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Application No138 of 1984, decided on 10th July, 1985

West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance (VI of 1968)‑‑

‑‑‑S.O. 13‑‑Industrial Relations Ordinance (XXIII of 1969), S.25‑A‑ Retrenchment on account of re‑organisation due to losses‑‑Seniority amongst workers of same category performing identical duties overlooked and juniors retained‑‑Office‑bearer of rival union retrenched at a time when application for referendum was made by such Union‑‑Petition against termination of service, in circumstances, accepted.

Shafiq Qureshi for Applicants.

This is an application under section 25‑A, I.R.O. filed by Mr. Shamshur Riaz and Mr. Syed Akbar . Khan for re‑instatement with back benefits against wrongful dismissal.

2. Applicant No. 1 claims that he was permanently employed as skilled worker in Moulding Department since 1‑10‑1975. Applicant No. 2 Akbar Khan was employed as unskilled worker in Skip House since 1‑9‑1981.

3. Applicant is General Secretary, Akbar is Member of the Trust Ceramic Industries Labour Union.

4. On 25‑4‑1984 respondent terminated their services. If the administrative change was made, there was no justification of the retrenchment of workers. Applicants have explained the background that they had convened meeting of workers in connection with the election and, the referendum between 2 Unions. Members of C. B. A. Union joined this union which resulted in majority membership.

5. Applicant has the grievance that the present C.B.A. Union Acts under instruction of the management because the President and the General Secretary are the officers of the respondent‑Company. As a result of this displeasure, the management terminated services of 47 workers. Some have received their dues and some have contested the petition against the illegal retrenchment.

6. Respondent has filed written statement and contended that Mr. Shamshur Riaz was employed in the respondent‑factory a5 the unskilled worker from 1‑10‑1975 and Mr. Syed Akbar Khan was employed from 1‑9‑1981 as the unskilled worker. According to the respondent Mr. Shamshur Riaz was promoted as semi‑skilled worker from 1‑4‑1977 and thereafter, as skilled worker from 1‑4‑1978. There are three registered trade Unions namely:

(1) Employees Union of Trust Ceramic Industries.

(2) Trust Ceramic Industries Employees Union

(3) Trust Ceramic Labour Union

7. Employees Union of Trust Ceramic Industries is the C.B.A. among the registered Union.

8. The termination of 45 workers is justified because factory has been, suffering losses, for the last 2 years and in severe financial difficulty. In order to re‑organize the organization, and to reduce the working force, measure of economy was used by closing Slip House, Laboratory, Godown and transferred those departments to contractor Sadullah Khan

9. Respondent has further shown the losses of 1982 and 1983 as Rs.13,07,988.37 confirmed, by the Chartered Accountant. In addition to that, respondent has taken loan of Rs.50,00,000 from the United Bank and Rs.40,71,280 is payable. He has further explained the additional loan of Rs.74,974.44.

10. Respondent has however, denied the charge that Trust Ceramic Employees Union is their agent. They have also denied the charge that they had anything to do with the referendum. They have justified retrenchment due to severe financial losses. They have also denied that the respondent has given the Slip House, Laboratory, Godown Department to avoid the Government dues. They have shown that if their action, would have been mala fide, they would not have terminated the services of the Vice‑President of C.B.A. Union. This, according to them shows that the action was legally justified on the basis of the loss they suffered.

11. According to them retrenchment is on the principles, that last comes last goes.

1. Mr. Shamshur Riaz has challenged his termination on this ground that the retrenchment of the workers in the respondent‑factory is illegal. The so‑called administrative change claimed by the respondent is mala fide as there is no justification of the retrenchment. The contention of the respondent that department is given on contract is also mala fide action. There is no such basis.

2. Finally, it is strongly asserted by the applicant Mr. Shamshur Riaz that the so‑called losses claimed by the respondent‑Company is not true. The fact is that this termination has some backgrounds that he was the General Secretary. He had convened a meeting of the workers in connection with the election and the referendum between 2 Unions. Large number of Members of the C.B.A. Union had joined this union resulting in the majority membership. The present C.B.A. acts under the instructions of the management. It is, therefore, the present management was not pleased with the formation of this Union of workers. It resulted in retrenchment. On the other hand the respondent has contended that the company has suffered losses. This retrenchment was due to the fact that the company wanted to bring administrative change in view of the losses. There is no mala fide in their action of retrenchment because of the referendum as claimed by the General Secretary Mr. Shamshur Riaz. They have denied that respondent has given the Slip House Laboratory and Godown Department on contract basis. They have denied that giving of few departments on contract basis to an independent contractor, whether is illegal.

3. Both the parties have produced the evidence on the factual issues and also produced the documentary evidence namely the seniority list and the balance sheet.

4. The Court has also heard both the representatives and perused the record.

5. As far as the loss of company is concerned respondent has produced the balance‑sheet to explain the losses. There is no other evidence brought forth by the applicant as the union representative that the so‑called balance‑sheet is not the correct picture of the account. Court, therefore, is of the view that the balance‑sheet produced by the company is correct. The Court is further supported by the admission of the applicant himself where he himself has said in the evidence on page 2 of the deposition such as losses of the factory due to the fact of the difference between management and executive staff'.

6. From this admission it concludes that company has suffered the losses. There is no evidence to this effect that it was due to the differences between the management and the executive staff.

7. The second contention of the respondent is that he has been victimised because he made application for the referendum. The Court has also examined the evidence of the respondent witness. Respondent has admitted that application was made by the applicant for referendum but it is not correct that it was due to this application they made retrenchment. Respondent has made attempt to show unawareness about the referendum that any such application was made to the Registrar. By this concealment of the fact that the respondent had no knowledge of such referendum, till they received the notice, the Court is of the view that the respondents being such important industry must be fully in a knowledge of the fact that such applications are being made by the concerned union against them for holding referendum. They cannot show ignorance of the fact of such referendum to be the basis of retrenchment. However, there is no evidence to draw this inference that such can be the reasons of retrenchment.

8. Third contention is whether Shamshur Risz was the junior person to be retrenched. In this context, I reproduce the evidence which has come on the record:

"I did not offer any alternate employment to the applicant. Neither at the time of termination nor after termination. It is incorrect to say that Sanitary Ware, Casting and fixing falls under Moulding Section. It is 'correct that Sanitary Ware, Casting and Fixing Department are not connected in any manner in Moulding Department. In Moulding, Section there is finishing work also. It is incorrect to say that at the time of termination of employment he was working in Sanitary Ware Finishing Department. There is no any Sanitary Ware Finishing Department. There is only moulding Section. There is no Sanitary Ware Finishing Section. At the time when his services were terminated, he was service Section. In Moulding there are two types work, finishing and water finishing. Applicant was given the duty of finishing only. It is the finishing of Sanitary Ware. There is no difference between the Moulding and sanitary ware finishing. It is correct that the applicant was doing work of sanitary ware finishing. There are 9 people working there. The witness again clarified that there is Moulding Section, sanitary finishing and sanitary ware section. Applicant was working in Moulding section. Syed Asghar Ali and Muhammad Owais were working in the sanitary ware finishing department. It is correct that these two workers are junior to the applicant. It is correct that at the time when the retrenchment was effected, semi‑skilled workers and unskilled workers were also working, in the department of the applicant."

9. From the evidence of this witness it is evident that Mr. Shamshur Riaz was the senior person against Asghar Ali and Muhammad Owais. Respondent has tried to confuse that applicant was given the duty of finishing work only. At the same time, they have stated that there is a Moulding Section, sanitary finishing and sanitary ware section. They have denied that Mr. 8hamshur Riaz was working in the Sanitary Ware Finishing Department. Even if the Court has taken this view that Mr. Shamshur Riaz was working in the Moulding Section, yet his seniority is to be determined from the date of his appointment when he was unskilled workman, then became semi‑skilled and afterwards became skilled workman. Seniority is the right of the respondent which he has claimed from the date of entry in the service. So if the Moulding Section is still working semi‑skilled and unskilled workers are also working in the same department. There is no justification to make retrenchment of this senior person unless the entire department was retrenched which is not the case. Under the principle of retrenchment last person is to be retrenched and that person who is to be retrenched is always given the alternative appointment or by provision of section 14 it is provided that any number of workmen are retrenched and the employer proposed to take into his employment any person within period of one year from the date of such retrenchment he shall give an opportunity to the retrenched workers belonging to the cadre concerned and they have preference to other person having priority according to the length of service.

10. In the present case firstly, if his seniority be determined from the date of entry he is the senior person against Asghar Ali and Muhammad Owais.

11. Secondly, respondent has tried to justify his retrenchment by making confusion that in Moulding Section there are types of work finishing and water finishing. According to them applicant was given duty of finishing work only. They have again stated that finishing means finishing of sanitary ware. They have further explained that there is no difference between Moulding and sanitary water finishing. By this, they have tried to distinguish that Asghar Ali and Muhammad Owais were working in Sanitary Ware Finishing Department and Mr. Shamshur Riaz was working in Moulding Department. In fact, there was no distinction, when they themselves have admitted that there is no difference between Moulding and Sanitary Ware Finishing. In that case, Mr. Shamshur Riaz against Asghar Ali and Muhammad Owais, and also from the date of seniority, he is the senior person, if his services are considered, as unskilled workman. When the some unskilled workers and semi‑skilled workers are working in the department admitted by them in the evidence.

12. Further the circumstances speak of the fact that the retrenchment may be bona fide but the retrenchment of this particular person seems to be influenced by this fact that he is the General Secretary and he was the man who made applications for the referendum between 2 Unions of which one is under the influence of the management and other is against. The losses may be the reason of retrenchment but the case of this General Secretary is peculiar where this fact has come on the record that his seniority was overlooked because of this reason.

13. In the result the Court allows the application of General Secretary and gives him the relief as prayed.

A.E. Application allowed.

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