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Petitioner: ALLIED BANK OF PAKISTAN LTD. AND 2 ANOTHER VS Respondent: LABOUR APPELLATE JUDGMENT
Court Name: Lahore High Court Judge(s): C.A. Rahman Title:ALLIED BANK OF PAKISTAN LTD. AND 2 ANOTHER vs LABOUR APPELLATE
JUDGMENT
Reported As: 1982 PLC 1 Result: Petition allowed Judgment JUDGMENT ' The relevant facts giving rise to the present writ petition are that on 31st March, 1979 Allied Bank of Pakistan Limited, Zonal Office, Sahiwal, issued Circular No. ZO/MAM/32 to the managers of its branches in the zone intimating them that in view of the decision taken by the Central Office, Karachi promotion of clerical staff to officers cadre and typists and steno-typists to steno-typists and stenographers respectively should be made after conducting written test and interview of the eligible employees. The above circular was issued, in view of the instructions conveyed by the Pakistan Banking Council to the Presidents of all nationalized banks vide its letter No. MAF. 37/178/78 dated 15th April, 1978 (copy Annexure B). Pakistan Banking Council was required to convey the aforementioned instructions by the Ministry of Finance, Government of Pakistan vide letter No. 259- 1F. XI/78 dated 5th April, 1978 (copy Annexure A). Secretary Staff Union Registered, Allied Bank of Pakistan Limited, Sahiwal Zone, Headquarters, Okara respondent No.. 3 took exception to the aforementioned circular as according to him the condition of holding of test and interview for promotion of employees imposed by the circular was illegal being inconsistent with paragraph 237 of the report of the Wage Commission which provided that promotion should be made on the basis of experience, length of service and overall performance of an employee. Respondent No. 3 accordingly asked Allied Bank of Pakistan Limited, Zonal Office, Sahiwal, to withdraw the aforementioned circular and promote the employees without holding any test and interview. As no attention was paid to his request, respondent No. 3, filed an application under section 34 of the Industrial Relations Ordinance, 1969 (hereinafter to be referred as the Ordinance) in the Punjab Labour Court No. 9, Multan, respondent No. 2 against Allied Bank of Pakistan Limited through
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Assistant Vice President, Allied Bank of Pakistan Limited, Sahiwal Zone praying for a declaration that the circular issued by Allied Bank of Pakistan Limited, Zonal Office, Sahiwal, on 31st March, 1979 as referred to above, was illegal in so far as it imposed the condition of holding of test and interview for promotion of the employees. It was further prayed that a direction be issued to Allied Bank of Pakistan Limited to promote the employees without any test and interview in accordance with the provisions of paragraph 237 of the report of the Wage Commission. 2. Allied Bank of Pakistan Limited contested the application filed by respondent No. 3 inter alia on the grounds that the application was not maintainable under section 34 of the Ordinance ; that respondent No. 3 had no locus standi to file the application ; that the impugned ,circular was not illegal as it had been issued in pursuance of the policy directives of the Pakistan Banking Council and the Federal Government and that it was not inconsistent with paragraph 237 of the report of the Wage Commission as the said paragraph did not prohibit an employer from holding test and interview for judging the experience, overall performance and efficiency of an employee before allowing him promotion. 3. Punjab Labour Court. No. 9, Multan, respondent No. 2 however, did not accept the above contentions of Allied Bank of Pakistan Limited as vide its order dated 6th February, 1980 it found that the application filed by respondent No. 3 under section 34 of the Ordinance was maintainable ; that respondent No. 3 had locus standi to file application against Allied Bank of Pakistan Limited and that the condition of holding of test and interview imposed by the bank was illegal and unjustified and that the employees were entitled to be promoted on the basis of criteria laid down by the Wage Commission in paragraph 237 of the report for 1974-75. 4. Allied Bank of Pakistan Limited challenged the aforementioned order passed by respondent No. 2 in appeal before the Labour Appellate Tribunal, respondent No. 1 but without success as the appeal was dismissed on 11th January, 1981. 5. Allied Bank of Pakistan Limited through Vice-President, Allied Bank of Pakistan Limited, Personnel Division Central Office, Karachi (petitioner No. 1) and the Assistant Vice-President, Allied Bank of Pakistan Limited, Sahiwal, who had represented Allied Bank of Pakistan Limited before respondents Nos. 1 and 2 have filed the present writ petition challenging order dated 6th February, 1980 passed by the Punjab Labour Court No. 9, Multan, respondent No. 2, as affirmed in appeal by the Labour Appellate Tribunal, Lahore respondent No. 1 vide order dated 11th January, 1981 whereby petitioner No. 1 has been directed to follow the criteria laid down in para. 237 of the report of the Wage Commission for 1974-75 in the matter of promotion of their employees inter alia on the grounds that respondents Nos. 1 and 2 have failed to consider that paragraph 237 of the Report of the first Wage Commission was applicable only to workmen and not to officers and that on the expiry of period of three years during which the aforementioned paragraph was operative, the Federal Government vide its letter dated 5th April, 1978 had introduced a uniform policy of promotion of employees of Banks on the basis of recommendations of the Pay Commission ; that the application filed by respondent No. 3 under section 34 of the Ordinance was not maintainable as the Staff Union was not competent to take up the case of an individual workman under section 34 of the Ordinance and that respondents Nos. 1 and 2 had misinterpreted paragraph 237 of the Report of the Wage Commission inasmuch as the said paragraph did not guarantee any right of promotion to an employee as it merely laid down criteria for promotion of employees to the higher posts. 6. In addition to the usual prayer made by the petitioners in their writ petition that the impugned orders passed by respondents Nos. 1 and 2 be declared without lawful authority, the petitioners by filing a petition for amendment of the writ petition, have prayed that penal action being taken by respondent No. 2 for the alleged violation of an injunction order issued by respondent No. 2 during the pendency of the application of respondent No. 3 as also under sections 54 and 55 of the
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Ordinance be declared as without jurisdiction and without lawful authority and that respondent No. 2 be restrained from proceeding with the complaint filed by respondent No. 3 against the Senior Executive Vice-President and Assistant Vice-Presidents of petitioner No. 1. 7. Respondent No. 3 has contested the writ petition and has also opposed the petitioners' prayer for declaring the penal action being taken by respondent No. 2 under sections 54 and 55 of the Ordinance and for violating the injunction order by the Officers of petitioner No. 1 as illegal and without jurisdiction. 8. On 5th May, 1981 when the petitioners' application for suspension of the implementation of the impugned orders passed by respondents Nos. 1 and 2 came up for hearing, learned counsel for the petitioners proposed that instead of hearing arguments in the petitioners' aforementioned application, arguments in the main case be heard as it would avoid repetition of arguments and save the Court's time in the disposal of the case because the arguments in the application would also touch the merits of the case. Learned counsel for respondent No. 3 accepted the above proposal and so the parties counsel were allowed to argue the main case. 9. In order to explain the background and true import of the recommendations made by the Wage Commission in its first Report for 1974-75, learned counsel for the petitioners referred to the resolution dated 28th May, 1974, where by the Government of Pakistan decided to appoint a Pay Commission for Banks and financial institutions to examine inter alia the existing salary structure and all other types of allowances, amenities and facilities etc. Admissible to all categories of staff and employees in the nationalized banks and to make a recommendation on the need, if any, and the manner in which the existing salary structure and other emolument and the terms and conditions governing them should be rationalized or otherwise modified. He also referred to the questionnaire issued by the Pay Commission on 25th July, 1974. Attention was particularly drawn by the learned counsel to the following questions which were relevant for the present case : (11) What criteria are followed at the present in the matter of promotion of an employee from a lower to a higher appointment ? (12) What criteria should be applied for making promotion from clerical cadre to officers' cadre ? Should the promotion be made on seniority cum-fitness or on a qualifying examination and performance ? ' Learned counsel pointed out that before the Pay Commission could conclude its task, on 7th November, 1974 Government of Pakistan notified the constitution of a Wage Commission under subsection (1) of section 38-A of the Ordinance in respect of workers of the banks which had vested in the Federal Government and of certain other financial institutions. The personnel notified for the Commission were the same who had been nominated for the Pay Commission. The Wage Commission was required to fix rates of wages and determine all other terms and conditions of service in accordance with the provisions of the Ordinance in respect of the workers of Banks and other financial institutions as contemplated by subsection (1) of section 38-A of the Ordinance. After collecting necessary data and interviewing the representatives of Unions and Federations, the Wage Commission prepared its report which was submitted to the Government on 12th May, 1975. The Pay Commission also formulated its recommendations and submitted the same in the form of a report to the Government. According to the learned counsel for the petitioners it was in pursuance of the recommendations made by the Pay Commission that the Government decided to introduce a uniform promotion policy for clerical staff/Officers and executives of the nationalized commercial Banks. The above decision was communicated to the Pakistan Banking Council by the Government vide letter dated 5th April, 1978 (copy Annexure A). After receiving the above communication from the Government, the Pakistan Banking Council issued policy directive to the Presidents of all nationalized Banks on 15th April, 1978 vide letter No. MAF/37/178/78 (copy Annexure
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B). On receipt of instructions from the Central Office, petitioner No. 2 on behalf of Allied Bank of Pakistan Limited, Sahiwal, issued circular dated 31st March, 1979 which was challenged by respondent No. 3 before the Labour Court. Learned counsel for the petitioners contended that the aforementioned circular could not be challenged as being illegal because it was issued by petitioner No. 2 to implement Pakistan Banking Council's policy directive which was based on the decision taken by the Government on the recommendations of Pay Commission. The circular in questions was not inconsistent with para. 237 of the Report of the Wage Commission because the criteria of promotion laid down in paragraph 237 did not exclude the holding of test and interview by the employer for determining the fitness and suitability of an employee for promotion. Moreover, paragraph 237 did not deal with all categories of the staff of petitioner No. 1 because the list of workers supplied to the Wage Commission by petitioner No. 1 as given at Serial No. 6 in Annexure-III of the Report was only in respect of clerical staff and non-clerical staff. The term 'employee' used in paragraph 237 could not be interpreted in general sense, because the Wage Commission had jurisdiction to fix rates of wages and determine all other terms and conditions of service in respect of workers of Banks, lists of which were supplied to the Wage Commission as shown in Annexure-III of the report. According to the learned counsel for the petitioners paragraph 237 of the report did not lay down any specific criteria for the promotion of workers of Banks. On the other hand paragraph 237 only stated broad principles to be kept in view by the employer while considering the case of promotions of workers. It did not contain any prohibition for holding a test and interview for judging the fitness and suitability of a worker for promotion. Learned counsel referred to paragraph 228 of the Report to show that the principle of competing for appointment to higher grade was recognised even by the Commission. Thus if the employer was to hold a test and interview in order to judge the suitability of a worker for promotion it could not be said that he was violating paragraph 237 of the report. 10. Learned counsel for the petitioners further contended that paragraph 237 gave wider discretion to the employer in the matter of promotion of the workers as seniority-cum-fitness was not the only criterion in such cases. According to the learned counsel the employer was the sole judge in the matter as was evident from paragraph 237 of the report which clearly recognised the right of employer to make appointments both by direct recruitment and by promotion at his discretion. Learned counsel for the petitioners pointed out that no employee could claim promotion as of right and in that connection he referred to the decision of the Supreme Court in Syed Abdul Qadir Shah v, The Government of Punjab (1) where it was held that prospects of promotion could not be included in conditions of service nor the same could be enforced by invoking constitutional jurisdiction of the High Court. In support {{FOOT NOTE}} (1) 1972 SCM R 323 {{FOOT NOTE}} ' of his contention that the employer was the sole Judge in the matter of promotion of an employee, he referred to the Supreme Court's decision in Muhammad Abdul Abdullah v. The Province of East Pakistan (I) where it was held that so far as suitability for promotion to a particular post was concerned, the sole Judge was the Government (employer) and the Courts were unable to interfere except possibly in a case of proved mala fide. 11. Learned counsel for the petitioners further submitted that the view expressed by the learned Appellate Tribunal that by holding test and interview the possibility of showing favour and disfavour to a particular individual could not be excluded was not correct because there was greater scope for showing favour to a particular person if the promotions were to be made on the basis of seniority-cum-fitness. According to the learned counsel mere length of service of an employee was not a proper criterion to be considered in matter of promotion because the employer was
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more concerned with the fitness and capability of the employee to perform his functions at the higher post than the length of his service. In this connection he referred to the following passage from the Introduction to the Study of Public Administration by Leonard D. White which was relied upon by the Supreme Court of India, while examining the question whether promotion to selection grade post could be claimed merely on the basis of ranking in the gradation list in the case of Sant Ram Sharma v. State of Rajasthan and others (2) "The principal object of a promotion system is to secure the best possible incumbents for the higher positions, while maintaining the morale of the whole organization. The main interest to be served is the public interest not the personal interest of members of the official group concerned. The public interest is best secured when reasonable opportunities for promotion exist for all qualified employees, when really superior civil servants are enabled to move as rapid up the promotion ladder as their merits deserve and as vacancies occur and where selection for promotion is made on sole basis of merit. For the merit system ought to apply as specifically in making promotions as in original recruitment. ' Employees often prefer the rule of seniority by which the eligible longest in service is automatically awarded the promotion. Within limits, seniority is entitled to consideration as one criterion of selection. It tends to eliminate favouritism or the suspicion thereof, and experience is certainly a factor in the making of a successful employee. Seniority is given most weight in promotions from the lowest to other subordinate positions. As employees move up the ladder of responsibility, it is entitled to less and less weight. When seniority is made the sole determining factor, at that level, it is a dangerous guide. It does not follow that the employee longest in service in a particular grade is best suited for promotion to a higher grade ; the very opposite may be true." 12. Learned counsel for the petitioners also referred to the judgment of the Supreme Court of India in the case of N. S. Mehta and others v. Union of India and others (3) where it was held that rule prescribing typing test for clerks for promotion to higher grade was neither {{FOOT NOTE}} (1) PLD 1960 SC 164 (2) AIR 1967 SC 1910 (3) AIR 1977 $ C 1673 {{FOOT NOTE}} ' unreasonable nor violated Article 14 or 16 of the Indian 'Constitution which provided safeguard against discrimination. Reliance was also placed by the learned counsel on the judgment of our own Supreme Court in Ast Ali v. Pakistan Railways Lahore and others (1) where the petitioner, who was called upon to appear in an ability test and on his refusal to do so was refused promotion had challenged the imposition of condition of ability test as illegal, it was held that ability test which the petitioner had refused to undergo was not such an imposition which could not be provided under law and the refusal of the concerned authorities to promote the petitioner without going through the ability test could not be considered illegal. It was also observed that there could be several methods of discovering the fitness or otherwise of a person to hold a certain post and the holding of an ability test could certainly be one of these methods. 13. Summing up the arguments, learned counsel for the petitioners stated that the circular issued by petitioner No. 2 prescribing test and interview for promotion of its workers to higher posts was neither illegal nor unjust because the above procedure not only provided equal opportunity to all the eligible workers but also enabled the employer to judge fitness and suitability of the workers for promotion. The above-mentioned circular did not violate the broad principles of promotion embodied in paragraph 237 of the Report of the Wage Commission, for bolding of test and interview, was one of the methods by which the fitness of an employee for promotion could be judged and there was nothing in paragraph 237 which precluded the employer from following the above method. Respondent No. 3 could not have any grievance against the method selected by
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petitioner No. 2 for judging the fitness and suitability of a worker for promotion especially when it was one of the well-recognised methods for the purpose and also because no one could claim promotion as of right. 14. Learned counsel for the petitioners also questioned the jurisdiction of respondent No. 2 to entertain the application filed by respondent No. 3 under section 34 of the Ordinance. According to the learned counsel the report of the Wage Commission was not an award within the meaning of section 2(0 of the Ordinance and as such respondent No. 2 bad no jurisdiction to enforce it under section 34 of the Ordinance. The Report of the Wage Commission was an award of the Full Bench of the National Industrial Relations Commission by virtue of section 38-D of the Ordinance and it could be enforced by the said Commission alone and not by respondent No. 2 in view of the provisions of subsection (II) of section 22-A of the Ordinance. Learned counsel for the petitioners argued that even if it were to be assumed that the Labour Court had jurisdiction to enforce the award of the Wage Commission, respondent No. 3 was not competent to move the Labour Court for enforcement of the award in the present case as it was a case of individual grievance and only those workers whose rights were adversely affected by the impugned circular were entitled to seek redress under section 25-A of the Ordinance. 15. As regards the penal action initiated by respondent No. 3 against petitioner No. 2 and other officers of petitioner No. 1 for violating injunction order passed by respondent No. 2 during the pendency of the application filed by respondent No. 3 under section 34 of the Ordinance, {{FOOT NOTE}} (1) 1980 SCM R 11 {{FOOT NOTE}} ' learned counsel for the petitioner contended that the injunction order was not operative after 29th May, 1979 as it had not been extended by respondent No. 2 after the said date. Petitioner No. 2 and the other Officers of petitioner No. 1 against whom complaint was filed by respondent No. 3 had not violated any injunction order as the promotions were made on the basis of test and interview on 4th July, 1979, when no injunction order was in operation. Learned counsel referred to order dated 26th April, 1979 passed by respondent No. 2 when the case was adjourned to 29th May, 1979 with a direction that till that date status quo shall be maintained. On 29th May, 1979 there was no Presiding Officer of Punjab Labour Court No. 9, Multan, and as such the case was adjourned by the Reader to 25th June, 1979 for further proceedings. As no new Presiding Officer of the Court had been appointed even by 25th June, 1979, the case was adjourned sine die by the Reader of the Court. It was evident from the aforementioned orders that the injunction order passed by the Court was operative only till 29th May, 1979 as it was not extended after the said date. Since petitioner No. 2 and other officers of petitioner No. 1 had not committed breach of any term of the award of the Wage Commission, they were not liable for any penal action under section 54 of the Ordinance. Similarly no penal action could be taken against them under section 55 of the Ordinance as the operation of the order passed by respondent No. 2 was suspended by the Appellate Tribunal respondent No. 1 in appeal and the order passed by the Appellate Tribunal on 11th January, 1981 dismissing the petitioners"- appeal was suspended by this Court on a petition submitted by them along' with the writ petition. 16. Learned counsel for respondent No. 3 supported the impugned order passed by respondents Nos. 1 and 2 as according to him circular dated 31st March, 1979 issued by petitioner No. 2 was manifestly inconsistent with paragraph 237 of the Report of the Wage Commission. He submitted that the policy directive issued by the Pakistan Banking Council from which justification was being sought by petitioner No. 2 for issuing the impugned circular could not affect the rights of the workers of petitioner No. 1 because the recommendations made by the Pay Commission on the basis of which Government of Pakistan had issued letter dated 5th April, 1978 (Copy Annexure 'A')
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were not applicable to the workers of the nationalized banks. According to the learned counsel Wage Commission alone was legally competent to determine the terms and conditions of the service of the workers and that the criteria for promotion of workers as stated in paragraph 237 of its Report could not be changed by petitioners on the basis of letter dated 15th April, 1978 (Copy Annexure 17. Learned counsel for respondent No. 3 pointed out that the Wage Commission was aware that promotion of employees of Banks on the basis of test and interview was not acceptable to the employees and it was for that reason that out of two alternatives indicated in question No. 12 of the questionnaire for the promotion from clerical grade to officer grade, the Wage Commission had discarded the alternative that promotion should be based on a qualifying examination and performance. It was, therefore, not possible to accept the argument that promotion on the basis of test and interview as proposed in the impugned circular by petitioner No. 2 was not inconsistent with the recommendation of the Wage Commission as contained in paragraph 237. In this connection learned counsel for respondent No. 3 referred to the decision of the Punjab Labour Appellate Tribunal in the case of Iftikhar Ahmad and another v. Senior Vice-President, V. P. Personnel Division, Karachi and another (1) where it was held that the direction issued by the respondent-Bank requiring employees to take part in the test and interview before being considered for promotion was inconsistent with paragraph…
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