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Official Citation: 2025 SHC 266
Court / Jurisdiction: Sindh High Court
Year of Decision: 2025
Decision Date: 2025-02-04
Parties: Engro Fertilizer Limited vs Ful Bench of NIRC & others
Ruling Summary: This decision was rendered by the Sindh High Court on 2025-02-04, officially reported as 2025 SHC 266. In this matter between Engro Fertilizer Limited and Ful Bench of NIRC & others, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
Case cited as 2025SHC266
Court Name: Sindh High Court Judge(s): Adnan-ul-Karim Memon, Muhammad Abdur Rahman Title: Engro Fertilizer Limited vs Ful Bench of NIRC & others Case No.: Constitutional Petition No. D-288, D-289, D-290 of 2024 Date of Judgment:2025-02-04 Reported As: 2025 SHC 266 Result: Petition Dismissed
JUDGMENT
JUDGMENT Adnan-ul-Karim Memon, J; All captioned petitions, sharing common legal and factual issues, need to be disposed of through this single judgment. 2. The case of the petitioner company is that the petitioner company, a fertilizer manufacturer with operations across Sindh and Punjab, conducted a review to improve efficiency and resource allocation. This led to organizational restructuring to enhance career growth and adapt to upgraded production processes, this involved abolishing Group "F" (60 employees) and promoting Group "G" (56 employees). Four employees from Group "G" accepted voluntary separation schemes. As per the company, the private respondents cannot object to these agreed-upon changes under the guise of unfair labor practices as such three grievance Petitions were filed before a Single Bench of the National Industrial Relations Commission, (NIRC), including by Respondents 3 & 4 in C.P. No. D-288 of 2024, challenging a completed promotion. Despite this challenge, Respondents 3 & 4 were already serving in the promoted roles and receiving corresponding salaries. Notice was issued on the main grievance petition and stay application. The petitioner company filed preliminary legal objections, with a reply statement and counter affidavit, along with an application for a hearing. Evidence was led by both parties. Respondents 3 and 4 also testified. Qurban Ali, Deputy Manager of Industrial Relations, authorized by the Board of Directors of the petitioner company was examined. The parties presented their evidence and a uments w- heard. The learned Single Bench of NIRC allowed the grievance petitions vide imp ned order dated 20-09-2023. The Petitioner company filed appeals No. 12A(08)/2023S, 12A(09)/2023S, and 12A(10)/2021-S, before the 11 Bench of NIRC challenging orders dated 20-09-2023 issued by the
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learned Single Member of NIRC in grievance cases No. 413(28)/21-S and 4B(29)/21-S. However, these appeals were dismissed by the Full Bench of NIRC via an impugned order dated 25-01-2024, and as per the petitioner company, which misread and misapplied the evidence and ignored settled law, thus are liable to be set aside. 3. learned counsel for the petitioner-company argued that no grievance notices, which is condition precedent under section 33(1) ibid have been served by respondents No 3 & 4 upon the petitioner company; he emphasized that respondents 3 & 4 admitted during cross-examination that they failed to serve a grievance notice upon the petitioner, which was outside the scope of Section 33 of Industrial Relations Act (IRA 2012). This renders the grievance petitions non-maintainable. Per learned counsel, the grievance petitions were/are not maintainable under Section 33 of the IRA 2012 as this section allows grievance petitions only for enforcing rights guaranteed under 'law,' award,' or 'settlement.' Per learned counsel, the grievance petition is only valid if it relates to a right guaranteed by law, settlement, or award. He added that even if the private respondents are considered workmen, their grievance does not fall under any legally guaranteed right. Learned counsel argued that respondents 3 & 4 accepted their promoted salaries and positions, implying acquiescence. This conduct renders the grievance petition inadmissible due to acquiescence and the law of estoppel. He emphasized that respondents 3 & 4 admitted during cross-examination that Engro Fertilizers management reclassified them from Grade F to management grade P-6. Per learned counsel, the NIRC erred in stating that the petitioner failed to produce job descriptions, though job descriptions were filed as an employee cannot insist on remaining in their current role and refuse a promotion. Learned counsel next argued that the petitioner company reviewed operations to optimize costs and ensure a sustainable manufacturing process for the company, this involved analyzing resource allocation, deployment, and utilization, along with process efficiency and effectiveness. Per learned counsel, to shape career growth and drive efficiency, the petitioner company restructured its organization, this aimed to create an agile and skilled workforce equipped to manage upgraded production processes. Learned further added that respondents 3 & 4 were performing supervisory and managerial duties as their primary function. This included responsibilities like hiring, promotion, demotion, transfers, discipline, and determining employee requirements. He pointed out that manual work, if any, was ancillary, after promotion, respondents 3 & 4 received benefits in the management cadre, as such they cannot file grievance petitions before the NIRC as these included increased salary, 12 air tickets per year, access to the management Club and School, enhanced end-of-service benefits (including rovident fund), and improved medical coverage. Per learned counsel, their last pay slips show gross salaries of Rs.407,169/- and Rs.634,575/- respectively, this includes benefits in the management cadre and an inflation increment. He argued that the Single Bench of NIRC erred in Para 7 by failing to determine, how the promoted posts became vacant (freshly created, retirement, promotion, etc.). Per learned counsel, the parties previously agreed to a Memorandum of Understanding (MoU) for the period January 1, 2021, to December 31, 2022, which became part of the Memorandum of Settlement. This MoU contains Section 3 outlining the agreed-upon terms. He submitted that promotion is an agreed right, covered by the settlement agreement. Per learned counsel, the respondents cannot object to agreed provisions, especially under the guise of unfair labor practices based on promotion posts. He further argued that the settlements between the employer and CBA are binding on dissenting workers. Learned counsel submitted that respondents No. 3 & 4 during their cross-examination admitted that the MoU dated 05.10.2021 attached with Affidavit in Evidence signed between management and union from 01.01.2021 to 31.12.2022; He referred to clause I of the MoU contains rights of CBU (CBA) union and management. He argued that the NIRC's finding that workers can forego promotions and that the settlement lacks provisions for promotion beyond Grade F strongly suggests that Grade F is the terminal point in the workers' grade structure. He
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added that promotion is not an unfair labor practice, as such, the grievances petitions lack specific instances of unfair labor practice and were/are, therefore, not maintainable; that the Single Bench of NIRC erred in finding that the promotion was malicious and intended to suppress union activities. Learned counsel argued that there is no legal requirement for consent or consultation for promotion as promotion from Grade C to F is permissible under the CBA. Per learned counsel promotion to P-6 (Management Cadre) is valid as promotion is not based on malice or dissatisfaction. Besides transfer is a normal part of employment. Since Engro Fertilizers Ltd. is the proper legal entity such a Grievance Petition filed without following proper procedure was/is not maintainable. A petition filed by a provincially registered union for a trans-provincial establishment is not maintainable. On the question of concurrent findings of facts and law by the NIRC, he argued that concurrent findings can be overturned if based on the application of incorrect law. Petitioner's affidavit in evidence was not challenged, creating a presumption of its acceptance. He argued that since there is no specific law regarding promotion in the Standing Orders, and promotion is not a guaranteed right, the grievance petition ought to have been dismissed in terms of the ratio of the judgments rendered in the cases of Liaquat Ali v. Managing Director Sui Northern Gas Pipelines Ltd, 2009 PLC 79 is irrelevant to the current grievance petition. In support of his contention he relied upon the cass of Karachi Pipe Mills employees Union Karachi v Karachi Pipe Mills Ltd Karachi 1992 SCMR 36, Liaquat Ali v M/s Sindh Labour Appellate Tribunal Karachi & others 1993 PLC 109, Munnawar Hussain v MCB Ltd. PLJ 2006 Lahore 1130, Zar Khan v Senior Vice President, Muslim Commercial Bank Ltd. & others 1984 PLC 89, The Area Manager MERCK Sharp and Dhome of Pakistan Ltd and others v The Chairman First Labour Court East Pakistan & others 1971 PLC 406, Syed Muhammad Hussain v Pakistan Tobacco Co Ltd and others PLD 1980 SC 80, Allied Bank of Pakistan Workers Union v Allied Bank Ltd, Employees Union & others 2006 PLC 308, PESCO WAPDA House v Ishfaq Khan & others 2021 PLC 148, PIA Corporation v Syed Suleman Alam Rizvi & others 2015 SCMR 1545, Mukhtar Ali v Pakistan Railways and others 2005 PLC 166, LE Saleh v Messers International Laboratories Ltd PLD 1975 Karachi 279, unreported order passed in Civil Appeals No. 481 of 2017 & 913 and 914 of 2020 passed by Supreme Court of Pakistan and another unreported order in Civil Petition No. 34 of 2022 passed on 30.01.2024, Muslim Commercial Bank Limited v Rizwan Ali Khan and others 2024 SCMR 360, United Bank Limited v Jamil Ahmed and others 2024 PLC 50, Muhammad Shafi @ Kuddoo v The State 2019 SCMR 1045, Utility Store Corporation of Pakistan Limited v Punjab Labour Appellate Tribunal & others PLD 1987 SC 447, Muhammad Nawaz v Member Judicial Board and others 2014 SCMR 914, Muslim Commercial Bank Ltd v Muhammad Riaz Jutt NLR 2010 109 and Muhammad Akhtar v Manna 2000 SCMR 974. He lastly prayed for allowing the instant petitions by dismissing the grievance petitions filed by the private respondents. 4. Mr. Jamshed Ahmed Faiz, advocate for respondents No. 3 and 4 in C.P. No. 289 of 2024, referred to the objections filed by the respondents and argued that on September 20, 2023, the NIRC set aside an order dated October 5, 2021, that forcibly converted the private respondents from their technical Grade-F positions to lower-ranked management positions (P-6). He further submitted that the respondents were improperly treated by the petitioner company just to knock them out of service so that they may not be able to file a grievance petition against the highhandedness of the management of the petitioner company. As per counsel, this treatment violates a 2021 Memorandum of Settlement that does not allow for such conversions from workmen to management cadre positions. He further argued that their Grade-F positions are the highest in their technical field within the petitioner company, however, the petitioner company acted arbitrarily and against labor laws by reducing their salaries and forcibly converting them just to knock them out of the category of the workman to create a ground to remove them from services, therefore they were compelled to approach NIRC to have October 5, 2021, the order passed by the
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management set aside with the declaratio hat their forced conversion was/is unlawful and illegal and an injunction order ereventing the petitioner company from further implementing the order dated October 5, 2021. He further argued that the settlement agreement dated 01-01-2021, being statutory, only includes payscale A and F, for workmen and the Memorandum of Settlement dated 01-01-2021 does not include any provision for converting technical employees into non-technical roles. He emphasized that on October 5, 2021, the respondents were forcibly converted to Grade P- 6 (Senior Plant Operator) from Grade F. This contradicts the Memorandum of Settlement, which classifies Senior Operator as Grade E. The petitioner company's classification also deems the management grade (P-6) inferior to the respondent's previous position in Grade F. Moreover, the Memorandum of Settlement lacks any procedure for converting Grade-F employees into the management cadre. The intention of the petitioner company, through the impugned promotion/conversion order, was/is to remove them from service with malafide intentions. He further contended that the present petitions are not maintainable, as NIRC (National Industrial Relations Commission) has rendered concurrent findings of fact, which cannot be challenged through writ jurisdiction. On the point of service of grievance notices, upon the petitioner company, he argued that earlier one of the respondents filed grievance petitions under Section 54(e) of the IRA, 2012, seeking an injunction against the petitioner company from altering their employment status. The Single Member NIRC Sukkur dismissed the grievance petitions, ruling that section 54(e) did not apply to individual grievances. The Single Member directed the respondents to invoke Section 33 of the IRA, 2012, for individual grievances after exhausting internal grievance procedures by serving the petitioner company. They supported the impugned orders passed by the learned NIRCs. He concluded by praying for the dismissal of the captioned petitions. 5. Mr. Jaffar Ali Shah represents respondents 2 to 4 in C.P. No. 289/2024 and Mr. Abdul Hafeez Irfan represents respondent 3 in C.P. No. D-289/2024 has adopted the arguments of counsel for respondents 3 and 4 in C.P No. 288 of 2024. 6. At this stage counsel for the petitioner company by exercising the right of rebuttal submitted that the respondents' claims were previously dismissed by NIRC, and they cannot re-litigate the same issue (estoppel and res judicata). He added that the company restructured to improve efficiency and reduce costs, including offering VSS (which the respondents declined). He argued that there is no legal right to promotion under the relevant labor law (Industrial and Commercial Employment (Standing Orders) Ordinance, 1968). As the respondents are now in management positions, they are no longer covered by the Standing Orders; that the petitioner company has the right to promote employees under the existing Memorandum of Settlement. He lastly submitted that the respondents accepted the promotion and are currently working and receiving a salary in the promoted position. 7. We have heard the learned counsel for the parties and perused the record with their assistance and case law cited at the bar. 8. Petitioner Engro Fertilizers Limited company calls the orders dated 25.01.2024 passed in Appeal No.12A (09)12023-S by Full Bench of NIRC'/Respondent No.1 and on 20.09.2023 in Case No.4B(30)/2021-S by /Single bench of NIRC. The reasoning of the learned full bench of the NIRC is that the petitioner company retains all management rights, including the right to direct and control its workforce. This includes hiring, promoting, demoting, transferring, disciplining, discharging employees, and determining staffing needs. In the petitioner company position classifications exist from Grade A to Grade F, which outline pay rights with grades ranging from A to F. Upon reaching the maximum salary within a grade, a salary revision may be considered. However, the Memorandum of Settlement lacks provisions for promotions beyond Grade F, suggesting that Grade F likely marks the highest attainable grade for workers, with potential advancement into officer positions thereafter. It was further observed that the petitioner's counsel failed to provide
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information on the company's profile when questioned by the NIRC Bench. Additionally, he could not provide evidence regarding the abolishment of Grade F, including any settlement agreement with the CBA, relevant orders, or notifications. This demonstrated a lack of preparedness on his part. The petitioner company claimed that all employees in Grade F either accepted a promotion or filed grievances. effectively ending the grade. That factum lacked documentation for the grade's abolishment. While he showed a salary increase with the promotion to P-6, he couldn't provide salary data for other employee classes to compare inflation-related raises. The petitioner company had the right to decline promotion, and no worker can be compelled to accept it. It was further observed that the petitioner's counsel failed to demonstrate any misinterpretation of evidence by the Single Member of NIRC to justify the Full Bench's intervention. Consequently, all three appeals filed by the petitioner company were dismissed as meritless. 9. The questions involved in the present proceeding, for determination, are whether the petitioner company can convert the status of the respondents/workman to officer category by promoting them to P-6 groups and whether a grievance petition can be filed under section 33 of the Industrial Relations Act 2012, based on unfair labour practice. 10. There is no dispute that petitioner company vide order dated 05.10.2021 promoted the private respondents from Grade F to P-6 management cadre, however, that romotion has been objected by the respondents leading to filling of grivence petitions before NIRC, on the premise that this arrangement was/is against their desire and consent. 11. This issue has been addressed by the learned single bench of NIRC on the premise that the respondents' conversion/promotion order dated 05.10.2020 was invalid due to salary reduction and no overtime as these are significant detriments in the converted position. Besides petitioner company failed to provide clarity on the new role as the origin of the vacancies remains unexplained. Additionally, the "P-6" position was/is not recognized in the Management Cadre. Lastly, the conversion was/is a punitive measure against trade union activities. Thus the grievance petition was allowed, and the order dated 05.10.2020 was set aside. An excerpt whereof reads as under:- " I have heard the arguments of the learned counsel for both parties and perused the record. It is very strange that petitioners' salaries are decreased in a conversion/promotion position, it is also worth mentioning that overtime is also not allowed in the above-said conversion) position, moreover, the respondents failed to produce job description of the converted/promoted position. The respondents were unable to explain how the converted/promotion post became vacant, or whether these posts were freshly created or they became vacant due to the retirement or promotion of incumbents. According to the Memorandum of Settlement, the last top position or grade is F-Grade and there is no mention of the P-6 position in the Management Cadre. Moreover, the petitioners never wanted this position and they are not availing the perks and privileges of the P-6 is a self created position to punish the employees, and they should not take part in trade unionism. The employees that they should not take part in trade unionism. The employees, that they should not take part in trade unionism. The conversion/promotion of the petitioners was based on malafide intention of the respondents to deprive the petitioners of the status of workmen, in fact, they wanted to curtail/restrain their trade union activities. Therefore, the instant petition is allowed and the order dated 05.10.202 is set aside, with no order as cost. File be consigned to record room. 12. The full bench of NIRC endorsed the findings of the single bench of NIRC vide order dated 25.01.2024 on the following premise:- "5. The learned counsel for the appellant while arguing his case submitted and reiterated in his arguments all the facts which he reiterated at the time of submission of written reply. On the other hand, learned counsel for the respondents supported the impugned order and requested that all
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three appeals be dismissed. While going through the Memorandum of Settlement in Section 3 the respondent as well as the Employee Union agree on the following: "The company retains all rights of management resulting from ownership of the Company and pertaining to the operation of business. These rights shall include (a) the right to direct and control the workforce i.e. Among others the right to hire, promote, demote, transfer, discipline, discharge, to create to discontinue, or reclassibr jobs, to determine the number of employees needed" and the Memorandum of Settlement is also attached with position classification and starting from Grade-A, Grade B, Grade-C, Grae-D, Grade-E, and Grade-F. The rights of pay as per Section 6 is also mentioned in the attached ATTACHMENT 'A'. The pay group starts from Gr,. A and ends at Grade F and i f a worker reaches on sealing of his grade basic salary the sealing may be considered for revision. Nowhere in the Memorandum of Settlement, it is permitted that the worker class to reach Grade how will be promoted it means at the gradation of the workers class comes to an end at Grade F and probably onward in officer class. However, when during the arguments we posed a question to the learned counsel for the appellant to appraise about the agrogram of the company he could not satisfy the Bench in this respect. Moreover, when he was asked whether Grade F is abolished whether there is any agreement of Settlement reached between the CB And the company in this respect, and whether any order/notification has been made in respect of abolishing Grade F he was unable to bring any letter show his ignorance in this respect. Though he pleaded that the total strength in Grade F is 60, 04 out of 60 opted for VSS 48 accepted promotion and the remaining 8 filed grievance petitions, and thus the whole group came to an end. He is unable to show any document about the abolishment of Grade F, he also provided the breakdown in this respect of the salary the petitioner used to receive in Grade F and will receive in P-6 and pleaded that their salary is not reduced but rather enhanced. However, when he was asked that the raise in the salary due the inflation would also be received by the workers class of the company as well as the officer class, he was unable to show us the salary of both classes. 6. Admittedly the petitioners had the right to forgo their promotion and no worker can be forced for promotion. Moreover, the learned counsel for the appellant failed to point out any misreading and non-reading of documentary evidence by the learned Single Member to warrant the interference of this Bench, therefore, all the above-mentioned three appeals around meritless stand were dismissed. No order as to cost. The file be consigned to the record room after due completion." 13. Keeping in view the above factual as well as legal findings, in such circumstances, the High Court has the power only to issue a writ of certiorari to review NIRC decisions based on a misreading of evidence or jurisdiction error; as the scope of judicial review of the decisions as discussed supra is limited. This court generally does not interfere with concurrent findings of fact unless there's evidence of Jurisdictional errors, errors of law, manifest injustice, and violation of principles of natural justice which factum is missing in the present case. 14. On the issue of concurrent findings, if both a single bench and a full bench of the NIRC have reached the same conclusion on a matter of fact, it carries significant weight then the High Court will be hesitant to overturn these findings unless there's a strong case for one of the exceptions mentioned above as the high court is not the appellate court in the matter in dispute against concurrent findings. Coming to the proposition so forward by the petitioner company that the issue of promotion in a company cannot potentially be agitated in the National Industrial Relations Commission (NIRC) based on unfair labor practice. The concept of unfair labor practice refers to actions by employers or employees that interfere with, restrain, or coerce employees in the exercise of their rights. These rights may include the right to organize, bargain collectively, or engage in other concerted activities for mutual aid or protection. Promotion may he considered a right if it is explicitly stated in
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a collective bargaining agreement or company policy. If the employer denies promotion based on discriminatory or retaliatory motives, it could be considered an unfair labor practice. For unfair labor practices based on promotion denial, the parties need to present evidence that the decision of the company was based on discriminatory factors such as race, gender, religion, union membership, or protected activities. Retaliation for engaging in union activities or filing grievances could also be considered an unfair labor practice. In such circumstances, the NIRC will investigate the complaint and conduct a hearing to determine the merits of the case. If the NIRC finds that the employer engaged in unfair labor practices, it may order remedies such as reinstatement, back pay, or…
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