P L D 1965 Supreme Court 420 (PLP)

CORNELIUS, C. J.‑This appeal by the Zeal Pak Cement Factory Limited is brought by special leave granted to consider the legality of an order made by the Chairman of the Industrial Court, West Pakistan, directing the re‑instatement of 19 workmen who had been discharged from service by notice "with payment in lieu of notice period and other benefits of their services". (These words are taken from the application of the General Secretary of the Workers' Union on which the order under anneal was made). The application for grant of leave to appeal was made on 15th January 1962, when the Constitution of 1956 was in force, and such an appeal from a Tribunal other than the High Court was competent. The relevant facts are as follows. With reference to an industrial dispute which had arisen between the Union and the Factory, a Conciliation Officer had issued a certificate on the 14th July 1961, to the effect that conciliation had failed. On the 27th July 1961, Mr. Tufail Muhammad, General Secretary of the Union moved an application before the Industrial Court t, for adjudication of the dispute. It was during the pendency of this proceeding before the Industrial Court that the notices of discharge affecting 20 workers were issued. One of them was later re‑employed so that the case of 19 workers remained for consideration by the Industrial Court under sections 28 and 30 of the Industrial Disputes Ordinance of 1959. A full explanation of the circumstances in which the workers were discharged was given on behalf of the Factory. It was that for the more efficient operation of the Factory, the question was raised prior to the 20th May 1961, that surplus staff should be brought under reduction. The matter was discussed by a Director of the Factory on the 20th May 1961, with representatives of the Union. It was explained to them later at a meeting of the Works Committee on the 17th July 1961, that in view of intensity of competition in the cement industry, it was a matter "of vital importance . . . . . to reduce the man‑hours per ton of clinker in order to bring about an increase in productivity". This meeting was held on the 17th July 1961, and there has been placed upon the record a copy of the minutes recorded which show that Mr. Tufail Muhammad was one of 12 persons who attended it. The second item discussed was as to the "forthcoming retrenchment". The minutes show that the question had been first discussed on the 20th May 1961, since when the matter had been examined, and 75 posts were found surplus to requirements, which had to be retrenched, since "it is a matter of vital importance for us to reduce the cost of production per ton, if we want to survive". It was made clear that the rule "last in first out" would be applied consistently with efficiency, capability and conduct, and that the retrenched staff would be allowed the benefits of "notice period, provident fund, earned leave payment and gratuity, etc". It is noted also that Mr. Tufail Muhammad had suggested that a circular on the subject should be issued and that those who "volunteer to go out should be allowed to do so, with full benefits". In compliance with this request, on the 10th August 1961, a circular was in fact issued in which the posts to be brought under reduction were detailed, and provision was made for voluntary resignation, as well as for the most junior employee in each category of posts to be retrenched. Later, it was found possible to make re‑adjustments so that in the end only one supervisor and 19 workmen were served with notices. Of these, one person was later re‑employed. On the basis of these facts, it was contended before the Industrial Court that since the discharge of these workers was not by way of punishment, but by way of proper re‑trenchment within the requirements of the industry itself, the provisions of section 30 of the Ordinance of 1959, were not attracted. The relevant provisions read as follows:‑ "No employer shall, during the pendency of . . . . .proceeding before a Court in respect of an industrial dispute. . . . .save with the permission of the Court, during the pendency of proceedings before the Court, discharge, dismiss or otherwise punish any such workmen except for misconduct not connected with such dispute." The argument advanced for the Factory was that section 30 attracted the permission of the Industrial Court only to cases where a workman was sought to be discharged by way of punishment. This was rejected .by the Chairman from whose order the following passages are extracted to show the reason which prevailed with him:‑ "The ordinary meaning of the word `discharge' is to take away the charge from a person or to remove him from a certain post. The word `discharge' by itself does not convey that the services of certain person are terminated on account of his having been punished for some misconduct." "In the Industrial and Commercial Employment (Standing Orders) Ordinance, 1960 too, there is no provision made for the discharge of a workman for his having committed any misconduct. If a workman commits a misconduct defined in the Standing Orders, then the only punishments which can be awarded to him are either fine or dismissal, but certainly not discharge. It is, therefore, quite clear that by using two separate words in section 30 of the Industrial Disputes Ordinance LVI of 1959 the Legislature meant that those two words should be separately understood and each of them given distinct meaning." The Chairman further expressed the opinion that to allow the employer to discharge a worker otherwise than by way of punishment without the permission of the Court would put a weapon in the employer's hands which could be used with immunity to victimise the workers and there would be no check on the exercise of such power. Accordingly, he directed that the nineteen workers should be re‑instated. Leave was granted to consider whether section 30 of the Ordinance was intended to provide the Industrial Court with "power of control over such a matter as bona fide retrenchment of workers as a part of the general management of the enterprise". The appeal is undefended. We have heard Mr. Ahsan‑ul‑Haq in support of the appeal who has emphasised that it cannot be the intention that the Industrial Court should. have a control over matters belonging to the field of general management of the enterprise, by having a say as to whether for the better working of the enterprise, certain departments or certain jobs should or should not be retained. He stressed that the word "discharge" in section 30 being used in the phrase "discharge, dismiss or otherwise punish" must be understood to refer to discharge as a mode of punishment, and that the view of the Industrial Court on this point was not correct. On reference to the Standing Orders we find that Standing Order No. 12 relates to "termination of employments" and that these Standing Orders do not use the word "discharge" at . all. We agree with the meaning given to the word "discharge" in the order under appeal, and consider that it, is in material respects equivalent to "termination of employment". But in Standing Order No. 12 itself we find in sub‑paragraph (2) reference to termination of employment by way of punishment in the following words:‑ "but the services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity of explaining the charges of misconduct, alleged against him in the manner prescribed in paragraph 13" (ie. Standing Order No. 13). The view that discharge by way of punishment is wholly outsider the contemplation of section 30 of the Ordinance cannot be sustained, in view of this clear provision for termination of employment of a temporary employee by way of Punishment. In the case of permanent employees, the provisions of Standings Orders Nos. 12 and 13 read together would indicate that they are to be differentially applied, but with that, we are not at present concerned and in an undefended appeal it is undesirable that we should deal with any matters except those which are relevant to the decision of the case before us. It is sufficient in this case to say that the argument on which the Industrial Court has been able to bring a matter of simple discharge by notice of termination of employment, within its powers of h control over an enterprise, under section 30 is not well founded. The question of the exercise of such power as against the general power of an enterprise to reorganise its operations for better Management and, in a case like the present, to increase productivity, has been considered earlier by this Court, in several cases of which one, namely, the case of Pakistan Petroleum Workers' Federation v. Burmah‑Shell Oil Storage & Distributing Co. of Pakistan Ltd. (PLD1961 SC479) maybe mentioned. There, the provision of section 33 of the Industrial Disputes Act, 1947, which in material respects are no different from those of section 30 of the Ordinance of 1959 were considered. At page 512 of the report will be found discussion of a case where the office transport service of three Companies had been re‑organised so as to render a number of motor car drivers surplus to requirements, who were accordingly discharged by notice. Three of them who were permanent drivers raised the contention that their dismissal was illegal as it had been made without the prior permission of the Tribunal during the pendency of the adjudication, and that the discharge was by way of victimization. The Tribunal had opined against them on this ground, holding that the discharge was made in consequence of a bona fide reorganisation inside the three Companies by which the redundancy was brought about. But the Tribunal had interfered in favour of two of the senior drivers, who had challenged the re‑employment after the retrenchment of two of their juniors, and had directed that they should be employed instead, and this was the question for decision. The following observations made in the case are however relevant to the question before us:‑ "The redundancy was brought about by re‑organisation of a permanent nature, which is said to be still in existence. The Tribunal has found that the re‑organisation was not designed to affect any employee in particular, but was carried out bona fide. Yet, he found that the preferential re engagement of Ghulam Nabi and Habib Bux constituted a breach by the Company of the provision in section 33 of the Industrial Disputes Act that no employer shall during the pendency of an adjudication `discharge, dismiss or otherwise punish any workman except for misconduct not connected with the dispute'." The order of the Tribunal requiring that Ghulam Nabi and Habib Bux should be replaced by Rafi Ahmad and Maqsoodul Hassan was set aside, but enough was said by the Court to indicate its approval of the Tribunal's finding that a bona fide re‑organisation by which redundancy results, and consequent notices of discharge were issued by the employer, was not a matter falling within section 33 of the Act of 1947. In the present case, there is no manner of doubt that there was a re‑organisation carried out for a bona fide purpose of the industry, and the notices of discharge were given exclusively in relation to the redundancy which thus resulted and without any taint of victimization. There was nothing in the nature of punishment or vindictiveness involved. We consider that the action of the Factory in respect of the employees retrenched in this case as surplus to requirements being bona fide, it did not attract the control of the Industrial Court under section 30 of the Ordinance, and we accordingly allow this appeal and set aside the order of Chairman directing the re‑instatement of these 19 workers. We make no order as to costs. A. H. Appeal allowed.