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Application No. KAR-23 of 1986, heard on 5th February, 1986.

---S. O. 11-A--Industrial Relations Ordinance (XXIII of 1969), S.32 (1-A)--Closure of establishment--Application for permission of Labour Court--Joining individual workers as party--Whether necessary besides Collective Bargaining Agent--Plea that individual workers not having been impleaded were prejudiced because they were liable to be retrenched--Labour Courts, held, is empowered to permit closure by considering grounds such as loss to establishment and other equivalent grounds resulting in failure of concern altogether--Power granted to Labour Court for adjudication in order to safeguard liabilities of management and to see pros and cons that closure was not made to circumvent any other issue namely unnecessary retrenchment- Adjudication by Labour to that extent, would be proper and in accordance with requirements of proper justice-Joinder of individual workmen, would not be necessary in application for closure permission where collective bargaining agent was party and such proceedings.

South British Insurance Employees' Union-v. Sind Labour Court No. IV and others Karachi, 1975 S C M R 49 and 1984 PLC 1554 rel.

Ali Amjad for Applicant.

Mahmood A. Ghani for Respondents.

Date of hearing: 5th February, 1986.

A suo motu revision was admitted on 16-1-1986. The Sind Labour Court No. III at Karachi had decided an application on 13-1-1986, and ordered therein that he would decide the legal objections alongwith the main case. Against this order the present revision was filed in this Tribunal.

2. The revision petition was argued by Mr. Ali Amjad, Advocate on behalf of the petitioners and Mr. Mahmood A. Ghani on behalf of the respondent establishment. The submissions of the Ali Amjad were that the Collective Bargaining Agent, namely the Workers Union is joined as a party but the workers themselves individually were not joined as a party, therefore, they are prejudice. At the same time, the applicants (the C.B.A.) has filed an application under section 32(1-A) of I.R.O., 1969 for the adjudication of an industrial dispute. His arguments were that since the individual workers are not joined, their case is prejudice because they were liable to be retrenched.'

3. The facts are that Messrs United Woollen Mills Ltd., Karachi had filed an application under Standing Order 11-A for closure of the establishment. The Standing Order 11-A reads as follows:--

"11-A. Closure of establishment.--Notwithstanding anything contained in Standing Order 11, no employer shall terminated the employment of more than fifty per cent of the workmen or close down the whole of the establishment without prior permission of the Labour Court in this behalf, except in the event of fire, catastrophe, stoppage of power supply, epidemics or civil commotion.

Explanation--'Close down' in this Standing Order includes lay-off of workmen beyond fourteen days where such lay-off results in closure of an establishment but does not include lockout declared, commenced or continued in accordance with the provisions of the Industrial Relations Ordinance, 1969 (XXIII of 1969).

(Notes)--All that this Standing Order prescribes is that no employer shall close down the whole of its establishment without prior permission of the Labour Court. Thus, the Labour Court's permission might indeed be the last step in process of closing down or an application may be made by the employer simultaneously with any other step he may have to take to wind up his business and close down his establishment. The Standing Order does not spell out any sequence in which the various steps closing down an establishment have to be taken by an employer."

4. Mr. Ali Amjad, the learned counsel argued that the workers individually would be prejudiced. On the other hand, Mr. Mahmood A. Ghani argued the matter. The Labour Courts are given the powers to permit the closure of an establishment considering the grounds such as the loss to the establishment or equivalent other grounds which would result the failure of the concern altogether. This power was granted to the Labour Courts for adjudication in order to safeguard the liabilities of management and see the prose and cons that the closure is not made to circumvent any other issue, namely, unnecessary retrenchment of the employees concerned. To this extent the adjudication is proper and fulfils the requirements of proper justice. There are a number of rulings namely, the one by Supreme Court of Pakistan, unreported judgment, dated 5-12-1981 in the case of Pakistan Textile Workers Union v. Textile Corporation of Pakistan Ltd. and another; whereby it was held by the Supreme Court that "the management had placed material to show that the losses had grown to a size many times that of the assets and that it was no longer economical to run the Mill. In the circumstances the High Court was justified in permitting the management to close down the Mill, The petition does not raise any question of law such as would warrant an interference with the decision of the High Court. Leave to appeal is, therefore, refused".

5. There is an authority of Supreme Court of Pakistan in the case of South British Insurance Employees' Union v. Sind Labour Court No. IV and another, Karachi, reported in 1975 S C M R 49. Following para. is worth quoting:--

"It will be seen that the Standing Order does not stipulate that the application to the Labour Court for permission to close down should be the first step in the process. All that it prescribes is that no employer shall close down the whole of its establishment without prior permission of the Labour Court in this behalf. Thus, the Labour Court's permission might indeed be the last step in the process of closing down, or an application in this behalf may be made by the employer simultaneously with any other step that he may have to take to wind up his business and close down his establishment. The Standing Order does not appear to us to spell out any sequence in which the various steps for closing down an establishment have to be taken by an employer, and, therefore, no question arises of the respondent having committed any illegality in this behalf."

6. There is yet another authority reported in 1984 P L C 1554 by this Tribunal wherein it was held as under:--

"Closure of establishment--Order by Labour Court based on oral and documentary evidence in support of pleas that there was consistent decline in business justifying closure--Not open to interference by Tribunal in its suo motu jurisdiction under section 38(3-A) I.R.O."

7. After hearing the arguments of both the learned counsel, I feel that the Joinder of the individual workman is not necessary in the application for closure of the establishment under Standing Order 11-A.

I, therefore, dismiss the present suo motu revision.

A. E. Revision dismissed.

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