1982 PLP 978 (PLC(CS))

Mahmood A. Ghani for Respondent. Date of hearing: 11th‑November, 1981, All the 35 appellants were workmen employed in Messrs G. M. Fishe ries Ltd., the respondents herein. By separate, but similar orders, dated 31st January, 1981, the services of the 35 appellants were terminated on the ground of slackness in work lack of export orders and general depres sion in the business activities. The orders of termination of services of the appellants further recite that in effecting the retrenchment of the appellants the principle of "last in and first out" had been strictly kept and that in accordance with the law each of the appellants would be paid one month's wages in lieu of notice, in addition to all other legal dues, which should be collected from the Cashier of the Company. The appel lants filed separate grievance petitions against the termination of their services, but the same were dismissed by the learned Vth Labour Court, by its consolidated decision, dated 10th August, 1981. Aggrieved by this decision, separate appeals have been filed before this Tribunal by each of the 35 appellants. This order will dispose of all the 35 appeals.

2. I have heard Mr. A. G. Sheikh, the learned counsel for the appel lants, and Mr. Mahmood A. Ghani, who appeared for the respondent Company.

3. The sole ground on which Mr. A. G. Sheikh assailed the re trenchment of the appellants and the impugned decision of the learned Labour Court was that the contention of the respondent Company that there was slackness in the demand for the prawns processed by the res pondent Company and that there was general depression in the prawn business was incorrect and at any rate had not been established. The respondent Company has led 3 pieces of evidence to substantiate its con tention about slackness of demand and general depression in its business. The first was the letters /stalexe/telegrams from the foreign buyers which appear at pages 763, 767, 769 and 771 of the record of the learned Labour Court. These letters etc. were produced, by the respondent Company through its Manager‑cum‑Chief Accountant of Presiding Divi sion, Qamar Sajjad. These letters clearly show that there was world‑wide drop in the sale of frozen shrimps which is the business carried on by the respondent Company. These letters/telexes are from inter national corporations and were received by the respondent‑Company in the normal course of its business. They substantially support the contention of the respondent‑Company that there was a world‑wide depression in the frozen shrimps industry, Substantial support to these documents is provided by the newspapers reports appearing at pages 781 to 795 of the record of the learned Labour Court. All these reports show that there was a slump in the world shrimp business and that this world‑wide slump had severely affected the local shrimp market and industry. These reports appear in different newspapers of different dates and depicit the local as well as the foreign condition in the shrimp industries. A further factor indicating that the business of the respon dent‑Company had greatly declined and was hit by the depression is the profit and loss statements of the Company for the years 1978, 1979 and 1980. These statements of accounts were produced through Sheikh Jalaluddin, a partner in Sandhoo and Company Chartered Accountants. The statements of accounts for the year 1978 and 1979 have been dull audited while the statement of accounts for the year 1990 is still under audit. According to these statements the respondent‑Company suffered a loss of Rs.31,54,477.39 during the year ending 31st December, 1978, a loss of Rs.2,13,982.64 for the year ending 31st December, 1979, and a further loss of Rs.28,37,981.25 for the year ending 31st December, 1980, making a total loss of Rs.62,08,441.28, during the period of the above 3 years. No evidence in rebuttal of these statements of accounts has been produced by the appellants. The evidence regarding these losses‑is thus to be accepted and cannot be ignored. The evidence of the losses to gether with the other 2 pieces of evidence indicating slump in the shrimps business both in the country as well as in the World market, clearly substantiates the stand of the respondent‑Company that the retrenchment was necessary as well as bona fide.

4. Mr. A. G. Sheikh sought to argue that the retrenchment was mala fide and was manoeuvred to crush the union activities of the appel lants. In support of his contention, he advanced a two‑fold argument. His first limb of contention was that the plea of slackness of the demand in the shrimps business stands completely demolished by the fact that huge overtime was taken by the respondent‑Company from its work men. A very large number of overtime slips have been produced by the appellants which appear at pages 67 to 665 of the record of the learned Labour Court. Most of the slips are in respect of an individual workers but some of the slips are in respect of 2, 3 or even more work men. However, as pointed out by the learned Labour Court, the there fact that overtime was being taken by the respondent‑Company through its workmen does not mean that there was no slump in the shrimps business of slackness in the demand as contended by the respondent Company. In considering the fact of overtime we must also bear in mind the nature of the industry being carried on by the respondent Company. It is an admitted position that the business of the respon dent Company is solely dependent upon the catches of shrimps brought by trawlers and fishing boats. There are no fixed times for the return of the trawlers and the fishing boats. Furthermore the size of the catches brought by them largely depend upon variable factors like the season, the weather and the passage of shrimps shoes near our coast lines and fishing grounds. Moreover the shrimps are admittedly a perishable commodity. As soon as the catches are brought to the shore, the shrimps must be at once cleaned and processed, canned and kept in a frozen condition until their export. Special arrangements are also needed for the export of the processed shrimps as they have to be transported in ships having arrangements for freezing and cold storage. As such, there would be tithes when there would be urgent need for overtimes work because of receipt of large catches or shrimps and other times there may be no work or very light work in the factory because of poor catches of there being not enough raw material to keep the work men busy. Apart from the fact that shrimps industry being a special kind of business, which has frequent rush times and slack times, since the shrimp industry in Pakistan is export oriented, any slackness of demand or depression in the world markets adversely effects the shrimp industries in the country. I have already referred to the evidence indicating that there was depres sion in the world markets so far as the demand of frozen shrimp is con cerned. There was thus adequate justification fur the respondent‑Company to effect retrenchment and cut down its lossess. This Tribunal, in the case of Textile Corporation of Pakistan Ltd. v, Bar Ali and 36 others decided on 30th September, 1981, while upholding the right of the management to retrench workers in the case of continued losses, observed as follows:‑ "This Tribunal, in 3 recent cases, namely Messrs Bayer Pharma Ltd. v. Mirza Hussain Akhtar (1981 P L C 24) Corning Glass (Pak.) Ltd., Karachi v. Muhammad Hanif and another (1981 P L C 361) and Utility Stores Corporation of Pakistan Ltd. v. Mahboob Nurul Amin, decided ort 23rd September1981, has reviewed the authorities, both in Pakistan and in the Indian Jurisdiction, on the subject of what constitutes retrench ment and when retrenchment can be validly resorted to by the employer. The rule folio wed in all these 3 decisions is that the management has the right and the power to re‑organize, mechanize or improve the industrial process of an industrial establishment and for the purpose of effecting economy or cutting losses, is entitled to retrench surplus staff, provided that the retrenchment is bona fade and is not a cloak or device to get rid of any workmen who are considered inconvenient or undersirable. Huge losses having been incurred by the mills of the appellant corporation not only during the period from 30th September, 1974 upto 30th September, 1978, but also for the subsequent period, as appears from the audited accounts of the mills produced by the Chartered Accountant of the mills, Sirajuddin, Qasim which indicate that during the period from 30th September, 1978 to September, 1979, the mills had suffered a loss of Rs.57,54,649.75. the man agement of the appellant Mills was not only entitled to but clearly appeared to have been acting on sound business principles in effecting sensible retrenchment within the provisions of law.

5. The second limb of the argument of Mr. A. G. Sheikh, challeng ing the retrenchment of the appellants as being male fide is also without substance. The mere fact that among the retrenched workers were the General Secretary of the C. B. A. and some other officers of the Workers) Union does not give rise to the inference that the retrenchment was mala ‑fide and was effected for the purposes of crushing the union activities. As already pointed out; the orders of retrenchment of the appellants specifically asserted that the principle of "last in and first out' a" being strictly followed. It was, however, contended by Mr. A. G. Sheikh that this principle was violated and that the juniors were retained while the seniors were thrown out. There is, however, no evidence on the record in support of this contention. No doubt, the appellants in their evidence before the learned Labour Court have alleged that the principle of "last in and first out" was violated but no names of senior persons, who were thrown out or junior persons who were retained in service, were given by them nor was any of the said senior persons; who were thrown out, examined by them. In the absence of any such evidence, the con tention of the appellants that this principle was not followed cannot be given any weight or consideration. Since it has not been established that the General Secretary was senior to any person who had been retained in service, the mere fact that of his being General Secretary of the C. B. A., did not protect him against the retrenchment. In fact if he had not been thrown out while his seniors were thrown out, the latter would have had a valid grievance against the respondent‑Company.

6. It was finally urged by Mr. A. G. Sheikh that the termination of services of the appellant was in violation of the settlement arrived at bet ween the respondent‑Company and its C. B. A. on lst October, 1980, which settlement is to continue to remain in force till 1st February, 1982. There is, however, nothing in the said settlement which places any impe diment in the way of the respondent‑Company to effect bona fide retrench ment. The mere fact that the settlement recites that the Union representatives had assured the respondent‑Company that the workers would work hard and efficiently so as to increase production or that the union had agreed not to raise any demand of financial nature during the period of operation of the settlement cannot be considered as being in return for any implied assurance on the part of the respondent‑Company that no retrenchment would be effected.

7. For the reasons discussed by me above, I find no merit in these 35 appeals and would accordingly dismiss the same.