1995 PLP 692 (PLC(CS))

10. The respondents have 'led evidence to show that they are registered under the Shops and Establishments Act and they do not employ twenty or more persons. This fact has not been controverted or rebutted by the appellants in cross‑examination. There are number of decisions on the point that where the number of workmen, whether more than 19 in an establishment, is disputed the burden of proof is on the part, asserting the same under section 101 of the Old Evidence Act, or Article 119 of Qanun‑e‑Shahadat, 1984. My learned predecessor Mr. Justice (Retd.) ZA. Channa held in a similar ‑case of Awan Industries v. Sarfraz Khan and 2 others 1981 PLC 45 that: "It has repeatedly been held by this Tribunal that where it is denied by an establishment that it was employing 20 or more workmen, the burden of controverting this fact and proving that the Standing Orders Ordinance were applicable to it, lay on the workmen making such claim." In the case of Recha Pakistan Limited v. Abdul Ghaffar Virani reported in 1993 PLC 2 it was held by Mamoon Kazi, J. "Employee in his grievance petition though had asserted that the number of workmen employed by employer was more than 20, but had not supported his assertion either by his affidavit‑in‑evidence or any other reliable evidence Employers in their written statement had categorically stated that number of workers employed by them was less than 20, thus Standing Orders Ordinance, 1968 was not applicable to them Burden, in circumstances, was on employee to prove that employer had employed 20 or more workers during preceding year and that Trial Court was vested with jurisdiction to try his case, but failed to prove same .Appellate Court below had erred in holding that burden was on employer to establish that number of workmen employed by them was less than 20."

11. But in these appeals the appellants as workers have signed the list of workers in each separate establishment, which shows that these establishments were employing less than 20 workers each. The 'Representative for the appellants, however, contend that since these establishments work under the same roof and were owned by the same Directors they could be regarded as one consolidated establishment even though each unit belonged to a separate Joint Stock Company. Section 2(b) of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 defines "commercial establishment" as a unit of a Joint Stock Company but does not include in the definition several units of several companies to be considered as one consolidated unit for the purpose of counting the number of workmen. In the case of Abdul Waheed v. Brooke Bond (Pakistan) Ltd. reported in 1990 PLC 462, the respondent company had several units registered under the Shops and Establishments Ordinance, 1969. Each unit employing less than twenty workers it was held "That workers employed in each such Branch were not entitled to file grievance petition against the company for their removal from service.‑ It was also observed' in a similar case reported in PLD 1978 Kar. 649 by Tufail Ali, CJ. and Fakhruddin, J. in Constitution petition before the Karachi High Court, that the learned counsel is clearly in error in the meaning that he seeks to give to the expression `establishment' which is defined in Industrial Relations Ordinance, 1969, as follows: "`Establishment' means any office, firm, industrial unit, undertaking, shop or premises in which workmen are employed for the purpose of carrying on any manufacturing process, business, trade or service." From the above definition it would appear that an employer may have more than one establishment, for example offices in a commercial area, shops in business area or one or more industrial unit in an industrial area and the expression establishment' would include not whole of the establishments of an employer but each of them individually. In another decision of Karachi High Court in the case of Ihsan Sons Limited v. Abdul Razak Habib and 2 others 1987 PLC 390 it was stated in the similar case by Haider Ali Pirzada, J. that: . "Mere fact that a company, individual or association of individuals runs or sets up separate establishment at different places would not authorise treating all such establishments, to be one establishment either for the purposes of Industrial Relations Ordinance or Standing Orders Ordinance, even if there was a provision for transfer of staff from one establishment to another."

12. Thus, it has been sufficiently established from the above decisions that' where the number of workers in each establishment is less than twenty, the establishments cannot, by any stretch of imagination, be joined together for the purpose of showing the number of workers to be more than twenty. West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance and Industrial Relations Ordinance would not be applicable to the case of workers in such event and their petitions under section 25‑A of the Industrial Relations Ordinance, 1969, against termination of service will not be maintainable.

13. The case of the Companies is that they terminated the services of some of the workers legally after notice as a result of re‑organisation because the Auditors had pointed out losses on account of excessive expenditure of establishment. Re‑organisation is a right of the Management, which has not been taken away by the Standing Orders Ordinance or the Industrial Relations Ordinance, 1969. The Standing Orders, on the other hand, have provided procedure under section 12 for terminating the services of such workers as are not required. An employer has full liberty under such circumstances to terminate the services of permanent workers by giving one month's notice or one month's pay in lieu of notice thereof alongwith gratuity and other legal dues where the termination has been affected bona fide for reasons of retrenchment etc.

14. In the case of Muhammad Siraj‑ud‑Din v. Labour Appellate Tribunal and another reported in 1983 PLC 1286 it was held by Abdul Hayee Kureshi, CJ. and Munawar Ali Khan, J. that: "Termination of service on account of retrenchment due to re organisation, challenged on the ground of mala 'fide where the petitioner had failed to prove that termination of his services was in any way mala fide, it was observed that the employer was free to make re‑organisation as was necessary and in consequence thereof retrench as many members of establishment as found redundant." In another case of Zeal Pak Cement Factory Limited v. Chairman, Industrial Court reported in PLD 1965 SC 420 it was held by Cornelious.C.J., SA. Rahman, Fazle‑Akbar and Hamoodur Rahman, JJ. that: "`Discharge' of redundant workers after notice as a measure of re -organisation carried out for bona fide purpose of industry', without any taint of victimisation, does not attract control of Industrial Court." In the course of judgment by Cornelius, CJ., it was observed: "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 notice of discharge was given exclusively in relation to the redundancy which thus resulted and without any taint of victimisation. 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."

15. Even where the termination was during the pendency of application for registration under section 8‑A of the I.R.O., 1969, it was observed by Nasir Aslam Zahid, CJ., in the case of Messrs Shaheen Airport Services v. SLAT and 2 others 1992 PLC 284, as under: "Termination simpliciter is not covered by section 8‑A. For the employee, whose services have been dispensed with and who wants to take benefit of section 8‑A, it has to be shown that the termination was by way of discharge, dismissal or by way of punishment. Termination simpliciter which is not discharge, dismissal or by way of punishment and which is otherwise valid in law,, is not hit by section 8‑A. To this extent, therefore, the submission of the learned counsel for the petitioner is correct:"

16. But the above discussion regarding right of the Management to retrench workers on account of re‑organisation is only of academic importance because the appellants have failed to establish that they were employed in establishment having twenty or more employees each and the Standing Orders Ordinance and Industrial Relations Ordinance would not, therefore, be applicable to their case specially when it has been shown that the establishments were registered under the Shops & Establishments Ordinance. In the case of Muhammad Bashir Saeed Khan v. M/s. A.L Farooki & Company and others reported in 1993 PLC 381 it was observed by my learned predecessor Agha Ali Hyder, Appellate Tribunal, that: "Where the post which employee was holding was abolished due to re‑ organisation of office of employers and services of the employee were terminated on that ground and the employee failed to prove by any evidence that number of employees working with employers was twenty or more than that the Trial Court rightly found that provision of Standing Orders Ordinance were not applicable to the case."

17. As regards the case of the workers under the Shops & Establishments Ordinance, section 19 of the Ordinance reads as under: "

19. Termination of employment.‑‑‑(1) For terminating employment of a permanent employee, one month's notice in writing shall be given either by the employer or by the employee and in lieu of notice, one month's wages calculated on the basis of average of wages earned during the proceeding three months shall be paid." The plain reading of the aforesaid provision show that a permanent employee's employment could be terminated with one month's notice in writing or one month's wages in lieu of notice under the Shops. & Establishments Ordinance.

18. The only question that remains is whether the termination of the appellant workers was mala fide as they had formed a Union by joining the workers of other establishments. In this connection the respondent companies have produced Auditors Report to the Shareholders with Statement of Expenditure and Balance‑sheets of Profits. The re‑organisation was necessitated by the Auditors Reports and the redundant workmen were given notices of termination. These facts have not been controverted by the appellants. The burden of proving mala fides is on the appellants. Mere joining the Union cannot be regarded as the reason for termination. There was no proof of any dispute with the Union.

19. In the result I can see no reason to interfere with the findings of the Labour Court. The decision of the Labour Court is maintained and these five appeals are dismissed. H.B.T./2463/Lb.S Appeals dismissed.