1987 PLP 403 (PLC)

This is an application under section 25‑A (10) of I.R.O. 1969 filed by the applicants jointly against the respondents for re‑instatement with back benefits.

2. The case of the applicants is that they were employed with Messrs Allied Synthetic Mills, B‑19‑C/3, S.I.T.E. Manghopir Road, Karachi and the length of the service and the designation of each worker is shown below:‑ S. No. Name Designation Length of service S. No. Name (1) A. Razzaque Khan Lodhi Weaver 14 years (2) Feroze Alam " 13 " (3) Shabihul Hassan " 13 " (4) Ali Hassan " 13 " (5) Asad Ali " 14 " (6) Muhammad Kaseer " 14 " (7) Rasheed Ahmad " 14 " (8) Muhammad Hassan " 13 " (9) Zaheer Ahmad " 14 " (10) Basheer Ahmad " 14 " (11) Muhammad Khitab Khan " 13 " (12) A. Majeed " 13 " (13) Dost Muhammad " 13 " (14) A. Khalique " 14 " (15) Muhammad Ismail " 14 " (16) Nadeem " 08 " (17) Jamil Ahmad P. W. Jobber 14 " (18) Waris Ali Jobber 13 " (19) Habibur Rehman Weaver 05 " (20) Noor Alam " 02 " (21) Mehbood Ali Jobber 08 " (22) Rehmat Shah Cooly 08 " (23) Meheruddin " 02 "

3. That previously there was company established by name "Allied Synthetic Mills Ltd.," at the same place but several years ago it was bifurcated in several companies and establishments and one of said establishment are the respondents. That there have been an average of 60 workers employed with the respondents. That there is a Union of the workman in the respondents establishment which is known as "The Allied Synthetic Mills Labour Welfare Union Karachi" and the said Union is Collective Bargaining Agent. That the respondents Management started refusing to give benefits to the workers and caused harassment to them.

4. That on 3rd February, 1985 workers including 14 applicants were not allowed to resume the duties and were told that letters have been sent at their home addresses.

5. That on the same day, viz. 3‑2‑1985 the Collective Bargaining Agent Union raised an Industrial Dispute vide notice under section 26(1) of I.R.O. 1969 followed by strike notice, dated 17th February, 1985 on which conciliation proceedings came in progress.

6. That on 13‑2‑1985 the respondents Management terminated the services of rest of the workmen by completely closing down and suspending the work of the establishment without obtaining prior permission of the Labour Court as required under Standing Order 11‑A of West Pakistan Industrial and Commercial Employment (Standing Order) Ordinance, 1968.

7. That the respondents Management terminated the services of the workman including the applicants with ulterior motives and the said termination of the applicants is also unlawful for the reasons that permission was not sought prior to closing down of the establishment and also during the pendency of Industrial Dispute.

8. That the applicants sent grievance notices to the respondents Management and the respondents therefore, the applicants approached this Court for and, back benefits.

9. The respondents filed legal objections and reply statement. According to respondents the application filed under section 25‑A(10) Of I. R. O., 1969 is highly misconceived and the same is not maintainable. It is stated by the respondents that there are not more than 30 workmen in the Small Industrial Unit and, therefore, the present application is liable to be dismissed. It is further stated by the respondents that the application for permission to close don the whole establishment is filed the Labour Court and the said application for permission to close down the establishment is pending.

10. The respondents stated that they have paid all the benefits to the workers and there was no complaint for withholding benefits to the workers and, therefore, there is no question of causing any harassment to the workers. The case of the respondents is that respondents were facing acute financial crisis and management was not in a position to meet day to day expenses for the losses suffered during the year 1983‑84, 1984‑

85. The respondents had to retrench 14 workers on 3‑2‑1985. And according to respondents the Management closed down the whole of the establishment on 17‑2‑1985 and terminated the services of the rest of workers.

11. The respondents have, therefore, stated that they could no 14nger run the establishment, therefore, the services of the workers were retrenched and the present application is liable to be dismissed.

12. The applicants filed affidavit in evidence and the advocate for respondents cross‑examined applicant Feroze Alam and Abdul Razzak and thereafter, Dr. yousoof Zai, Advocate for respondents, made an application that he adopts the same cross‑examination for rest of the applicants.

13. Muhammad Amin filed affidavit in evidence on behalf of the respondents and he was cross‑examined by Mr. S. P. Lodhi Representative for applicants.

14. The affidavit in evidence of Muhammad Ashraf was filed and Mr. `S'. P. Lodhi adopted the same cross-examination of Muhammad Amin.

15. I have heard Mr. S.P. Lodhi and I have perused the written arguments submitted by Dr. Yousoof Zai on behalf of the respondents.

16. Mr. S.P. Lodhi, the representative of applicants contended before ale that the respondents terminated the services of the workers and closed down the establishment without prior permission of the Labour Court as required under Standing Order P1‑A of West Pakistan Industrial aid Commercial Employment (Standin4 Orders) Ordinance, 1968. Mr. S.P. Lodhi, therefore, urged that this termination is illegal and the workers are entitled to re‑‑instatement and back benefits.

17. On the other hand Dr. Yousoof Zai learned Advocate for respondents contended before me that the Management is competent to retrench and terminate the workers in the process of closing down the establishment. The learned Advocate for respondents urged before me that prior permission of the Labour Court is not essential and that can be sought side by side. According to him, the applicants have got no case for re-instatement and the present application is liable to be dismissed.

18. I have carefully considered the contentions advanced before me and I have gone through the record of the case.

19. The paramount question for consideration in this case is that whether respondents can retrench and terminate the services of workers and close down establishment without prior permission of the Labour Court.

20. In order to appreciate the contentions I would like to produce the provisions of Standing Order 11‑A of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 which reads as under: ‑

11. A. Closure of establishment,‑Notwithstanding anything contained in Standing Order 1 no employer shall terminate the employment of more than fifty per cent of the workman or close down the whole of the establishment without prior permission of the Labour Court in this behalf, except in the event of fire, catastrophe, stoppage of power supply, epidemics or civil commotion.

21. The counsel for respondents relied upon the case of South British Insurance Employees Union v. Labour Court reported in 1975 SCMR

49. According to this Authority Standing Order 11‑A does not spell out any sequence of various steps to be taken in the closure of establishment.

22. The facts of the present case are distinguishable from the facts of the reported Authority.

23. The perusal of the provisions of Standing Order 11‑A clearly shows that no employer shall terminate the employment of more than 50% of the workmen or close down the whole establishment without prior permission of Labour Court. Standing Order 11‑A was added by Act XXIII of 1973.

24. The superior Courts have held in various Authorities that Management is bound to obtain prior permission of the Labour Court before closing down the establishment. The Authority relied upon by, the respondents is, therefore, distinguishable from the facts of the present case.

25. It is an admitted position that respondent retrenched and terminated the services of the applicants and other workers in the month of February 1985. Muhammad Amin, the witness of the respondents stated in the cross‑examination as under: ‑ It is correct that I have not wound up my company. It is correct that up to 17th February, 1985 I terminated the services of the rest of the workers and closed down the establishment. It is correct that on 17th February, 1985 I had not obtained the permission from Labour Court for closing down the establishment. The case is pending before 1st Labour Court Karachi. No permission to close down is granted.

26. These admissions on the part of the respondents clearly establish, that services of the applicants were terminated without prior permission of the Labour Court. It is also an established law that no establishment A can be closed down without prior permission of the Labour Court. Iii the present case the application for closing down the establishment is admittedly made by the respondents on 1‑7‑1985, the application is produced as Exh. R.7. The applicants approached this Court with the present application on 5‑5‑1985. The respondents made the application for permission to close down the establishment much after the present case was filed by the applicants.

27. The respondents have raised the question that they were unable to run factory due to financial crisis. It was duty of the respondents to have approached the Labour Court and obtained permission from Labour Court to close down the establishment.

28. The applicants have, therefore, proved by their evidence than they were illegally removed from services. Admittedly no charge‑sheets C were given to any worker and no inquiry was held against any worker and, therefore, the present retrenchment and termination of the services, is illegal.

29. I hereby re‑instate all the applicants in service with back benefits, with immediate effect.

30. This application under section 25‑A (10) of I . R. O., 1969 stands) allowed. M. Y. H./882/Lb Re‑instatement ordered.