1997 PLP 359 (PLC)

This appeal is directed against the order of the Fourth Sindh Labour Court, Karachi directing reinstatement in service of the respondent with full back benefits.

2. M/s. Pakistan Steel Fabricating are the subsidiary of Pakistan Steel Mills. Respondent Masood Ahmed Khan was employed as electrician from 1‑1‑1984. Subsequently 'he was promoted as Charge man. This company suffered huge losses and on account of re‑organisation the post of Charge man was abolished by way of retrenchment. Other such posts were also abolished and the company offered one month's pay in lieu of notice plus two months' pay as inducement for voluntary retirement. The respondent however did not accept this concession offered by the company. Therefore by an order dated 2nd February, 1993 the services of the respondent were terminated. The order reads as under:‑‑ "Due to continuous recurring losses, paucity of work order and shortage of funds and also in view of adverse business conditions the Management has decided to enforce the retrenchment policy for re‑organising the Company for its survival. Your post has therefore been abolished and you have been redundant and as such your services are no longer required. Your services are, therefore, hereby terminated with immediate effect. You will, however, be paid one month's pay in lieu of notice. You may collect your dues from the Accounts Department on production of No Demand Certificate, during i1ormal working hours. "

3. The respondent served grievance notice on the company and then filed grievance petition before the Labour Court for termination of his service. The learned Labour Court held that termination of the respondent was clear violation of Standing Orders Ordinance as the company had taken the false plea of retrenchment. The Labour Court therefore directed reinstatement of the respondent in service with full back benefits.

4. The services of the respondent have not been terminated on account of any malice or prejudice against him. The services of over 500 workmen were abolished and they were paid two months' wages over and above one month's wages in lieu of notice. Most of the workmen accepted this scheme and retired from service. The others who did not accept the concession had therefore to be terminated under Order 12 of the Standing Orders Ordinance. The Management under this Order is at liberty to terminate the services of a workman for any reason other than misconduct. He has only to be paid one month's wages in lieu of notice. The other requirement is that the order of termination shall be in writing explicitly stating the reason for the action taken. All these conditions under Order 12 have thus been complied with by the company.

5. The contention of the Advocate for the worker is that it is admitted that after this retrenchment about 75 workers were reinstated in this Department which was not in accordance with Order 12 of the Standing Orders but Order 13 provides that the person retrenched shall be the last person employed in that particular category. In this case the post of Charge man was abolished although the electricians were still working. If some more electricians were later on employed in this Department it does not mean that the order has been violated.

6. The management are allowed to exercise full powers of re?organisation for the sake of economy and reduce expenditure in the working of the company. If such restrictions were imposed on their powers, no company can be expected to function as a viable company suffering losses after losses just to avoid such retrenchment. It is only when a worker is A terminated on account of malice and mala fides that the Labour Court can come to the rescue of the world provided the other conditions for termination are fulfilled. In this case it is not the case of the respondent that his service was terminated on account of mala fides or any personal grudge as such the Labour Court shall not interfere in the discretion of the management.

7. The order of the Labour Court is accordingly set aside and the appeal of the appellant company is allowed. The amounts of back benefits deposited by the company are allowed to be withdrawn after 30 days. H.B.T./143/Lb.S ???????????????????????????????????????????????????????????????????? ??????????? Appeal allowed.