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Petitioner: CORN PAK LIMITED through Divisional Manager Personnel and Administration and others VS Respondent: CORN PAK EMPLOYEES' UNION through General Secretary and others
Court Name: National Industrial Relations Commission Judge(s): Ghulam Nauman Shaikh Title:CORN PAK LIMITED through Divisional Manager Personnel and
Administration and others vs CORN PAK EMPLOYEES' UNION through General Secretary and others Case No.:Cases Nos. 4A(03)/24(3), 4A(19)K/24(22)K, 4A(55)K/24(60)K, 4A(78)K/24(87)K and 7(11)K of 1997 Date of Judgment:1997-05-15 Reported As: 1998 PLC 403 Result: Order accordingly Judgment ORDER ' The above cases are inter connected and common questions of law and mixed questions of law and facts, hereinafter be referred have been raised. As such these cases are being disposed of by this common order. 2. Brief facts of above cases are that Corn Pak Limited is a public limited company engaged in the manufacture of glass tubing vial, ampules and tube lights. Originally it was named as Corning Glass Pakistan Limited and its name was changed as Corn Pak Limited in 1982. Corn Pak Employees Union in the establishment of Corn Pak Limited, was originally named as Corning Glass Employees Union by which name it was registered with the Registrar of Trade Unions, Karachi vide registration certificate dated 26-12-1969 under the Industrial Relations Ordinance, 1969, and due to change of name of the company name of the union was also changed as Corn Pak Employees' Union and was registered by the present name on 4-7-1982 with the Registrar of Trade ,Unions, Sindh Karachi. Corn Pak Employees union claims to be C.B.A. In the establishment of Corn Pak Limited on three fold grounds firstly provisional C.B.A. Certificate issued under subsection of section 22(1) of I.R.O. By Registrar of Trade Union, Sindh Karachi in its original name Corning Glass Employees Union on 15- 6-1976 being single registered trade union in the establishment at that time, secondly that one another union by name Corning Glass Workers' Union had come in existence thereafter and there was referendum held on 18-10-1976 between the Corning Glass Employees Union (now the Corn Pak Employees Union) and Corning Glass Workers Union by the Registrar of Trade Unions, Karachi
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as result whereof the Corning Glass Employees Union (now Corn Pak. Employees Union) succeeded in the referendum and then another provisional C.B.A. Certificate was issued to the Corn Pak Employees Union (Previously named as Corning Glass Employees Union) under subsection (2) of section 22 of the I.R.O., 1969 by the Registrar, Trade Unions, Karachi, which by passage of time due to change of office-bearers has been lost, thirdly by recognition and acceptance of Corn Pak Employees Union as C.B.A. By the management of Corn Pak Limited in pursuance of the settlements to have been executed by the management of Corn Pak Limited with Corn Pak Employees Union since last about 20 years. Corn Pak Limited has challenged the status of C.B.A. Of Corn Pak Employees Union and has categorically stated that Corn Pak Employees Union does not possess C.B.A. Certificate in prescribed form ' S' under Rule 31 of the Industrial Relations (Sindh) Rules, 1973 as such has no locas standi to represent the workers and the settlements so for executed earlier were on this misunderstanding and belief that the Corn Pak Employees Union must be in possession of C.B.A. Certificate as prescribed in form 'S' under Rule 31 of Industrial Relations (Sindh) Rules, 1973. This was due to good faith of Management of Corn Pak Limited and concealment of the fact by the Corn Pak Employees`Union that it does not possess C.B.A. Certificate as prescribed under the rules, and therefore their recognition or acceptance by the management of Corn Pak Limited in executing the settlements with the Union, will not automatically give the status of C.B.A. To Corn Pak Employees Union, because the registered trade union acquires the status of C.B.A. Only when if it is single union in the establishment, it is issued certificate of C.B.A. By the Registrar of Trade Unions as prescribed in form 'S' rule 31 of Industrial Relations (Sindh), 1973 under section 22(1) of the Industrial Relations Ordinance, 1969, and in case of more than one registered trade unions in the establishment, any of the registered trade union, as result of referendum held by the Registrar of Trade Union, succeeds, and is issued certificate of C.B.A. By the Registrar of Trade Unions in prescribed form 'S' of the rule 31. Of Industrial Relations (Sindh) Rules, 1973. 3. Dispute resulting in multiplicity of the litigation started between the parties from 1-1-1997 when the Corn Pak Employees Union served a notice under section 26(i) of the I.R.O., 1969 along with fresh charter of demands assuming that the Memorandum of settlement executed between the management and the union on 8-2-1995 is deemed to have expired on 31-12-1996. This notice gave cause of action to Corn Pak Limited, who filed the Application No,4A(3)/97 under section 22- A(8)(g) of I.R.O., 1969 read with Regulation 32(2)(c) of N.I.R.C. (P&F) Regulations, 1973, wherein the Corn Pak Limited took the stand that in terms of section 40(2) of I.R.O., 1969 a settlement continues to be binding on the party after expiry of period as agreed upon until the expiry of two months from the date on which either party informs to other party of its intention no longer to be bound by the settlement. Since neither the management nor the union has served notice of two months to terminate the settlement as is contemplated in terms of section 40(2) of the I.R.O., 1969, as such the settlement dated 8-2-1995 continues to remain in operation and binding on the parties. It was stated that there was apprehension that the union will serve strike notice no expiry of period of 10 days for bilateral negotiations and since the settlement dated 8-2-1995 continued to remain in operation and during the subsistence of settlement dated 8-2-1995 fresh charter of demand was served by the union on the Management of Corn Pak Limited and there was threat of strike, which will be illegal strike and an act of unfair labor practice as contemplated under section 46(1)(d) and section 16(1)(e) of I.R.O., 1969. In the petition the Corn Pak Limited also filed application under Regulation 32(2)(c) of N.I.R.C. (P&F) Regulation, 1973, supported by affidavit of Mr. S.H.A. Jazbi, Divisional Manager, Personnel and Administration and Notified Manager under the Factories Act, 1934, whereupon the then learned Member Mr. Muhammad Hussain Chaudhry on 16-1-1997 passed interim prohibitory orders restraining the Corn Pak Employees Union from giving effect to the demand notice/strike notice and not to adopt coercive measures to pressurize the management for acceptance of the demand. Mirza Saleem Baig, General Secretary of Corn Pak Employees' Union
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in his comments stated that the settlement dated 8-2-1995 expired its natural death on 21-12-1996 and notice under section 26(1) of I.R.O., 1969 dated 1-1-1997 alongwith charter of demands has been rightly and legally served on the management and that there is no need of notice of termination of settlement. 4. Application No, 4A(19)/97-K, under-section 22-A(8)(g) of I.R.O. 1969 read with section 15 of the I.R.O.,. 1909 was filed by Corn Pak Employees Union on 13-2-1997 stating therein that Corn Pak Employees Union is certified Collective Bargaining Agent in the establishment of M/s. Corn Pak Limited. In the past there had been periodical fluctuation in the business and demand and production of the manufactures but since the last budget of 1996 the said position has become tight. The management in an anticipation of submission of fresh charter of demands by the union after the expiry of the settlement dated 8-2-1995 planned to create such conditions that it could influence the union and workers for negotiating a deal for fresh settlement on dictated terms of low level in comparison to previous settlement and without taking the union into confidence terminated employment of 18 workers by issuing termination letters dated 26-11-1996 and terminated services of 20 workers by termination letters dated 3-12-1996 and there was further threat of removal of more workers of their employment. Although there was charter of demands served by both the parties on each other on 1-1-1997 under section 26(1) of I.R.O., 1969 without opening dialogues with the union the management with mala fide intention filed application bearing No,4A(3) of 1997 on 6-1-1997 before this Commission and got prohibitory order, restraining from giving effect to the demand notice of the union. The management also served a lock out notice dated 12-1-1997 in contravention of law. On this lock-out notice conciliation proceedings are being had by conciliator of East Division, Labour, Department. The management unofficially held the talks with the officers of the union on five dates and finally on 29-1-1997 desired the union to execute settlement for three years, on their dictated terms to 'Which the union declined as result whereof the management terminated services of 138 workers by letter dated 6-2-1997, which is illegal lock-out and is an act of unfair labour practice as contemplated under section 15(f) and (i) of the I.R.O., 1969. This has been done by the management to pressurize the union and intimidate the workers and compel the office-bearers of the union to accept their dictated terms to arrive at a settlement of their choice. In this petition application under Regulation 32(2)(c) of N.I.R.C. (P&F) Regulations, 1973, supported by affidavit of Mirza Saleem Baig, General Secretary of Corn Pak Employees Union was made and the then learned Member of the Commission Mr. Muhammad Hussain Chaudhry had passed interim prohibitory orders directing the management not to effect further retrenchment on any ground and not to pressurize the union to arrive on their own terms. Operation of notice of termination of 138 workers was also suspended. An application for vacation of stay and modification of the order dated 13-2-1Q97 was filed by Corn Pak Limited, whereupon by order dated 8-3-1997 the lea}ned Member Mr. Muhammad Hussain Chaudhry recalled his order dated 13-2-1997 in relation to suspension of order of termination of 138 retrenched workers and left open to these 138 workers to approach the Labour Court under section 25-A of the I.R.O., 1969. In this petition the comments with preliminary objections were filed by the Corn Pak Limited. According to them the termination of service of 138 workers is not a lock-out, as such it is not an act of unfair labour practice and the application filed by the Corn Pak Employees' Union is not maintainable. They stated that the union has not filed any certificate of C.B.A. And it cannot spouse the cause of individual workers, who have been terminated, for the reasons due to lack of demands, recession in the market, accumulation of the stock and tight financial position of the company, the management as reorganisation retrenched 18 workers on 26-11-1996, 20 workers on 3-12-1996 arid 138 workers with effect from 11-3-1997. Out of those 18 workers, 16 have taken their full and final- settlement other 20 also have taken their full and final settlement. The management in retrenchment of the workers has observed the principle of 'Last in and First out'.
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5. Application No, 4A(55)/97-K was filed by Corn Pak Limited under section 22-A(8)(g) of I.R.O., 1969 read with Regulation 32(2)(c) of N.I.R.C. (P & F) Regulations, 1973 stating therein that Corn Pak Employees' Union claims to be the C.B.A. But till this date it has failed to produce any certificate of C.B.A. Issued to them in prescribed form under Industrial Relations (Sindh) Rules, 1973 by Registrar of Trade Unions, Karachi. Corn Pak Employees Union had served charter of demands on the management on 1-1-1997 and the Corn Pak Limited, therefore, filed application No, 4A(03)197 and this Bench of the Commission restrained the Corn Pak Employees' Union from giving effect the charter of demands or pressurizing the management for the purpose of acceptance of their demands. During the pendency of aforesaid case the management addressed two letters to the Corn Pak Employees Union on 23-2-1997 and 27-2-1997 requesting them to provide management with a copy of certificate of C.B.A. Issued to them by the Registrar, Trade Unions, but till this date the Corn Pak Employees' Union has failed to produce certificate of C.B.A. Arguments were heard by the Honourable Member, N.I.R.C. In case No,4A(03)/97 filed by the management and 4A(19)/97-K filed by the Union and order was passed on 8-3-1997, wherein para. No,5 at page 5 the following observations were made: "I have given my careful consideration to the respective contentions of the parties. Admittedly no copy of the certificate of C.B.A. Has been placed on record nor the union have under-taken to do so. No doubt the decision of the High Court in K.P.. 193 of 1976 in the case of Pan Islamic Steamship Company v. Registrar of Sindh and that of Punjab Labour Appellate Tribunal NLR 1979 Lahore Appellate Tribunal 210 and decision of Mr. M.M. Peerzada the learned Member of this Commission, all are to the effect that the provisional certificate of C.B.A. Is invalid, I refrain from making any comments on this issue at this stage and keep the matter open to be decided at later stage. Similarly on the issue as to whether notice to terminate the service is required to be given in which specific period is provided for yet even on this issue I refrain from passing any order at this stage, as further legal assistance is required to meet the law at Bar cited on behalf of the company. ' That although the issue as to whether the union is C.B.A. Or otherwise and as to whether this union can serve fresh charter of demands in presence of earlier instrument not terminated in terms of section 40(2) of I.R.O., 1969, being subjudice before the Bench of the Commission in case No,4A(03)97, service of another charter of demand dated 12-3-1997 containing the same demands only changing the date from 1-1-1997 to 12-3-1997 and threat of strike by the union to pressurise the management to accept their demand, is an act of unfair labour practice on the part of Corn Pak Employees Union. Alongwith the main petition, Corn Pak Limited filed application under Regulation 32(2)(c) of N.I.R.C. (P&F) Regulations, 1973 supported by affidavit of Mr. S.H.A. Jazbi their Notified Manager under the Factories Act, 1934 and this Bench of Commission on 17-3-1997 passed the orders to issue notice to Corn Pak Employees Union for their objections on 20-3-1997. On 20-3-1997 Mr. S.P Lodhi, Representative for the Corn Pak Employees Union sought time to file objections on stay application, whereupon this Bench of Commission adjourned the case to 28-3-1997 and passed the orders that meanwhile status quo be maintained. On this petition the comments were filed by the Union that it is not legal requirement to produce C.B.A. Certificate issued by the Registrar of Trade Unions in prescribed form under Industrial Relations Ordinance, 1969 for filing the case by the union. The management had falsely raised the issue of C.B.A. As the union was registered in December, 1969 and it being only registered trade union was deemed to be C.B.A. And after amendment in law in 1975 it was certified to be C.B.A. On 10-6-1976, but on coming into existence of another registered Union namely, Corning Glass Workers Union, secret ballot was held by the -Registrar of Trade Unions on 18-10-76, and having secured more votes, the Corn Pak Employees Union was declared as C.B.A. And the management has never challenged the status of Corn Pak Employees Union as C.B.A. During the past 20 years. During this last 20 years several changes have been effected in the office-bearers of the union and also in the management so it
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has been difficult to trace out C.B.A. Certificate. The photocopy of the relevant documents are annexed as Annexures A to ZS. Corn Pak Limited by its own cannot conduct is estopped from raising the contention and to approbate and reprobate to suit to its own purpose. 6. Application No,4A(78)/97-K under section 22-A(8)(g) read with section 15 of the I.R.O., 1969 was filed by Corn Pak Employees Union on 8-4-1997 against M/s. Corn Pak Limited and M/s. Central Technology (Pvt.) Limited/stating therein that after expiry of settlement on 31-12-1996, the Corn Pak Employees Union as well as the management of Corn Pak Limited have served notice of charter of demands on each other under section 26(1) of the I.R.O., 1969 on 1-1-1997 and the management has issued notice of lock out on 12-1-1997. On the lock-out notice the proceedings are pendirig before the conciliator. Corn Pak Limited have filed application No,4A(03) 97, Corn Pak Employees Union has filed application 4A(19)97-K, Corn Pak Limited has filed Application 4A(55)/97-K and all these three applications are pending before this Bench of the Commission and the learned Member N.I.R.C. By his order dated 8-3-1997 passed in application 4A(03) of 1997 and 4A(19)/97-K has recalled his order dated 13-2-1997 whereby he had suspended the so-called letters of termination of employment of 138 workers. ' It has been alleged that Mr. S.H.A. Jazbi claiming to be Notified Manager under the Factories Act, 1934 is propagating and threatening to remaining about 300 workers of their removal from employment for the same reasons and grounds as shown in the lock-out notice, as such there is apprehension of removal of other workers as well which is an act of unfair labour practice on the part of Corn Pak Limited's management. M/s. Central Technology (Pvt) Limited is subsidiary/sister company of M/s. Corn Pak Limited and Mr. S.H.A. Jazbi is inducing and pursuading through his agents 138 locked out workers for their fresh employment in vial and ampule department on fresh terms in M/s. Central Technology (Pvt.) Limited. Along with the main petition Corn Pak Employees Union moved application under Regulation 32(2)(c) of N.I.R.C. (P&F) Regulations, 1973 supported by affidavit of Mirza Saleem Baig and this Bench of the Commission passed interim prohibitory order on 8-4-1997 restraining M/s. Corn Pak Limited from removing remaining workers from their employment or threatening them to be removed from the employment. Corn Pak Limited filed reply with preliminary legal objections that the Corn Pak Employees Union is not certified as C.B.A. As no C.B.A. Certificate in form 'S' under Rule 31 of Industrial Relations (Sindh) Rules, 1973 has been issued by the Registrar of Trade Unions to Corn Pak Employees Union. For all the time the Corn Pak Employees Union has been falsely representing to be C.B.A. Although having no certificate of C.B.A. In prescribed manner issued by Registrar Trade Unions. All the settlements in absence of certificate of C.B.A. Cannof be construed strictly as settlement within the meaning of section 2(XXIV) of I.R.O., 1969. Section 43 of I.R.O., 1969 specifically provides that no industrial dispute shall be deemed to exist unless it is raised in the prescribed manner by the C.B.A. All the previous settlements are therefore not legally binding or enforceable and the benefits obtained under these settlements are liable to be refunded by the union to the company. In law, after promulgation of the Industrial Relations (Sindh) Rules, 1973, there is no concept of recognition of union as C.B.A. Corn Pak Employees' Union has played fraud on the Corn Pak Limited by misrepresenting that it is certified C.B.A., although it does not possess the certificate of C.B.A. From the Registrar of Trade Unions in prescribed form ' S' under Rule 31 of Industrial Relations (Sindh) Rules, 1973. It is vehemently denied that any officer of Corn Pak Limited particularly S.H.A. Jazbi is propagating or threatening the remaining workers of their removal from service. Retrenchment or termination of service is legal right of the employer. Central Technology (Pvt.) Limited is separate legal entity, separately registered under the Companies Ordinance, 1984, separately registered under Factories Act, 1934, with separate Employees Old-Age Benefit No, and separate Social Security Number. Membership of the Corn Pak Employees Union also does not extend to M/s. Central Technology (Pvt.) Limited, which has separate membership in the Chambers of Commerce and Industries and is also
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separately registered under the Income-tax Department. It is denied that M/s- Central Technology (Pvt.) Limited is subsidiary of M/s. Corn Pak Limited. It is also denied that the management and supervisory officers of M/s. Corn Pak Limited perform duties in M/s. Central Technology (Pvt.) Limited: Corn Pak Limited is Public Limited Company, whereas Central Technology (Pvt.) Limited is private limited company. There is business agreement between Corn Pak Limited and M/s. Central Technology (Pvt.) Limited to supply technical information and services required by Central Technology (Pvt.) Limited, for which Corn Pak Ltd. Do charge. Premises of .Portion of Plot No, 11 are also leased out on rental basis by Corn Pak Limited to Central Technology (Pvt.) Limited. Other allegations of Corn Pak Employees' Union are also denied. It is stated that due to lack of demand, recession in the market, accumulation of stock, massive input cost increases availability of imported substitute at cheaper rates and tight financial position the Management of Corn Pak Limited decided to reorganize and retrench workers of vial and ampule department on payment of one month salary in lieu of notice. Reply and legal objections were also filed by M/s. Central Technology (Pvt.) Limited, stating that it is separate entity. It is separately registered under Factories Act, 1934, under Employees Old Benefits Institution, under Social Security Institution, under Income Tax Department, under Chambers of Commerce and Industries, under Sales Tax, and it is operating vier separate manufacturing license and has its own premises and boundary verified and approved by Central Excise and relevant registration certificate has been filed. It is stated that there is separate Manager notified under the Factories Act, 1934 and the work has been given to independent contractor, who has control and supervision over the workers and the contractor pay them the salary. None of their employees are members of Corn Pak Employees' Union, as such the Corn Pak Employees' Union has no locus standi to file the case against Central Technology (Pvt.) Limited. All other allegations of Corn Pak Employees' Union have been denied. - 7. Besides above four cases two filed by the management of Corn Pak Limited and two filed by the Corn Pak Employees' Union, complaint under section 22-C(a) of the I.R.O., 1969 was filed by Mirza Saleem Baig, General Secretary of the Union on 19-2-1997 for violation of the prohibitory orders dated 13-2-1997 by the 'learned Member of this Commission. In this contempt Mr. Vazir Hussain Qureshi, Managing Director and Mr. S.H.A. Jazbi, Manager Personnel and Administration have been made as accused. Mr. Mehmood Abdul Ghani, Advocate for accused in this complaint filed application on 14-3-1997 that the learned Member N.I.R.C. Vide his order dated 8-3-1997 has recalled order dated 13-2-1997 in relation to 138 workers and in the same order the learned Member of the Commission has disposed of this complaint as the notice for contempt earlier issued by this Commission has been recalled. 8. Since all the cases were being heard together as common issue of law and mixed issue of facts and law are involved on 1-4-1997 Mr. S.P. Lodhi; Representative of Corn Pak Employees Union moved an application to summon Registrar of Trade Unions. On his application Mirza Jahangir Azar Baig, Joint Director Labour dealing with the Trade Unions was examined on 3-5-1997 as witness of Corn Pak Employees Union and he was cross-examined by Mr. Mehmood A. Ghani, Advocate for Corn Pak Limited. On behalf of Corn Pak Limited S.H.A. Jazbi, Divisional Manager Personnel and Administration and Notified Manager under the Factories Act, 1934 filed his affidavit-in-evidence and he was cross-examined by Mr..S.P. Lodhi, Representative for the union on 5-5-1997. 9. Along with application moved on 1-4-1997 Mr. S.P. Lodhi representative for Corn Pak Employees Union also placed on record the photo copy of the documents. 10. I have heard the arguments of Mr. S.P. Lodhi, the learned representative for Corn Pak Employees Union and Mr. Mehmood Abdul Ghani, the learned Advocate for Corn Pak Limited and have gone through evidence of Mr. Jahangir Azar, Joint Director Labour examined by the Corn Pak Employees Union and S.H.A. Jazbi examined by the Corn Pak Limited and the documents produced by the Corn Pak Employees Union and the Corn Pak Limited and the case-law cited by them.
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11. Following are the three points, which are to be determined; as has been raised in all…
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