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Appeals Nos. KAR‑507 and 508 of 1979, heard on 3rd March, 1980.

--------S. 47(1) (b) read with West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance (VI of 1968), S. O. 12(3)‑ Retrenchment due to re‑organisation‑Termination simpliciter- During pendency of industrial dispute‑Does not amount to alteration of conditions of service‑Does not attract provisions of S. 47 of Industrial Relations Ordinance, 1969‑[Salem Shevapet S. Y. Bank v. Krishan (1959) 2 L L J 797 held not applicable].

Pakistan Petroleum Workers' Federation v. Burmah Shell Oil Storage & Distributing Company of Pakistan P L D 1961 S C 479 ; Zeal Pak. Cement Factory Ltd. v. Chairman, West Pakistan Industrial Court 1965 P L C 216 ; Saifee Development Corporation Ltd. v. Inamur Rehman 1969 P L C 402 and Karachi Industrial Corporation v. Muhammad Saeed 1969 P L C 574 rel.

Salem Shevapet S. V. Bank v. Krishan (1959) 2 L L J 797 held not applicable.

Mohini Sugar Mills v. Hassan (1962) L L J 389 and Manu v. Aspinwal & Co. (1973) I L L J 212 rel.

---S. 12(3) read with Industrial Relations Ordinance (XXIII of 1969), S. 25‑A‑Termination of service in consequence of bona fide re organistation‑Permissible‑Workman entitled to grievance petition before Labour Court if aggrieved‑Labour Court competent to go into, facts to ascertain bona fides of re‑organisation and to ensure that purported re‑organisation was genuine and not used merely as a cloak to get rid of an unwanted worker‑Re-organisation designed to affect specific workman as against a category of workmen‑Can not be considered genuine or bona fide specially when such re‑organisa tibn neither results in improved .efficiency nor affects economy -Office‑bearers (two) of Trade Union employed as time keepers -Total posts of time keepers 4 and reduced to 2 knowingly that by such retrenchment both important office‑bearers would be affected- Factory working in 3 shifts‑Remaining two time keepers doing over time‑Re‑organisation made neither achieving better efficiency nor affecting economy‑Jobs offered to both retrenched workers involving considerable loss in status and social position‑Circumstances indicative of keenness of Management to get rid of their services‑Re‑organisation, in circumstances, held, mala fide and workers affected, held, rightly awarded re‑instatement.

Malhotra on Law of Industrial Disputes, Vol. I, Second Edn., pp. 840‑841 rel.

Naeemuddin v. The Sind Labour Court No. IV 1979 P L C 59 ref.

Mahmood A. Ghani for. Appellant.

Ali Amjad for Respondents.

Date of hearing : 3rd March, 1980.

The two respondents herein, Mohammad Hanif and Ch. Abdul Khalique, who were employed by the appellant‑Company as time‑keeping clerks, were discharged from service with effect from 12‑2‑1977, on the ground of reorganization. They challenged the termination of their service before the learned Second Labour Court on the grounds, firstly, that they had been victimized due to their Trade Union activities, secondly, that they were discharged during the pendency of an industrial dispute, contrary to the provisions of section 47, I. R. O., and lastly, that there was in fact no re organization in the appellant‑Company and it was a false plea taken by it to get rid of their services. The appellant‑Company resisted the grievance petitions of the respondents on the grounds that due to re‑organization the two respondents, who were the junior most tame‑keeping clerks, were rendered surplus and hence they were offered alternate jobs of Assistant Operator and packing boy respectively, without change in their emoluments; but as they refused to accept these posts, their services had reluctantly to be terminated. The appellant‑Company strongly denied that the services of the two respondents had been terminated due to their Trade Union activities and further asserted that a settlement had been reached with the Trade Union in the appellant‑Company on 26‑5‑1977. The learned Labour Court, on the basis of the admitted position that though the appellant‑Company was working in three shifts there were presently only two time‑keeping clerks, who were accordingly required to regularly work over time, was of the view that the alleged re‑organization was only, a pretext to do away with the services of the two respondents, and accordingly set aside the orders of their termination of service and directed the appellant‑Company to re‑instate them in service with back benefits. Aggrieved by this order the appellant‑Company has filed separate appeals in respect of both respondents. This order will dispose of both the appeals.

2. Mr. Mahmood Ghani, the learned Representative of the appellant-Company, has assailed the decision of the learned Labour Court on several counts. It was submitted by him that the industrial dispute gun the respondents had been withdrawn and thus had ceased to exist before the services of the respondents had been terminated and hence the provisions of section 47, I.R.O. were not attracted. Elaborating his arguments, he submitted that the appellant‑Company itself had raised an industrial dispute by serving a demand notice, dated 10‑12‑1976, upon the General Secretary of the Corning Glass Union. One of the demands was for the reduction of two time keepers on the basis of seniority. However, according to Mr. Mahmood Ghani this demand was given up by the appellant‑Company before the services of the respondents were terminated and the dispute in respect thereof had thus ceased to exist. In support of this contention Mr. Mahmood Ghani placed reliance upon the letter dated 9‑2‑1977, said to have been sent by the appellant‑Company to the General Secretary of the Workers' Union, with a copy to the Assistant Director, Conciliation, stating that as the demand relating to the reduction of two time keepers was rot an industrial dispute, it was being withdrawn. This letter was produced before the Labour Court by Sirajuddin Ahmad, the Labour Officer in the appellant‑Company: The letter, however, was neither signed nor despatched by him. Subjectively, Manager Personnel and Administration in the appellant- Company, by whom it was signed was not examined. Tariq Majik Usmani, the General Secretary of the Workers' Union, by whom it is stated to have been received and who is purported to have acknowledged its receipt on the office copy of the letter, was examined by the respondents. He emphatically denied to have received this letter or to have acknowledged its receipt on the office copy. The acknowledgment was sent for examination and opinion to Ghulam Abbas Jaffri, who has testified that the signature in acknowledg ment is not of Tariq Malik Usmani. Finally, there is on this point the evidence of Mr. Ghori, Joint Director Labour, who was the conciliator to whom the industrial dispute raised by the appellant‑Company was referred. He was examined by the appellant‑Company in the case of respondent Muhammad Hanif and was also further examined by this Tribunal in order to clarify the evidence previously given by him. Although he has supported the contention of the appellant‑Company and testified to having received on 9‑2‑1977, the letter relating to the withdrawal of the demand for reduction of two time keepers, his evidence on this point does not inspire confidence and regretfully cannot be acted upon for the reasons which will presently follow. The copy of the letter said to have been received by him neither bears his initial nor the diary or inward number of his office. On the other hand, the demand notice, dated 10‑12‑1976, bears both his initials and the diary number of his office, indicating that this was the usual practice. Furthermore, it was admitted by Mr. Ghori that the letter of 9‑2‑1977 was not even entered in the inward register of his office. Finally, no reference to this letter or the giving up of the demand for the reduction of two posts of time keepers is made in the minutes of the conciliation proceedings for 10‑2‑1977 or subsequent dates. I am accordingly of opinion that the appellant‑Company has failed to establish that the said demand was given up.

3. It was next submitted by Mr. Mahmood Ghani that even if the Tribunal takes the view that the demand relating to the reduction in the posts of time keepers was not withdrawn and was subsisting at the time that the services of the two respondents were terminated, the action taken by the appellant‑Company was in the exercise of its right of bona fide re organization and was not hit by any of the provisions of section 47, I. R. O. The learned, Representative contended that since the two respondents were discharged for reason of redundancy and not by way of punishment, no permission of the Conciliator was required and that furthermore in taking the said action in respect of the respondents the appellant‑Company had in no way altered the conditions of service applicable to them but had acted strictly in accordance with the conditions of service as applicable to them by law. In support of the first limb of his arguments, the learned Representa tive relied upon the decisions of the Supreme Court in the cases of Pakistan Petroleum Workers' Federation v. Burmah Shell Oil Storage & Distributing Company of Pakistan (P L D 1961 S C 479) and Zeal Pak. Cement Factory Ltd. v. Chairman, West Pakistan Industrial Court (1965 P L C 216) and the decisions of my learned Predecessor in the cases of Saifee Development Corporation Ltd. v. Inamur Rehman (1969 P L C 402) and Karachi Industrial Corporation v. Muhammnd Saeed (1969 P L C 574). These autho rities undoubtedly support the contention of Mr: Mahmood Ghani. In the case of Pakistan Petroleum Workers' Federation Cornelius, C. J., delivering judgment on behalf of the Supreme Court, approved the rule that discharge of employees in consequence of bona fide re‑organization was permissible and was not violative of section 33 of the Industrial Disputes Act, 1947. In the Zeal Pak.'s case, Cornelius, C. J., reiterated the view that he had earlier taken in the case of Pakistan Petroleum. Workers' Federation, and observed as follows :‑

"In the present case, there is no manner of doubt that there was a re‑organisation carried out for a bona fide purpose of the industry, and the notices of discharge were given' exclusively in relation to the redundancy which thus resulted and without any taint of victimization. There was nothing in the nature of punishment or vindictiveness involved. We consider that the action of the Factory in respect of the employees retrenched in this case as surplus to requirements being bona fide, it did not attract the control of the Industrial Court under section 30 of the Ordinance, and we accordingly allow this appeal and set aside the order of Chairman directing the re‑instatement of these 19 workers."

It is true that the aforesaid decisions are under the Industrial Disputes Act, 1947, and the Industrial Disputes Ordinance, 1959, respectively but section 33 of the said Act and section 30 of the said Ordinance contain substantially the same provisions as are embodied in clause (b) of subsection (I) of section 47, I. R. O. The keywords in the said clause are "otherwise punish and hence discharge or termination of services simpliciter, and not byway of punishment, does not attract the application of the said clause.

4. In support of the second limb of his argument that discharge of the two respondents in consequence of their posts having become redundant due to re‑organization in the appellant‑Company does not constitute alteration to their disadvantage the conditions of service applicable to them before the commencement of the conciliation proceedings, Mr. Mahmood Ghani relied upon cases from the Indian jurisdiction reported as Salem‑Shevapet S. V. Bank v. Krishan ((1959) 2 L L J 797), Mohini Sugar Mills v. Hassan ((1962) L L J 389) and Manu v. Aspinwal & Co. ((1963) 1 L L J 212). The decision of the Madras High Court in Salem Shevapet's case dealt with the question of dispensing with the services of an employee under section 41(1) of the Madras Shops and Establishments Act, the provisions whereof were materially different from those of section 47, I. R. O. As such the ratio in that case is clearly inapplicable to the instant case. In the case of Mohini Sugar Mills, the Patna High Court held that retirement of an employee, during the pendency of an industrial dispute, on his attaining the age of 55 years, in accordance with the rule fixing the age of superannuation as 55 years, neither amounts to discharge of the employee nor alteration of the conditions of service applicable to him for the purposes of section 33 of the Industrial Disputes Act, 1947. In Manu's case, the High Court of Kerala held that termination of services simpliciter of an employee, even during the, pendency of an industrial dispute concerning the said employee, is neither hit by the bar against discharge for misconduct contained in clause (b) of subsection (1) of section 33, Industrial Disputes Act, 1947, nor amounts to alteration of the conditions of service applicable to him for the purposes of clause (a) of the said subsection. Although the provisions of section 47, I. R. O., are substantially different from those contained in section 33, Industrial Disputes Act, 1947, in that whereas the former contains an absolute bar against alteration of the conditions of service of an employee to his prejudice, during the pendency of an industrial dispute concerning him, the latter specifically permits alteration of conditions of service in regard to a matter nor connected with the dispute, I am inclined to agree with the view, taken by the Indian Courts that discharge or termination of services of an employee in accordance with the conditions of service applicable to him before the commencement a of the industrial dispute would not be alteration of the conditions of service of such employee and hence would not be bit by section 47, I. R. O. It has, therefore, to be seen whether retrenchment in consequence of re organization was a condition of service applicable to the respondents and hence was permissible.

5. Clause (1) of Standing Order 12 permits an employer to terminate the services of even a permanent workman upon giving him one month's notice or pay in lieu of notice. The essential requirements for the exercise of this power, which is subject to any collective agreements or conditions of service to the contrary applicable to the workman, are that the order terminating his services must be in writing and that further it must specifically state the reasons for the action taken. Retrenchment in consequence of bona fide re‑organization would thus fall under the aforesaid provision and would accordingly be permissible. However, if there is no genuine re organization and it is used merely as a cloak to get rid of an employee who is not liked by the employer or whom he finds inconvenient for any reason, or for the purposes of bye‑passing the provisions relating to the dismissal of a workman, the discharge or termination of services of the workman would be liable to be set aside. It may be pointed out that clause (3) of Standing Order 12 gives a right to a workman, who is aggrieved by the termination of his services, to file a grievance petition before a Labour Court in accordance with the provisions of section 25‑A, I, R. O., and thereupon the Labour Court is entitled to go into all the facts of the case. It was very fairly conceded by Mr. Mahmood Ghani, that mala fide retrenchment or termination of services, if it amounts to victimization, is not protected.

6. It has, therefore, to be teen Whether there was genuine re‑organization in the appellant‑Company and the discharge of the respondents was bona fide and in consequence of such re‑organization and does not amount to victimization. It was contended by Mr. Mahmood Ghani that the re organization in the appellant‑Company was of a permanent nature, continues up to the present and was motivated solely by the desire to effect economy and hence should be considered as genuine and, bona fide. However, a re‑organization that is designed to affect specific workmen, as against a category of workmen, can hardly be considered genuine or bona fide, specially if the so‑called re‑organization neither results in improved efficiency nor effects economy. It has been held by the learned Labour Court that the so‑called re‑organization in the time office of the appellant‑Company was not made for bona fide reasons but had been made with the object of getting rid of the respondents who had incurred displeasure of the appellant‑Company for some reasons. Now, although the learned Labour Court has not indicated the reasons due to which the respondents may have incurred the displeasure of the appellant‑Company, it may be pointed out that in their grievance petitions respondent Ch. Abdul Khaliq has asserted that hr. was President of the Workers Union in the .Corning Glass Company from 1971 up to 1975, while respondent. Muhammad Hanif has asserted that he was the Treasurer of the Union. The suggestion thus is that 'during their term as office‑bearers of the Workers' Union they had incurred the displeasure of the appellant‑Company for their Trade Union activities. If action against the respondents was motivated by this reason, not only the so‑called re‑organization would he male fide but further the discharge of the respondents would clearly constitute victimization. In the Law of Industrial Disputes by Malhotra, Vol. I, Second Edition, at pages 840 and 841; there is a. very useful discussion, based on decisions from the Indian Jurisdiction, on what is and what constitutes victimization. The learned author has specifically dealt with the fairly common occurrence of employers getting rid or attempting to get rid of employees solely or principally for the reason that they had actively engaged themselves in Trade Union activities and had championed the cause of workmen. Although, in the instant case, the respondents have failed to establish that their discharge was on account of their Trade Union activities, the circumstance that they were important office‑bearers of the Workers' Union sometime before their discharge has to be takes into consideration alongwith other material circumstances in determining whether the re‑organization in the time‑office of the appellant- Company was bona fide or mala fide.

7. Now, the re‑organization in the appellant‑Company was limited only to its time‑office where only four time‑keepers were employed. Since the factory of the appellant‑Company admittedly works three shifts, ordinarily a minimum of three time‑keepers would be required, one for each shift. Additionally, one more time‑keeper would be required in order to take the place of a time‑keeper who falls ill or is on leave or is otherwise absent. The appellant‑Company has tried to get along with two time‑keepers, after discharging the two respondents from service, by making the remaining two time‑keepers to do overtime. It is obvious that such a devise, on the one hand, cannot be resorted to for long, for in the event of any one of the time‑keepers falling ill or proceeding on annual leave, the remaining time‑keeper obviously would not be able to cope up with three shifts even by doing over‑time, and secondly, by taking over time work from the two the appellant‑Company c3uld neither be achieving better efficiency nor effecting, economy. The so‑called re‑organization, which clearly appears to have been unnecessary,' was thus resorted to solely with the object of getting rid of the two respondents, as contended by Mr. Ali Amjad, their learned counsel. The fact that the two respondents were the junior most in their category of employment makes no difference since the appellant‑Company was well aware of the fact that any reduction in the number of time‑keepers would throw the respondents out of employment. No doubt, as pointed out by Mr. Mahmood Ghani, alternate employment was offered to the respondents, but the alternate jobs were of such a nature that the respondents were bound to refuse them, though their emoluments would have remained unchanged if they had accepted the same. As already stated, respondent Ch. Abdul Khalique was offered the post of Assistant Operator while respondent Muhammad Hanif was offered the job of Packer Boy. These are not posts which any educated man in our country could accept without considerable loss in his status and social position. It is a well‑recognized fact that educated men in our country are extremely chary of accepting what they consider menial jobs even though they may be extremely well‑paid. This tendency appears to have been exploited by the appellant‑Company in offering the alternate jobs to the two respondents, knowing fully well that they would not accept the same. A further circum stance indicating the keenness of the appellant‑Company to get rid of the services of the two respondents and the importance that they attached to this matter is that they even went to the extent of raising a demand in an industrial dispute in respect of it. The cumulative effect of all these facts is clearly suggestive of a male fide intention on the part of the appellant‑Company to get rid of the services of the ‑two respondents through the devise of a sham re‑organization. Mr. Mahmood Ghani. finally sought to contend that re‑organization is the right of an employer and in support of his contention relied upon the decision of this Tribunal in the case off Naeemuddin v. The Sind Labour Court No. IV (1979 P L C 59). Re‑organization may be the right of the employer but it must be bonafide re‑organization and not resorted to as a clever device to get rid of any specific employees, as in the instant case.

8. For the reasons stated by me above, I find no valid reason for interfering with the impugned orders of the learned Labour Court. I would accordingly uphold the same and dismiss the two appeals.

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