1971 PLC 70 (PLP)

The second party filed a written statement in which they stated that -retrenchment order was passed on 11-6-70 .and it took effect from - the zero hour of .12-6-70. But the Court passed an order for maintenance of status quo on 12th June 1970 which was received at 6-20 p. m: It was further stated that 39 out of' 43 retrenched workers collected their legal dues comprising the retrenchment benefits granting due receipts. It was further stated that the application under section 34 of the Ordinance is not maintainable as there are 2 registered Trade Unions in the Company in the names and style of K. D. H. Sramik Union and K. D. H. Employees' and Workers' Union, and that none of the Unions has so far ascertained their position as collective bargaining agent. The K. D. H. Sramik Union as such, has no locus standi to raise any dispute. The constitution of the Union is contrary to the provisions of section 7(d) of the I. R. O. As the dispute has not been raised properly, it shall be deemed under section 43 of the I. R. O. that there is no industrial dispute on this score. It was further stated that the allegations that the workers were victimised and that the: retrenchment was ordered as a measure of punishment was totally-false. The question of obtaining prior permission of the Court did not arise as it was a pure and simple retrenchment on economic ground. The comparative statement of production, sale, huge, accu mulation of finished goods, rejection of the products of the Company by the Provincial Government and withholding pf bills amounting to Rs. 2,54,323.25 by the Central Medical Stores, Dacca, as shown in Exhs. A, B and C will substantiate the downfall in company's financial position and recurring loss to the business which compelled the Company to minimise Ties the cost by retrenchment of 43 workers in a manner as provided in section 12 of the Standing Orders Act, 1965. This was only a process to a liquidation of the, firm as it has become uneconomic. In the facts and circumstances of the case no permission from the Court was required as there was no infringement of the provision of section 34 or 47 of the Industrial Relations Ordinance, 1969. Points, for determination in the present case are (1) Whether the order of retrenchment passed by the second party in respect of the 43 workers is valid and tenable in the eye of law? (2) What relief, if any, is the first party entitled to?, FINDING AND DECISION. Points 1 and 2-Both the points are taken up together for discussion for the sake of convenience. The first party has pleaded in' this case that as many as 43 workers out of 55 workers have been retrenched during the pendency of I. R. Case No. 154 of 1970 in this Court. The first party claims that under suction 47 of the I. R. O. the second party was not entitled to take this measure of retrench ment which, according to them, is punishment without the permission of the Court. As against this the second party has pleaded that dismissal, discharge, lay off of workers, termination of services of workers arid retrenchment have been defined in the East Pakistan Employment of Labour (Standing Orders) Act, 1965, and there is a separate connotation for retrenchment and it does not in any way fall in the category of discharge, dismissal or punishment otherwise. It has also been pleaded that the conditions of service are not changed by retrenchment. The sum and substance of the' argument of the second party is that retrenchment is no punishment; and therefore, no permission from the Court is required in respect of retrenchment of workers during the pendency of any proceeding in the Court. It has further, been pleaded that in the present case that out of 43 workers 39 workers have already taken the retrench ment benefits according to law and the rest 4 workers can take the same at any time from the 'office of .the second party. As retrenchment, benefits have been accepted by the workers there is no case from their side which could be maintainable in the eye of law. It has then been argued that in the present case the retrenchment has been made solely on the economic ground or redundancy of workers. The second party's firm is a result of private enterprise, and, the private enterprise cannot be forced to continue the operation of any business if it does not find the economic circumstances congenial to its working efficiently and smoothly. The second. party has produced papers to show ;hat due to stoppage of work on account of strike, etc., the value of goods sold as well as the production has fallen progressively during the period from November 1969 to May 1970. A large amount of goods has remained unsold in the stock as has been shown in Exh. C it has further been submitted vide Exh. D, that Government of East Pakistan has declared some of the products of the second party factory as below standard and the stock in respect of them have been rendered unsalable. The second party, as such, is not in a position to sell these goods in the market and is facing a loss on this account too. ' It has further been shown that an amount of Rs. 2,54 323.25 is the amount of pending bills lying with the Central Medical Stores. Out of this amount, for 4 items of medicine the value of which comes to Rs. 1,45,798.00 have been declared below standard and the Government had withheld payment of this amount and the Company had made an appeal for a decision by the Government, but the decision has not been received as yet. In view of the progressive deterioration in the production and the value of the goods as received from the markets including the Government Stores and others, the Company is, facing a collapse finan cially and does not find it worthwhile to continue the operation of the factory in the present form. It has, therefore, been found expedient by the. Company to close the business temporarily and with that and in view they have retrenched 43 workers as a preliminary step to close down the business. As they have to collect their money and to close the operation, etc., take stock of their existing products, they have kept some clerical staff and a few workers and they would also be retrenched in due course. As against these submissions of the second party, the first party has pleaded that the present financial rebaffile of the second party is a temporary phase and that this was the result of strike, loss of business on account of sub-standard products which have been refused acceptance by the Government and the market as a whole for which the Company is responsible. It has further been stated that the profit and loss of the Company in the previous years would show that the Company had earned profit for a long time and, therefore, it is not uneconomic to continue the business. It has, therefore, been pleaded that this present retrenchment is discharged or dismissal or termination of the services of workers in the cloak of retrenchment and that the intention of the Management is to punish the workers who resorted to strike in such . a manner. Now it appears that this is a private enterprise an whatever might be the reasons, economic or otherwise or say, even mental for which a private enterprise thinks inopportune to continue the operation of business, he would be at liberty to close down his own shop or business and cannot, therefore, be forced to keep it running in spite of the odds best known to him. This would be against the theory of private enterprise and individual liberty. In the present case, the second party has given the figures as stated above in support of his contention that his business-has become uneconomic and he has been obliged to close down his business as a preliminary step of which lie has been forced to retrench some workers. ' According to our prevalent law (Standing Orders Act, 1965) a private enterprise is entitled to retrench workers by giving them the retrenchment benefits as per law. There is a further rule of retrenchment that is, `last come first 'go' and that if the business prospects brightens again and re-employment starts within a year, the Company must offer the employment first to the retrenched workers. It is also admitted that by closing the operation of a factory or industry or business, the Management also loses its prospects of profits and it cannot, therefore, be said that it 3 is an unilateral step of punishment only for the workers. There is no employer who would close down his business when there is prospect of profit when he has already started a business. It has not been challenged by the first party that the figures as given by the second party in respect of its unsold items and its value and the sub-standard goods which have been refused etc., are incorrect. Therefore, the contention of the second party in respect of these figures and the statement that their payment has been with held by the Central, Medical Stores has to be upheld. We, therefore, come to the finding that the second party found its business uneconomic and none profitable and, therefore, it has to close down its business iii preparation of which it has to retrench the workers in the normal fashion. As the circumstances indicate that this is an econo mic measure which the second party, of necessity, had to take and when we find that most of the workers have already accepted their retrenchment benefits, I do not find that there is any element of punishment in this measure of retrenchment, and, therefore, it cannot be said that there has been violation of the provisions of section 47 of the I. R. O. In view of this no relief can be given to the first party Union. This application is a misconceived one and, therefore, not entertainable in the eye of law. In the result, this application is dismissed on contest but without costs. While giving this decision I have taken into consideration the written opinion of both the members who have differed with each other in their such opinion.