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Petitioner: MAZDOOR UNION FARAN SUGAR MILLS through General Secretary VS Respondent: FARAN SUGAR MILLS LIMITED through Chief Executive and 2 others
Court Name: National Industrial Relations Commission Judge(s): Ali Nawaz A. Channa Title:MAZDOOR UNION FARAN SUGAR MILLS through General Secretary vs FARAN
SUGAR MILLS LIMITED through Chief Executive and 2 others Case No.: Case No,4A(51) of 2003-K, 24(51)/2003-K, Date of Judgment:2003-07-24 Reported As: 2006 PLC 404 Result: Petition dismissed Judgment ORDER ' ALI NAWAZ A. CHANNA (MEMBER).---The petitioner-Union namely Mazdoor Union Faran Sugar Mills have filed this petition under section 49(4)(e) of the I.R.O., 2002 through their General Secretary Abdul Karim Mangwano against the respondents on the following facts and circumstances. 2. That the petitioner's union is registered and is also CBA in the establishment of respondents. The petitioners have alleged that the respondents from the very inception are against the trade union activities in their establishment and they have always been pressurizing the members of the union not to carry out their trade union activities. They have alleged that the respondents had been pressurizing their office-bearers to resign from the union otherwise they will be terminated from service. They gave instances that when their General Secretary Abdul Karim Mangwano did not resign from the union, he was dismissed from service and he had to file grievance petition before the Labour Court where it is still pending. They have further stated that it is the practice of the respondents to show losses in each year to make a ground for retrenchment of the employees. They have further alleged that in 2001-2002 the respondents had shown losses in their balance sheet which were challenged by the petitioner union and such application was given to the Director Labour for re-audit of the accounts which application is still pending with the Labour Department. The petitioner union has alleged that for the season for 2002-2003 the union had unilaterally offered to the respondents some measures in good faith to over come the losses or difficulties being faced by the respondents. In this connection they executed settlement on 30-12- 2002 by which the union waived their right of bonus and annual increments and also agreed for the payment of electricity bills. According to them due to this settlement from 1-1-2003 to April,
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2003 the factory functioned without any hindrance or without any problem. Their case is that crushing came to an end on 11-4-2003 whereafter seasonal and retainees workers were relieved. They have alleged that in the previous years the workers were being sent on forced leave after the conclusion of season but this year a settlement was reduced into writing whereby it was agreed that the workers will be sent on en bloc holidays from 18-4-2003 to 25-5-2003 and those who have no leave in their credit will be granted advance leave from their coming year. It was also decided that payment for the month of April, 2003 will be made on 17-4-2003. The petitioners have further alleged that on 17-4-2003 at about 11-30 a.m. The General Secretary and President of the union were called by respondent No,1&2 in their office and impressed upon them that the union should not submit their charter of demands on 1-5-2003 and one year's extension may be approved in the existing settlement and that there should be extension of one month in en bloc holidays from 18-4- 2003 to 25-5-2003 which may be extended upto 26-6-2003 and that retainee workers may be allowed to be converted into seasonal workers on which the union show no objection. The petitioners have stated that they did not concede to these demands of the respondents and said that they will submit their charter of demands on due date and it will be decided through bilateral negotiations. The petitioners have alleged that all of sudden on 18-4-2003 they found a notice published in daily newspaper "IBRAT" that services of 426 workers have been terminated which is more than 50% of total strength and as such it is in violation of S.O.11-A of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 and is unfair labour practice on the part of respondents. They have further alleged that on 16-4-2003 the respondents had filed petition before Labour Court No,6, Hyderabad under section 11-A of Standing Orders Ordinance where it is still pending and only notice has been issued to the union whereas no permission to terminate the services of employees or for closure of the establishment has yet been granted by the Labour Court. The petitioners have alleged that against the termination of 426 workers they made complaint to the higher authorities including Chief Minister of Sindh, Labour Department and other high authorities that the respondents have illegally terminated the services of 426 workers and on their application the Labour Director called the meeting of the management and the union but the respondents refused to abide by the decision of Director Labour. The petitioner have alleged that the respondents have employed armed people in their factory premises who are harassing and victimizing the employees and are also giving them temptations to resign from their posts. The petitioners have finally alleged that the reasons for termination given by the respondents are false, fictitious and fabricated as the respondents have earned huge profits in this season as in this season they have purchased the sugarcane at the Rs,43 per maund whereas in the previous season it was purchased by the respondents at from Rs,50 to Rs,80 hence they purchased the sugarcane at the cheaper rate and crushed more sugarcane and they produced more sugar and gained heavy profits. The petitioners have prayed that action of the respondents in terminating more than 50% employees without permission of Labour Court are the acts of unfair labour practice and that the whole process taken by the respondents may be declared as act of unfair labour practice and that the terminated employees may be restored to their original position. 3. The respondents have filed written comments in which they have denied the various allegations of the petitioners. They have denied that they are against the trade union or that they are against the trade union activities of the petitioner union. They have stated that union exists in their establishment since many years and that they have been continuing their trade union activities in incessantly. They have denied that they had ever victimized or harassed the petitioners union or their office-bearers or their members. They have however clarified that the company was suffering huge losses and that during the year 2001-2002 they had suffered losses to the tune of Rs,12 crores which was brought forward to the present season and in this season too they have suffered huge
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losses. They have given the reason for such huge losses in p.Ara 2 of their written comments. There are number of factors which according to the respondents led to the suffering of huge losses to them. At least 13 reasons have been given which have caused serious loss to them, important of them is that Govt. Had imported 6 lacs metric tons sugar from India and as such there was heavy accumulation of sugar due to which the prices came down and stores already produced by the respondents as well as other Sugar Mills became surplus with them. The respondents have stated that average ex-factory sale of the sugar including of sales tax was about Rs,17.74 paisas whereas the respondents' cost was about Rs,22.46 per kg as such the respondents were suffering huge losses on the said prices. The respondents referred to the Business Recorder Market Bulletin dated 8-2-2003, 19-2-2003, 4-3-2003 and 22-3-2003 which carry articles that sugar Industries have suffered heavy losses. They have also stated that due to short supply of water there was decline in the production or raw sugarcane which also led to the losses of Sugar Industries. In these circumstances according to the respondents there was no other way for the respondents than to terminate the services of employees to over come the losses being suffered by the respondents. They have stated that for that purpose they have terminated the service of 426 employees because they cannot afford to suffer more losses by keeping those employees in service. They have stated that they have applied right course by terminating the services of employees and simultaneously filed application for permission to terminate the services of said employees. They have stated that law is that termination is the first step and not the last step as such' the termination of 426 employees is not an act of unfair labour practice whereas it is the legal act as enshrined in section 11-A of the Standing Orders Ordinance, 1968. 4. The respondents have also raised various legal pleas, some of them conspicuously are that the petitioner-Union has no right to espouse the causes of general workers, that the petition has been filed after about two months of termination of the employees who cannot be reinstated, as unfair labour practice, if any has already been committed and completed, hence this Court has no jurisdiction to entertain this petition. It was further pleaded that there was no industrial dispute pending, hence no stay order can be granted to the petitioners. 5. At the time of admission, the operation of Notice published in daily newspaper dated 18-4-2003 by which the services of 426 employees were terminated, was suspended but the respondents filed writ petition before the Hon'ble High Court where jurisdiction of this Court was challenged to pass such orders and the Hon'ble High Court by consent of the parties remanded the case to this Court and suspended the stay order of this Court and gave direction to decide the case within 15 days. After remand of the case Mr. Faisal Ghani, the learned advocate for the respondents frankly conceded that legal objections raised by him were mixed questions of facts and law as such he offered that he will not raise preliminary legal objections at this stage but would like to press them after recording of evidence of both the parties. Accordingly both the parties were allowed to lead their evidence. 6. The petitioners in support of their case filed affidavits-inevidence of Abdul Karim Mangwano, Abdul Latif, Qadir Bux, Fateh Muhammad and Hussain Ali. All the witnesses were cross-examined by Mr. Faisal Mahmood Ghani, learned advocate for the respondents. The respondents in support of their case examined Muhammad Haroon, General Manager Administration on general points and Abdul Razzak, Manager Finance on the financial matters. Both these witnesses were cross- examined by Mr. Azmati, the learned advocate for the petitioners. 7. From the pleadings of the parties and from the evidence adduced by the parties, the points which require consideration of this Court are as under:-- (i) Whether the petition of the petitioner is maintainable. (ii) Whether this Court has no jurisdiction to entertain this petition'.
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(iii) Whether by terminating 50% of employees, the respondents have committed acts of unfair labour practice. (iv) Whether the terminated employees can be reinstated by this Commission in exercise of its powers under S.49(4)(e) of I.R.O., 2002. (v) Whether some of the employees have taken their dues in full and final settlement, whether some of the employees have served grievance notices on the respondents with intention to approach labour Court and whether the union cannot file the case on behalf of remaining employees. 8. I have heard the learned advocate for the petitioners and the learned advocate for the respondents. I have gone through the pleadings of the parties and evidence adduced by the parties. 9. My findings on the above points are as under: 10. Points Nos.I & II:--On these points the learned advocate for the respondents argued that the jurisdiction of this Court is limited to the cases of prevention of occurrence of unfair labour practice but where the unfair labour practice has already been committed then this Court has no jurisdiction. He argued that the jurisdiction of this Court is attracted where there are specific and concrete allegations of unfair labour practice otherwise this Court will lack the jurisdiction in such matters. In this connection he placed his reliance on PLD 1988 SC 53 in which it was held that:. "It is therefore not right to construe the clause in question as conferring a general jurisdiction upon the benches to entertain all kinds of grievance petitions even though they may not be relatable to unfair labour practice." On the principle of this authority he argued that the petitioners have failed to spell out any specific act of unfair labour practice on the part of respondents, hence the petition of the petitioners is devoid of instances of unfair labour practice and as such this Court has no jurisdiction to entertain this petition. 11. On the other hand Mr. M.A.K. Azmati, the learned advocate for the petitioners argued that the petitioners have made out a very good case of unfair labour practice on the part of respondents and the instances of unfair labour practice have been spelled out in the petition therefore this Court has jurisdiction to entertain this petition and to declare the acts of the respondents as acts of unfair labour practice. In particular he laid his emphasis on a plea that more than 50% of employees were terminated in violation of S.11-A as such it is an act of unfair labour practice. 12. I have gone through the petition very minutely. There are general type of vague allegations contained in the petition which are to the effect that the union was not liked by the respondents, that the union activities of the members and officers of the union were not usually liked by the respondents, that the respondents were harassing and victimizing the office-bearers of the union to resign from their posts, that the respondents were compelling the office-bearers and the members of the petitioners union to give up their demands and finally that the respondents were pressurizing the petitioners to go on en bloc holidays of extended period. ' All these allegations are past transaction. Whatever had happened in the past was condoned or waived by both the parties, because subsequently to these disputes the settlement was arrived at between the parties as such all the allegations of the petitioners stood validate and settled. These past transactions and past allegations, which have been amicably settled by both the parties, cannot be made basis for ground or instance of unfair labour practice in this petition. Even perusal of the petition would reveal that the petitioner had realized the difficulties of the respondents in sustaining the losses and thereby they had forgone their vested rights of bonus, annual increments and payment of electricity bills. However all these acts which were agitated previously A to be wrong doings on the part of respondents have now no nexus with the present petition. This Court will be concerned with the acts of unfair labour practice which have happened after those settlements. I will however deal with the fact whether the termination of 50% employees was an act
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of unfair labour practice or not while discussing the remaining other points. At this stage it is clear that the petition is devoid of material grounds and instance of unfair labour practice. These points are therefore answered accordingly. 13. Point No,III: This is most important and crucial point for decision of this case. In this regard the contention of learned Advocate for the petitioners is that the respondents terminated the services of more than 50% employees in violation of S.O.11-A of Standing Orders Ordinance, as such it is an act of unfair labour practice as defined in S.63(1)(I) of the I.R.O., 2002. In order to understand the import and application of both the sections it is necessary to reproduce both these sections which are as under:- 11-A. Closure of establishment--Notwithstanding anything contained in Standing Order 11, no employer shall terminate the employment of more than fifty per cent of the workmen 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." "S.63(1)(I). Close down the whole of an establishment in contravention of Standing Order 11-A of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (West Pakistan Ordinance No,VI of 1968)." 14. The learned Advocate for the respondents in order to meet with this situation argued that S.63(1) (I) postulates that if whole establishment is closed down without permission of Labour Court then it is unfair labour practice but where more than 50% of the employees are terminated without permission of the Labour Court it is not an act of unfair labour practice. 15. I have considered the arguments of learned Advocate for the parties in juxta-position with the above referred sections. 16. Mr. M.A.K. Azmati, learned Advocate for the petitioners in support of his contention that termination of more than 50% of employees is an act of unfair labour practice has placed his reliance upon 1983 PLC 74, 1991 PLC 305, NLR 1981 T.D. 245 and 1998 PLC 490 and page 495. I have gone through these authorities. In these authorities it has been held that termination of more than 50% of the employees without permission of the Labour Court is an illegal act but in none of these authorities it has been held that such act is act of unfair labour practice. Incidentally the first three authorities are by the Labour Appellate Tribunals which Tribunals do not deal with the cases of unfair labour practice. These appeals had arisen out of the orders of the Labour Courts which admittedly were not dealing with the cases of unfair labour practice. The act of terminating more than 50% of employees might be an illegal act which may be cognizable by the Labour Court and appeal may be heard by Tribunal but these authorities have never stipulated that such act would amount to act of unfair labour practice. In the last authority 1998 PLC at page 490 the Hon'ble High Court remanded the case to the Labour Court for giving fresh decision for permission to close down the establishment as certain material aspects were not considered by the Labour Court. The other authority reported at page 495 is on some other point and not on S.O. 11A. This authority is therefore not applicable being not relevant. Other authority which was relied upon by the learned Advocate for the petitioners on S. 11-A was of Full Bench of N.I.R.C. Reported NLR 1997 T.D. 507 but this authority is also not of help and assistance to the learned Advocate for the petitioners as in the reported case the whole establishment was wound up by the management and such acts of respondents were held the acts of unfair labour practice. In this case only 50% of the employees have been terminated while the establishment has not been closed, nor there is any application before the Labour Court for permission to close down the establishment but the application before the Labour Court is for permission to terminate the services of 50% of employees. Accordingly this authority is neither applicable to the facts and circumstances nor is of any help and assistance to the learned Advocate for the petitioners. Even otherwise the perusal of S.0. 11A would reveal that it deals with two situations, one is that employer cannot terminate the services of more than 50% of
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employees while in another part it is stipulated that the employer cannot close down the whole of establishment. Both these situations are subject to the permission of concerned Labour Court. Second part of S.11A has been made unfair labour practice as defined in S.63(1)(I) which has been reproduced above. It means that if whole establishment is closed without permission of the Labour Court, it will be an act of unfair labour practice but if more than 50% of the employees are terminated it has not been made act of unfair labour practice under S.63. The Bench of this Commission in case No,4A(281)/2000-K, decided on 16-1-2001 in relation to S.11A has made the following observations which are pertinent and applicable to the facts and circumstances of this case. For ready reference they are reproduced as under:-- "From the above provisions it shall appear that there is bar on the employer to terminate the employment of more than fifty per cent of the workmen 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. However in case the employer terminates the employment of more than fifty per cent of the workmen, it may be termed as contravention of S.O. 11A of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, but is not an act of unfair labour practice, as it does not fall within any clause of section 15 of the I.R.O.1969, but in case the employer closes down the whole of the establishment in contravention of S.O. 11A that will amount to unfair labour practice on the part of employer as contemplated under section 15(1)(I) of the I.R.O. 1969. Whatever the material has been placed on record it does not show that the respondents have taken any steps to close down the whole of the establishment and since no such act has been committed by the respondents so far as such whatever allegation contained in the main application will not make out a prima facie case of unfair labour practice on the part of respondents at least at this stage." ' I am in respectful agreement with the observations mentioned above and it has correctly interpreted S.O. 11A and S.15 (new S.63 of I.R.O. 2002). It is therefore now clear position of law that termination of more than 50% of the employees without permission of the Labour Court might be an illegal act but it cannot be construed to be an act of unfair labour practice. Accordingly I hold that termination of more than 50% of employees is not an act of unfair labour practice. This point is therefore answered accordingly. 17. Point No,IV. This is very cruCial and important point touching the very root of the case. Learned advocate for the respondents argued that Benches of the Commission have jurisdiction to prevent the occurrence of acts of unfair labour practice but where the acts of unfair labour practice have already been committed, the Bench ceases to have jurisdiction. In this connection he referred to Regulation 32 of N.I.R.C. (P&F) Regulations, 1973. It will be advantageous to reproduce Regulation 32 which reads as under:- "32. Manner of dealing with unfair labour practices.-(1) Where an unfair labour practice has been committed, and the case falls under section 25A, section 34 or section 53, as the case may be, the Commission may deal with the case under that section: ' Provided that the Commission while awarding punishment under section 53, may also direct the reinstatement of a worker and allow consequential benefits to him. (2) Where as case of unfair labour practice is likely to occur, the Commission may take the following measures, namely:-- (a) it may summon all or any of the persons connected with the case which is likely to occur, hereafter in this chapter referred to as the connected persons, hear them and hold such inquiry as it deems fit; (b) ascertain the factors which are likely to give rise to unfair labour practice;
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(c) advise, direct or prohibit all or any of the connected persons to do or refrain from doing any act or to conduct themselves or their affairs in a manner calculated to avoid occurrence of unfair labour practice; (d) reprimand or warn all or any of the connected persons that if they conduct themselves in improper way it would be deemed to be in furtherance of the commission of an offence punishable under section 53; and (e) initiate security proceedings in order to prevent the occurrence of an unfair labour practice. (3) Where a person whom the Commission has reprimanded or warned under sub-regulation commits an unfair labour practice, the Commission may consider, for the purpose of awarding punishment under section 53; the reprimand or warning as a circumstance aggravating the offence." ' From the above quoted Regulation he argued that first part relates to the acts of unfair labour practice which have already been committed and for that employees may be reinstated in service upon finding the employer guilty of acts of unfair labour practice and not otherwise while the second part relates to the commission of acts of apprehended unfair labour practice. To highlight his arguments the learned advocate for the respondents argued that services of employees were…
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