P L D 1959 Supreme Court (Pak (PLP)

The point raised on the foundation of Article 12 of the Constitution of 1956 has not been pressed, and may be briefly decided by saying that the Industrial Disputes Act, 1947 does not in any way interfere with the conduct of "any lawful trade or business". Its provisions are addressed not to the conduct of trade or business, but to the maintenance of peaceful and equitable relations between employers and their workmen, and is indeed a condition applicable to the lawfulness of "trade or business" where any operation thereto is conducted through employees, within the context of the Act. The appellant company challenges the correctness of the award made by the Industrial Tribunal directing: (1) reinstatement of 120 daily rated women workers who had been employed in the Re-drying Plant, and were held to have been "locked‑out" on the 8th June 1957; and (2) the reinstatement of 6 male monthly paid employees, who were dismissed without notice with effect from the 10th June 1957. In both cases, the Tribunal has found that the dismissal of these workers was the result of formation of a union among the workers of the company. The first steps to this end were taken by the workers on the 10th May 1957, when a meeting was held. Follow ing upon this, an application for registration of the union was made to the proper authority on the 2nd June 1957, of which the company was duly informed. On the 6th June 1957, 100 women workers were said to have joined the union, and two days later the company is said to have declared a "lock‑out" against all women workers. The work‑people moved the Labour Commis sioner in the matter on the 10th June 1957, and on the same date the six male workers mentioned above were given notices of termi nation of their services. On the following day, the company closed the factory, thin locking‑out all the workers who alleged that they immediately went to the Labour Commissioner for redress. Nego tiations followed and in a period of about four months, despite several orders by the Government to open the factory, and even a number of notices issued by the company itself calling upon the workers to return to duty, the factory was allegedly closed to the dissident workers. The reference to an Industrial Tribunal was made on the 12th October 1957, when an order was also made prohibiting the lock‑out or strike. The work‑people alleged that despite this order, they were not admitted to the factory, but from statements made at the Bar in the course of the hearing, it would appear that operations at the factory were not closed, and that in all probability, the company had engaged other workers to con tinue its operations. Indeed, it was admitted before us that a large number of the women‑workers who were allegedly locked‑out on the 8th June 1957, were later accepted for employment in the factory. Mr. Fazal ur Rehman accepted before us the correctness of the finding of the Tribunal that "the company was responsible for the closure without notice on the 11th June 1957" and from this it follows that the lock‑out was illegal vide section 22 of the Indus trial Disputes Act, 1947, read with the definition of a "public utility service" in section 2 (n) of the same Act and in particular, category (viii‑B) which includes factories engaged in the manufacture of goods or commodities specified in the schedule to the Development of Industries (Federal Control) Act, 1948. Item No. 27 in the said schedule is "tobacco". Mr. Fazal ur Rehman was also pre pared to accept the findings of the Tribunal that the termination of service of the 120 women on the 8th June 1957, and of the six male‑workers on the 10th June were unjustified. The attack by Mr. Fazal ur Rehman was directed against the consequential award of relief in each of these cases. The award of the Tribunal was announced on the 12th January 1958, and was to the effect that all the 126 workers, including the six men, "shall be reinstated with effect from the date of their discharge, and the company must pay their wages from that date until such time they are allowed to resume their duties". With respect to the women‑workers, it was strongly urged that by this order, the Industrial Tribunal had improved the terms of their employment out of all recognition. Being merely daily rated, and employed on work of a seasonal nature, their employment should be regarded as casual, and, therefore, terminable without notice. At the most the compensation which they could claim in law for dismissal without notice might be a week's wages, since they were issued with cards for a week at a time, and were paid by the week. The award of the Tribunal, however, had prolonged their employment from the 8th June 1957 until such time as the award "is put into operation". (The operation of the award was suspended when special leave to appeal was granted by this Court on the 28th March 1958). These women workers were employed in the Re-drying Plant, where in the words of Mr. M. Jalal, a Director of the company "stems are removed from the tobacco, leaves are cleaned and then sent to the machine for re-drying on a specific temperature". Tobacco being the leaf of a plant which is cultivated in its proper season, is a seasonal product, and if it be correct that the drying of the leaf follows fairly soon after the removal of the leaf from the plant, in order to ensure uniformity and due standardization for large scale production, the process of drying has to be commenced at an early stage after the removal of the leaf from the plant. The inference must follows that the duration of the entire process is limited in point of time. A more satisfactory conclusion on this point might have been achieved if proper attention had been paid by the Tribunal to the plea taken on behalf of the company at an early stage, that the work upon which the 120 women‑workers were employed was of a seasonal nature. On the basis of facts which are within common knowledge it is possible however to conclude with a fair degree of certainty that the work in question is not one which can be carried on the whole year round unless continuous supplies of fresh leaves are available throughout the year, an assumption which we do not think can possibly be made with reference to a seasonal crop such as tobacco. Therefore, we consider that the argument of Mr. Fazal ur Rehman to the effect that the Tribunal has enormously improved the terms of the employment of the women‑workers it) granting them relief cannot be resisted. At the most, and subject to possible earlier termination of employment these women might have expected to retain their employment to the close of the current re-drying season. As to the duration of this `season' we were unable to gain any clear impression from the submissions made at the Bar. The Tribunal declined to accept the contention of the company that when the women‑workers were dismissed, the stock of leaves in their possession had been exhausted, because when asked to produce the stock register, the company refused, pleading firstly that it was not necessary for the disposal of the case, and secondly that it contained information in the nature of trade secrets which they were not prepared to disclose. These reasons were treated as mere pretexts by the Tribunal, but in our opinion this is not the only conclusion which can be drawn on the point. The contents of the stock register of a tobacco company may contain information of tile utmost importance for the successful operations of that trade. Thus, the proportions in which different tobaccos go into certain products are matters within the private Knowledge of the company only and their dis closure to the public might easily have a very highly adverse effect upon the successful marketing of those products. Therefore, we do not consider that the mere non‑production of the stock registe r as in itself a sufficient ground for concluding that the company was in possession of a stock of tobacco leaves with which to con tinue operation of the re-drying plant, and we are clearly of the opinion that to maintain the award of the Tribunal in regard to these women‑workers will be an act of gross inequity. Certainly in the case of these women‑workers who were admittedly re employed in the same factory, in the interval which has elapsed since the 11th June 1957, the award provides for a totally un deserved double payment. Bearing these circumstances in mind, and taking what we regard as the most sympathetic possible attitude towards these employees. We are of the opinion that they cannot be allowed any more relief than would have been open to them had their services been terminated without cause shown.) On that basis, we consider that the appropriate compensation in their case will be the payment of a week's wages. The orders of dismissal of the six male‑workers were in writing. No cause for termination of their services was mentioned. They were informed that they had been dismissed with effect from the 10th June 1957, and that they could collect their wages due up to the 10th June 1957, on the following day. Mr. M. Jalal, a Director, stated that the company had "simultaneously issued instructions (to the Pay office) according the procedure of termin ation of services that they will have to be paid one month's salary in lieu of the notice period". The workers those not to receive their wages from the Pay office, and the statement is unsupported by other evidence. It contains, however, an admission of the right of the workers in question to receive from the company, at a minimum, the wages which they had earned up to the 10th June 1957, plus a month's wages in lieu of notice, since their dismissal was peremptory and without cause shown. The finding of the Tribunal is expressed as under:‑ "these six office‑bearers were dispensed with on 10th June 1957, because of their union activity". Details regarding the office‑bearers of the Union were furnished by one of the dismissed workers, Abdul Ghaffar Ansari. He named twelve office‑bearers, including himself as secretary and three of the other dismissed workmen, namely Afzal (Propaganda Secretary) Nazir‑ul‑Hasan (Treasurer) and Dilawar Ali Shah (member of Managing Committee). There is no clear evidence to show that the two remaining dismissed workmen, namely Ghulam Ahmad and Mustafa Hussain, were office‑bearers, or what officers they held. However that may be, it seems clear that a number of workmen who were stated by Abdul Ghaffar Ansari to be office‑bearers, were not dismissed. The award of the Tribunal makes no mention of this circumstance. It proceeds on the basis that because some workers in the same categories as these six dismissed workmen were retained in service after the 10th June 1957, therefore their selection for retrenchment cannot have been because they were surplus to requirements, and must be because of their Union activity. The inference might have been accepted if all the office‑bearers had been retrenched but that is not the case, and it is therefore necessary to consider whether there might not have been bona fide grounds for the company to dispense with the services of these six persons. Now the case for the company was that their factory had been newly set up, and by the material date, installation of the plant and the work of bringing it into running operation had been completed, and consequently some part of the large staff employed on these works became surplus to requirements and had to be retrenched. The dismissal of these six workers was thus explained. The workers' Union in its statement of claim before the Tribunal, expressly admitted that the erection of the machines etc. was completed by the end of 1956; that for about two month's experimental production was carried on; that the Re-drying plant went into operation in March 1957, and thereafter full working of other sections of the factory was commenced. These facts clearly indicate that there was a change of circumstances about the relevant time, justifying reduction in the staff previously employed, when construction of the factory, installation of the machines, and the running in processes were in progress. An admission by one of these workers, Dilawar Ali Shah, regarding the working of the company at the relevant time, also furnishes an indication that the plea of bona‑fide retrenchment raised by the company, may not be unfounded in fact. This man was employed as Store‑keeper, and stated that he was in charge of all the godowns (except the tobacco godown) as well as of all articles "in the area compound of the factory". The godowns in hA charge contained "cigarette paper, articles of packing etc". He went on to say:‑ "All materials of the Company were mortgaged with the Bank but were shown in the Company's stock‑register. All godowns had Bank locks on them and Bank Chowkidar stayed there. It remained with the Bank till I was discharged, but the Company used to draw articles on payment to Bank and the entries in the Company's register will show it." Mr. M. Jalal, a Director of the Company, who has been mentioned before, confirmed these facts expressly, and went on to say:‑ "Before June 1957, I got raw material released in March worth about Rs. 70,000 for test production of the cigarettes, I again got released in September 1957. Mr. S. D. Shah (Dilawar Ali Shah) was appointed temporarily as store‑keeper on the basis that we will be producing cigarettes in June 1957, but as production did not start till then, my Company re- examined the situation and as it was ascertained that it will take months to produce, the Company considered certain staff including Mr. Shah and other five as surplus. The other five were employed for installation purpose." The Tribunal has not considered this aspect of the case at all, namely, that the financial circumstances of the company, and the progress of its operations, were such that to reduce overhead expenses, including salaries of staff, was an imperative necessity, and consequently, the conditions justified retrenchment of staff, at least until such time as the factory could attain satisfactory continuity of production, by gaining freedom from the Bank's encumbrance. Retrenchment always involves selection, and in the present case, it is not possible on the facts, to sustain the Tribunal's conclusion that such selection was based solely upon the occupation of offices in the newly‑established Union. On these premises, the conclusion as regards the dismissal of these male‑workers, must be placed on the same basis as that reached above regarding the 120 women‑workers namely, that the relief admissible to them cannot be any greater than that which they could claim had their services been terminated without cause shown. This claim amounts, in the case of each man, to his wages due up to the 10th June 1957, plus a month's wages at the same rate, in lieu of notice, as admissible under the general law of master and servant and admitted on behalf of the company. We note in conclusion that the termination of service in all the cases in question was antecedent to the "illegal lock‑out" which has been found. This circumstance has rendered it possible to deal with the rights arising out of such termination irrespective of the lock‑out. We accordingly allow this appeal, and direct that the award of the Tribunal should be varied in such wise that the reliefs allowed to the workers should be limited as under:‑ (1) The relief to be paid to the 120 women‑workers who were dismissed on the 8th June 1957, shall be the payment to each one of them of one week's wages at the daily rate which each of them was drawing at the time; and (2) the relief to the six male‑workers shall be limited to the payment to each one of them of one month's wages at the rate payable to him at the time of his dismissal on the 10th June 1957, in addition to earned wages which had remained unpaid. We leave the parties to bear their own costs. A. H. Appeal allowed.