FAZAL RAHMAN & SONS LTD. Versus MUHAMMAD AFZAL
This petition for leave to appeal arose from a dispute where the Federal Government, after taking over the management of a vegetable ghee mill under the Hydrogenated Vegetable Oil Industry (Control and Development) Act, 1973, sold its solvent extraction plant to a private entity. The registered sale-deed transferred the services of 140 workers, including the contesting respondents, who were employed at the plant, to the vendee on the same terms and conditions. The respondents challenged this transfer under Section 25-A of the Industrial Relations Ordinance 1969, arguing it amounted to termination and placed them at a disadvantage. While the Labour Court dismissed the petitions, the Punjab Labour Appellate Tribunal directed that the workers be given options to choose their employer, a decision upheld by the High Court. The Supreme Court of Pakistan granted leave to appeal to examine whether the Appellate Tribunal could legally interfere with the transfer of services of workers who were factually employed at the sold plant at the relevant date, and suspended the operation of the Tribunal's order in the interim.
- Whether the services of workers employed in a specific section of an industrial undertaking can be legally transferred to a vendee upon the sale of that section?
- Can the Labour Appellate Tribunal direct an employer to offer options of transfer to workers when they are factually on the strength of the sold plant at the time of sale?
- Does the transfer of services of employees to a vendee on the same terms and conditions of service amount to an illegal termination of employment?
- Hydrogenated Vegetable Oil Industry (Control and Development) Act, LXV of 1973
- Section 25-A, Industrial Relations Ordinance 1969
ORDER
SAAD SAOOD JAN, J. --Under the Hydrogenated Vegetable Oil Industry (Control and Development) Act, LXV of 1973, the Federal Government took over the management of and later acquired the controlling interest in the Fazal Vegetable Ghee Mills. The Mills had three sections, namely, Oil Section, Ghee Section and Solvent extraction. section. By a registered sale-deed dated 22-11-1979, it sold the solvent extraction plant to M/s. Fatima Enterprises, Limited, Multan. The sale-deed provided for the transfer of the services of workers who were employed in connection with the said plant to the vendee. The relevant extract from the sale-deed reads as follows:-
"That in consideration of the aforesaid sale and mutual terms and conditions agreed to between the parties, the vendor have transferred to the purchaser, the total staff comprising 140 Employees who were on the date of the take over (i.e. 2-9-1973 on the pay roll of the Solvent Extraction Plant of the Vendor Company or/and employed thereafter on Solvent Extraction Plant strength till date to the purchaser, on the same terms and conditions as regards pay and all other allowances and benefits as presently enjoyed by them either with the Vendor Company or with the Ghee Corporation of Pakistan Limited, and the purchaser have accepted the said total staff so transferred to it on its pay roll and agrees and undertakes to treat the same as employed by it effective today on the same terms and conditions as regards pay and all other allowances and benefits as they were presently enjoying with the Vendor Company of the Ghee Corporation of Pakistan, Limited,*****-
2. In accordance with the deed the services of 140 employees, including respondents Nos.1 to 8 who were employed in connection with the solvent extraction plant, were transferred to the vendee.
3. Respondents Nos.1 to 8, hereinafter referred to as the contesting respondents, as well as the General Secretary of the Collective Bargaining Agent of the Mills, challenged the transfer of their services from the Mills to the vendee by separate petitions under section 25-A of the Industrial Relations Ordinance before the local Labour Court. Their case in brief was that as at the time of the transfer an industrial dispute was pending between the Collective Bargaining Agent and the management of the Mills, the plant could not be sold away; further, the transfer of their services was tantamount to termination of their employment and that the said transfer had placed them in a disadvantageous position. The Labour Court dismissed all the petitions, holding that the Collective Bargaining Agent was not competent to move the petition and that the contesting respondents had not been able to make out a case on merits. From the decision of the Labour Court, the contesting respondents filed appeals before the Punjab Labour Appellate Tribunal. The learned Tribunal thought that the contesting respondents had not been employed by the Mills for any particular section and, that being so it was not proper to transfer their services to the vendee just for the reason that at the time of the sale they were on the roll of the solvent extraction plant; the employment on the plant was only of a seasonal nature and nothing could be said what might happen in future; in the event the plant was closed down., those whose services were transferred would suffer simply because per chance they were on the rolls of the plant at the time of its sale. In this view of the matter, the learned Tribunal directed that the contesting respondents be asked to give options and in the event they elected not to serve under the vendee, the most junior employees of the Mills should be transferred to the vendee.
4. The petitioner who represents the interest of the Federal Government in the Mills, invoked the constitutional jurisdiction of the High Court to call in question the legality of the order of the Tribunal. A learned Single Judge in the High Court upheld the view taken by the Tribunal and dismissed the petition. The petitioner now seeks leave to appeal from this Court.
5. In support of this petition it is pointed out that there is not factual controversy on the point that on the relevant date the contesting respondents were employed on the solvent extraction plant. Their allegation that their services had been transferred to the vendee of the plant for ulterior motives was rejected by the Labour Court. In the circumstances it was not open to the learned Appellate Tribunal to interfere with the transfer of their services to the vendee.
6. The contention raised on behalf of the petitioner requires examination. . Leave to appeal is granted. Security for costs in the sum of Rs.2,500. In the meanwhile the operation of the order of the learned Tribunal is suspended.
M.I./S-104/S. Leave granted.