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Petitioner: MESSRS.ARAG INDUSTRIES LTD. VS Respondent: HABIB TEXTILE MILLS LABOUR UNION
Court Name: Labour Appellate Tribunal Judge(s): Z. A. Channa Title: MESSRS.ARAG INDUSTRIES LTD. vs HABIB TEXTILE MILLS LABOUR UNION Case No.: Appeals Nos. KAR-564 of 1980 Date of Judgment:1982-04-20 Reported As: 1983 PLC 74 Result: Appeal dismissed
Judgment ORDER This is an appeal under section 37 (3) of the 1. R. O., and 2 suo motu revisions under subsection (3- a) of section 38, I. R. O., 1969, which have been heard together and are being disposed of by one order as they are interconnected. 2. Appeal No. KAR-564/80; had been filed by the Arag Industries Ltd. (Habib Textile Division) (herein referred to as the company). It is directed against the order of the learned IIIrd Labour Court, made on 15th July, 1980, on an application by the Habib Textile Labour Union, under section 34, I. R. O., praying for a direction to the company to pay to all their workmen full salaries/wages and other allowances from 31st August, 1976 upto date and also to withdraw the unlawful lay-of to which it had resorted to with effect from the aforesaid date. By the impugned order, the learned Labour Court has held that the workmen of the company are entitled to the full salaries/wages and other allowances admissible under the law for the period "commencing from 31st August, 1976 upto, date, as claimed by their workmen's union. 3. The 2 revisions are in respect of an appellate order made by the learned IIIrd Labour Court on 25th November, 1980 upon 2 separate appeals filed by the workmen's union challenging orders of the Registrar of the Trade Unions. The first appeal impugned the order of the Registrar, Trade Unions, dated 7th August,. 1980 cancelling the registra--tion of the Habib Textile Mills Labour Union. The said order reads as follows :- "In exercise of powers conferred on me under subsection (8) of t, section 10 of Industrial Relations Ordinance, 1969, and after ,_. Necessary enquiry, 1, S. M. Muthar, Registrar of Trade Unions"4x` Sind,
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Karachi hereby cancel the registration of Habib Textile' Mills Labour Union, bearing its Registration No. 923 as the same has ceased to exist. Sd/- 5th August, 1980 S. M. Muthar, Registrar of Trade Unions Sind Karachi 4. The second appeal by the workers' union impugned the order of the Registrar, Trade Unions dated 28th August, 1980, refusing to register the change of office-bearers of the Union on the ground that the registration of the said Union had been cancelled by the order, dated 5/7th August, 1980. 5. The company, apart from the Habib Textile Division, which was running the Habib Textile Mills, has 3 subsidiaries, namely, (1) Albert David (Pak.) Ltd. Dacca (Bangladesh), (2) Dentogene Laboratories Ltd., Karachi, and (3) English Biscuit Manufacturers Ltd., Karachi. From time to time, the company has been making huge advances to its subsidiaries. It appears that on account of the separation of the former East Wing of Pakistan from the rest of the country, the Albert David (Pak.) Ltd., Dacca, suffered huge losses and the advances made to it by the company, amounting to about Rs. 60 lakhs had to be written of. This loss, together with the slump in the textile industries in Pakistan placed considerable strain on the company and hence an application was made by the company to the Labour Court in 1974 for permission to close down the Habib Textile Mills. The permission sought. However, was rejected by the Labour Court by its order, dated 4th February, 1976. On 31st August, 1976, the Karachi Electric Supply Corporation, which had earlier on 21st October, 1976, served a legal notice on the company for non payment of electricity charges, amounting to Rs. 12,48,598.69, disconnected the service connection to the company on account of the failure of the company to pay the aforesaid charges. The company accordingly resorted to lay-of from the said date in the Habib Textile Mills. The lay-of has continued upto today and the mills have not resumed production or staled working again. The workers' union, ,61 through their General Secretary, served a notice upon the company calling upon it to lift the illegal lay-of, allow the workers to resume work and to pay them full wages, As the demands of the workers' union were met, it filed an application under section 34, 1. R. O. Before the learned Labour Court on 17th March, 1977. While the said application eras pending adjudication before the learned Labour Court , 3 separate applications for wages were made to the authority for payment of wages The first application was made by 81 workmen of the company claiming wages for the period from 16th September, 1976 amounting to Rs. 3,76,166.13. The second application to the payment of Wages Authority was for an amount of Rs. 74,072.82 and vas made jointly by 14 workers of the Habib Textile Mills. The third application to the Authority was for an amount of Rs. 1,61,626.77 and was made by 28 of the workmen of the Habib Textile Mills The company resisted these 3 applications, which were jointly heard by the Payment of Wages Authority, on the main ground that the competent forum, namely, the Labour Court, was already dealing with the question of the legality of the lay-of and without the decision of the learned Labour Court on the said issue, the payment of Wages Authority could not grant any relief to the workmen This plea was overruled and the Authority under the Payment of Wages Act, by its Order, dated 14th September, 1978, allowed the 3 applications filed by the workmen and directed the company to deposit a sum of Rs. 6,11,865.72 for payment to the workmen. The company challenged the aforesaid orders through a Constitutional petition before
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the. High Court, but the Constitutional Petition was dismissed by the Judgment, dated 20th June, 1979. The High Court took the view that the lay of by the company was unlawful as it was not occasioned by any catastrophe or other calamity beyond the control of the company. It also repelled the contention of the company that the Authority under the Payment of Wages Act was not competent to award wages/remuneration for the period of lay-of. The company went up in appeal against the decision of the High Court to the Supreme Court, which while refusing to grant leave to appeal to the company, observed that the company still had ample chance to seek redress through the Labour Appellate Tribunal before whom the proceed--ings in appeal are pending in respect of the application by the workers' union under section 34,1. R. O. And it was for the Tribunal to decide upon the validity and legality of the lay-of. 6. After the decision of the Authority under the Payment of Wages Act, op 14th September, 1978, and during the pendency of the proceedings before the High Court, the Supreme Court, the Labour Court and this Tribunal several important developments in the case took place of which It is necessary to take due notice. The first such development was that on 10th May, 1979 a memorandum of settlement was arrived at between the company and the workers' union, through the good offices of the Director Labour Welfare, Joint Director. Labour Welfare, and the Conciliator and Assistant Director (Conciliation). The most outstanding terms of this settlement were that service? Of all the workmen/employees of the company, who were on the rolls of the company on 31st August, 1976, were deemed to have been validly terminated on 28th February, 1977 and/ or the workers were deemed to have resigned with effect from 28th February, 1973, that annual leave due upto 28th February, 1977 to each of the workmen was to be converted into cash and raid to the individual workman alongwith gratuity and other entitlements ; that the workers' union on behalf of the workmen had waived the rights of the workers for notice pay and other dues which according to them were payable under the law and in lieu thereof the company agreed that in case of resumption of work in their Textile Division, it shall invite the present workers and offer them an opportunity of re-employment ; and that the company undertake to separately make payments under the settlement from 2nd January, 1979 and all payments were to be completed to the workers entitled to the same within 30 days after 2nd January, 1974. It was specifically provided in the settlement that if the payment was not begun or was not completed by the date stated in the settlement, the settlement was to be void and neither that collective bargaining agent nor the workmen were to be bound by the provisions of the settlement. It is an admitted position that neither the payment was begun nor was it completed by the respective dates specified in the settlement. In any case, the settle--ment was neither produced nor relied upon in the proceedings before the High Court, the Supreme Court or the Labour Court 7. The second circumstance of importance is the order of the Registrar, Trade Unions, who is also the Director Labour Welfare, dated 5/7th August, 1980, cancelling the registration of the workers' union on A basis of the settlement arrived at on 10th May, 1979, according to which the services of all the workmen in the company deemed to have been validly terminated on 28th February, 1977. As already indicated, this order of the Registrar, Trade Unions was challenged by way of appeal to the Labour Court by the workers' union and the learned Labour Court by its order, dated 25th November, 1980, has set aside the said order and restored the registration of the workers' union. 8. The third circumstance worthy of notice is that on 15th August, 1980, 8 days after the order by the Registrar, Trade Unions, cancelling the registration of the Habib Textile Mills Labour Union, an election was held in the said union, wherein new office-bearers were elected. The new General Secretary by his letter, dated 20th August, 1980 communicated the names of the newly-elected office-bearers of the union to the Registrar, Trade Unions for registration in accordance with the provisions of section 8(4), I. R. O. The Registrar, however, by his order, dated 28th August, 1980,
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refused to register the change of the office-bearers on the ground that the registration of the workers' union had been cancelled by him ride order, dated 20th August, 1980. The workers' union preferred an appeal against the said order to the Labour Court which has directed the Registrar, Trade Unions, to register the change of office-bearers on the grounds firstly, that the workers' union had not ceased to exist and the services of the workmen of the company had not been terminated and that further no notice was given to workers' union before passing of the impugned orders. 9. The last but not the least circumstance of importance which is to be taken into consideration is that during the pendency of the appeal and the 2 Revisions before this Tribunal proceedings have been initiated in the High Court by the P. I. C. I. C : which is one of the creditors of the company, for the compulsory winding of the company and the High Court has appointed the Nazir of the High Court as official liquidator with the directions to take over the assets of the company. The Nazir of the High Court, accordingly, has proceeded with the appeal before this Tribunal under the directions of the High Court. 10. 1 have heard Mr. H. A. Jafri, who appeared for the company/ official liquidator and Messers Ali Amjad and Shafiq Qureshi, Advocate, who represented the workers' union and the workers. I have also heard Mr. Ghulam Qadir, Labour Officer who appeared for the` Registrar, Trade Unions. Mr. Jafri assailed the impugned order of the learned Labour Court, dated 15th July, 1980, on the application made by the workers' union under section 34, I. R. O. ; on the following grounds :- (i) The application under section 34 by the workers' union is not maintainable as it asks for determination of rights, which is beyond the scope of section 34, I. R. O. (ii) The application is further not maintainable as it seeks to enforce and determine the rights of the workers which is beyond the scope of section 34, I. R. O. (i.e) The settlement, dated 10th May, 1974 according to which the services of all the workmen were validly terminated with effect from 28th February, 19:7 is a complete bar to the maintainability Pf the application and the proceedings under section 34. (iv) The lay-of resorted to by the management was due to causes beyond its control and was, therefore, valid. I will proceed to examine each of the above contention seriatem. 11. In respect of his first contention, it was submitted by Mr. Jafri that the scope of section 34, I. R. O. Is limited to the enforcement of rights guaranteed or secured to the collective bargaining agent of the employer under any law, award or settlement and cannot be availed of for the purposes of determining what those rights are. The learned counsel argued that since the workers' union disputed the very right of the company, in the circumstances, to resort to lay-of with effect from 31st August, 1976, and the validity and otherwise of lay-of was still to be determined, no question arose of the enforcement of the claim of the workers' union for the payment of wages during the period of the disputed lay-of. In support of his contention, the learned counsel relied upon for decision of a Division Bench of the Karachi High Court in the case of Muhammad Agil v. Chairman Sind Labour Appellate Tribunal (1974 PLC 194). In that case it was observed by their Lordships of the High Court that section 34 merely provides for enforcement of pre-existing rights and not for determi--nation or adjudication of rights between the parties. In the instant case no question arises about the determination or adjudication of rights. The workers' union has filed an application claiming that the lay-ff was no in accordance with law and, therefore, the workmen are entitled to full wages. It was, therefore, basically seeking enforcement of its rights an not determination or adjudication of its rights, though the enforcement of the rights claimed or, behalf of the workmen would also involve an examination of the question what those rights were under the law. If lay-- of is held to be valid the workmen would be entitled to the rights confer-- red by Standing Order 11. On the other hand, if the lay-of is found to be in violation of the said Standiub order the workers would be entitled to wages for the period of illegal lay-of. In either case, the claim of the workers' union is
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for the enforcement or a right under the law and not for the adjudication or determination of the rights. 12. It next falls to be determined' whether the application under section 34 by the workers' union is for the enforcement of its rights or merely for the enforcement of rights of individual workmen and, there--fore, beyond the scope of section 34, 1. R. O. It was submitted by Mr. Jafri that out of a total number of 1829 workers employed by the appellant company, as many as 1738 had personally collected their dues and there remained only about 91 workmen who are agitating for their dues. He claimed that even in respect of these 91 workmen, their full dues were deposited with the Payment of Wages Authority on 31st July, 1981, and some of these 91 workmen had been paid their dues before this Tribunal and had accepted final payment receipts. The application of the workers' union, however, was not in respect of any particular workmen but was in respect of the workers jointly and it was for the enforcement of their rights to receive wages during the long period of the illegal lay-of resorted .To by the management on 3rd August, 1976 and continued upto date. In order to determine the exact connotation of the phrase "rights guaranteed or secured to it under any law or any award or settlement", as appearing in section 34, and whether the said phrase would cover the collective rights of the workmen, it will be useful not only to refer to the various authorities on the point but also to the legislative history of the section. The section as it was originally enacted, conferred the right to apply to the Labour Court only on a party to an industrial dispute relating to a matter arising out of a guaran--teed right. It read as follows :- "Any party to an industrial dispute relating to a matter arising out of any right guaranteed or secured to an employer or workmen by or under any law for the tune being in force or an award or settlement may apply to the Labour Court for adjudication of the dispute." 13. By Ordinance XIX of 1970, the above section was substituted by a new section which reads as follows "Application to Labour Court.--Any collective bargaining agent or any employer or workmen may apply to the Labour Court for the enforcement of, any right guaranteed or secured to it or him by or under any law or any award or settlement." 14. By Act XXIX of 1973, the words "or workmen" were omitted from the above section in view of the procedure for redress of individual grievances provided in section 25-A, which was added by Ordinance IX of 1972. The present position, therefore, is that only the C. B. A. Or the employer. Can file a petition under section 34, I. R. O. And further more, such petition must be in respect of a right guaranteed or secured to the C. B. A. Or tile employer under any law, award or settlement. 15. I will now proceed to refer to the authorities cited before me on the scope of the substituted section 34, 1. R. O. The earliest autho--rity in this behalf is a decision of my learned predecessor in the case of Farooki Flour & General Mills Ltd. v. Farooki Flour & General Mills' Union1976P LC453The facts of that case were that the services of 11 workmen of the Farooki Flour & General Mills, some of whom were office-bearers of the union, were terminated. The workers' union challenged the ter-- mination of services orders through an application under section 34, I. R. O. Alleging that the termination orders have been passed against the workmen because of the trade union activities and constituted not only an illegal lockout but an unfair labour practice. The Labour Court
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came to the conclusion that there was a lockout and the workers were victimized for their union activities. In appeal to this Tribunal, it was contended on behalf of the Farooki Flour and General Mills that the application by the workers' union was riot competent and could only be made by the workers whose services were terminated. It may be mentioned that the services of the workmen were terminated before the substituted section 34 as amended by Act XXIX of 1973 by deleting the words "or workman". The contentions made on behalf of Farooki Flour Mills pre--vailed with my learned predecessor who was of opinion that the above amendment in section 34 supported the view that section 34 was inapplicable to cases of individual workmen.' 'It was further observed in that case that there was clear distinction between representation and espousing the cause through an application in a Court of law. 16. In the subsequent case of Workers' Union v. Metropolitan Steel Corporation Ltd., Karachi (1975 PLC 230), the question which arose for determination before my learned predecessor was whether the workers' union under section 34, 1. R. O. Could espouse the cause of an individual workmen who had resigned. Reiterating his earlier view that section 34, I. R. O. Was inapplicable to cases of individual workman, my learned predecessor observed as follows: - "one thing is very clear from section 34 of the Ordinance that the Collective Bargaining Agent can apply to the Labour Court for enforcement of any right guaranteed or secured to it. If a narrow interpretation is given to section 34 of the Ordinance, the Collective Bargaining Agent can apply to the Labour Court only in respect of any right that may be guaranteed or secured to it under any law or any award or settlement. In other words, it cannot apply to the Labour Court in respect of any right that may be guaranteed or secured to any workmen under any law or any award or settle--ment. There are certain rights which have been specifically guaranteed to the Collective Bargaining Agent. If there is any violation of any of those rights the Collective Bargaining Agent would be entitled to make an application under section 34 of the Ordinance. I am, however, inclined to give a wider interpretation to the word "it" occurring in section 34 of the Ordinance, reproduced above. 1 would hold that the Collective Bargaining Agent can be said to have a guaranteed right to espouse the cause of the workers as a whole, but not an individual workman." 17. The next authority to which I would like to refer is reported as Sooraj Ghee Industries Ltd. v. President Sooraj Ghee Workers' Union (1979 PLC 45). This is a decision by the Punjab Labour Appellate Tribunal in that case, the workers' union filed an application under section 34, I. R. O. Praying that the company be restrained from creating impedi--ments against the union end from dismissing or punishing worker Ahmad Ali or other members of the union. It was held by the Punjab Labour Appellate Tribunal that although the union could represent the interest of its constituent members but it could only espouse the cause of the workers as a whole and not of an individual worker. 113. A somewhat different and narrower view of the scope of section 34, I. R. O. Was taken by a learned Single Judge of the Karachi High Court in the case reported as Sind Alkalies Ltd. v. Workers' Union (PLD 1979 Kar, 473). In that case, the workers union in the Sind Alikalies Ltd., sought to enforce right of the workers for the payment of overtime wages admis--sible under section 47 of the Factories Act by means of an application under section 34, I. R. O., 1969. It was held by the Learned Single Judge that the application by the workers' union was not maintainable and ire gave the following reasons in support of the view taken by him : "Section 34 speaks of the enforcement of the rights guaranteed or secured to any collective bargaining agent or any employer as indi--cated by the words "IT or HIM" occurring in the section
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whereas section 25-A talks of the enforcibility of the rights of the workers, and the rights, which are enforceable under either of the sections, must be such as are guaranteed or secured under "any law or any award of settlement." To interpret that the right secured to the workers can also be enforced by taking recourse to section 34, would result in rendering subsections (2), (3) and (4) of section 25-A, nugatory and would allow the workers to bypass the pro--cedure and the period of limitation laid down in the said sub-sec--tions. It is, therefore, clear that such an interpretation is not permissible at all and the remedies provided under sections 34 and 25-A of the Ordinance independently enure respectively to the benefit of the unions and the workers for the enforcement of their personal rights. The rights enforcible by a collective bargaining agent under section 34 are those mentioned in sections 3 (c) (d), 14, 17, 18, 20, 21, 22, 23 (a), 23(b), 24(2), 26, 30, 34(a) and 37 of the Ordinance only, while the remedy of the workers for the redress of their grievance lies under section 25-A of the Ordinance." 19. A few days before the above case was decided another Single Judge of the High Court took an altogether different view of the scope of section 34, I. P.. O., in the case reported as Chamber of Commerce & Industries, Karachi v. Presiding Officer, Sind Labour Court 111 (PLD 1979 Lah. 189). In that case, a Labour Curt on an application made to it by the workers' union under section 34, 1. R. O., directed the Chamber of Commerce & Industries Karachi to pay statutory bonus to the workmen employed by it. In the Constitutional Petition filed by the Chamber of Commerce & Industries, the decision of the Labour Court was sought to be challenged on the ground that section 34 could not be resorted to for enforcing the rights of workmen as distinct from the right of the C. B. A. Itself. Rejecting this contention, the learned Judge observed as follows :- "The learned Advocate for the petitioners has, in addition, challenge the maintainability of the application made by the union by relying on section 34 of the Industrial Relations Ordinance." It is con--tended that this section can be pressed into service only for the enforcement of any right that is guaranteed or secured to the collective bargaining agent by or under any law or any award or settlement. The argument is sought to be expanded by stressing that $ right to collect bonus vested only in the workmen and not in the collective bargaining agent so that the application under section 34 was not maintainable at the instance of the union. This argument is equally misconceived. By a reference to clause (b) in subsection (12) of section 2m,…
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