object behind joining the CBA as party to the proceedings before the Labour Court appears to be to enable the Labour 'Court to ascertain true facts so that nothing is concealed therefrom---." The new set-up of the CBA, therefore, remained as a party to the proceedings relating to permission application and the learned Judge would to take decision on the application after providing opportunity of adducing evidence etc., to the parties to the proceedings.
6. It is provided in Standing Order 11-A that management could proceed to terminate the services of 50% of the workers or permanently close down the establishment only after obtaining prior permission from the Labour Court. But in the present case despite the above expressed provision, the management went ahead by terminating the services of all the 117 workers without such permission, the application for which was admittedly filed after termination orders were issued.
According to the learned counsel for the company after acceptance of resignations of 82% of workers they ceased to be the employees of the management and only 22 workers were left in the field'. As such it was not necessary to wait for permission for termination of services of the remaining set of 22 workers. His contention does not appear to be correct. The application for permission was for permanent closure of the establishment and not for termination of the services of the workers as such the number of workers at the time of closure of the establishment was not material. It is, however, true that after acceptance of resignation of 82% of workers the illegality of termination of their services, if any had disappeared. Moreover, the remaining workers had remedy against their termination by way of filing individual grievance petitions.
7. The upshot of the above discussion is that the new set-up of CBA having withdrawn from the joint application, the said application no longer remained consent application, as such the original application filed for permission under Standing Order 11-A and pending in the Labour Court had got to be disposed on merits.
' Consequently partly allowing the revision petition, the impugned order is set aside and the case is remanded back to the Labour Court with direction that the application for permission for permanent closure of the establishment be decided on merits and while doing so the agreement executed between the management and previous set-up of CBA may be taken into consideration provided that agreement is found to be free from any taint of defect. The revision petition is decided accordingly.