Hotel Agrabad Ltd. Vs. The Chairman, First Labour Court, Katungonj

Appellate Division Cases

(Civil)

PARTIES

Hotel Agrabad Ltd. Chittagong, Repreented by its Managing Director …………………..Appellant.

(In both the cases)

-Vs-

The Chairman, First Labour Court, Katungonj, Chittagong and others …………………………………Respondents.

(In both the cases)

JUSTICE

Syed J.R. Mudassir Husain CJ

Mohammad Fazlul Karim J

Amirul Kabir Chowdhury J

Md. Joynul Abedin J

JUDGEMENT DATE: 10th January 2007

The Industrial Relations Ordinance, 1969, Section 34.

The Companies Profits (Workers Participation) Act, 1968, Section 3.

The Payment of Eages Act, 1936, Section 15.

Agrabad Hotel and Restaurant do not fall within the category of industrial undertaking as per the Scheme set out in the schedule of the Companies Profits (Workers Participation) Act, 1968 and as such the appellant company was not liable to establish a Workers Participation Fund and Workers Welfare Fund as demanded by the respondent workers …………………(7)

Section 34 of the Industrial Relations Ordinance, 1969 and directing to implement the scheme under the Companies Profits (Workers Participation) Act, 1968……….(1)

The scope of action as contemplated under section 5 is a little consequence to the workers although a scheme of the Companies Profits (Workers’ Participation) Act, 1968 confers a right on the workers to have such Fund established for their benefit. Section 5 therefore offers a limited scope for redressal of the grievance of the aggrieved workers when the company refused to establish such Fund. In any view of the matter, no express intention has been expressed in the said Act, 1968 ousting the jurisdiction of the labour Court which could have been done by the legislature if it so desired …………………….(11) ,

Section 7 we find that it pre-supposes that the necessary Fund has already been established and then incase the workers are denied their benefit of the Fund they may have a recourse to section 7 of the Companies Profits (Workers Participation) Act, 1968. In the present case no Workers Participation Fund and Workers Welfare Fund have been established because of the intransigence of the appellant company which eventually compelled the respondent workers to file the said IRO cases. Section 7, therefore, is not applicable in the present case …………….(12)

In case a company to which the scheme under the Act applies defaults to establish such Fund any collective bargaining agent or even a worker may apply to the Labour Court under section 34 of the said Ordinance for enforcement of such right guaranteed or secured to it by law ……………..(13)

Since the appellant-company refused to establish Workers Participation Fund and

Worker’s Welfare Fund the respondent workers were competent to enforce their right to have the said Fund established in exercise of the right conferred on them under section 3 of said Act, 1968 by filing an application to the Labour Court under section 34 of the Industrial Relations Ordinance. This view finds support in the

case of M/S. Railway Men’s Stores Ltd. and another Vs. Chairman, Labour Court, 30 DLR(SC) (1978) 251 ……………… (14)

Civil Appeal Nos. 319-320 of 2002 (From the Judgment and Order dated 22.6.1999 passed by the High Court Division in Writ Petition Nos. 1370 and 1371 of 1992)

Rafique-ul-Huq, Senior Advocate (Faheemul Huq and Ahasanul Karim, Advocates with

him), instructed by A.K.M. Shahidul Haq, Advocate-on-Record………. For the Appellant

(In both the cases)

Abdul Mannan, Senior Advocate, instructed by B. Hossain, Advocate-on-Record………. For Respondent Nos. 6, 8, 11-15, 17,18 ,20 ,22 ,2634 , 37, 38, 40, 42, 44, 46 & 47. (In C.A. No. 319 of 2002)

Abdul Mannant Senior Advocate, instructed by B. Hossain, Advocate-on-Record For

Respondent Nos. 2, 4, 6, 9-11, 15,16,18,19, 21, 22, 26, 28-30, 33, 35, 38, 40, 41, 42, 46,

54-56, 65 & 60. (In C.A. No. 320 of 2002)

Not Represented. .. For Respondent Nos. 1-5, 7. 9, 10, 16, 19, 21, 23-25, 29, 30, 35, 36, 41, 43, & 45. (In C.A. No. 319 of 2002)

Not Represented…………. For Respondent Nos. 1, 3, 5, 7, 8, 12-15, 17, 20, 23-25, 27, 31, 34, 36, 37, 39, 43-45, 47-53, 57 & 59. (In C.A. No. 320 of 2002)

JUDGMENT

1. Md. Joynul Abedin J: These appeals by leave are directed against the judgment and order dated 22.6.1999 passed by a Division Bench of the High Court Division in Writ

Petition Nos. 1370 and 1371 of 1992 discharging the rules refusing to interfere with the decision made by the Labour Court, Chittagong under section 34 of the Industrial Relations Ordinance, 1969 and directing to implement the scheme under the Companies Profits (Workers Participation) Act, 1968 within 30 days from the judgment.

2. These two writ petitions were heard analogously and disposed of by the said judgment.

Accordingly, Civil Petitions for Leave to Appeal Nos. 1303 and 1304 of 1999 were heard together and disposed of by the impugned judgment.

3. The case of the appellant company, Hotel Agrabed Ltd., in short, is that it has been carrying on, among others, with the business of hotel and restaurant in Chittagong. The respondents are the workers under the appellant company and they jointly filed IRO Case

Nos. 78 and 79 of 1984 (hereinafter referred to as said IRO cases) in the First Labour

Court, Chittagong under section 34 of the Industrial Relations Ordinance, 1969 stating, in the said hotel and restaurant business and although the appellant is an fndustrial undertaking it did not establish a Workers Participation Fund and Workers Welfare Fund by implementing the scheme as required under section 3 of the Companies Profits

(Workers Participation) Act, 1968 depriving them of their share of profit out of the annual net profit of the appellant company from the year, 1971.

4. The appellant company contested the said IRO cases by filing written statement contending, inter alia, that the said IRO cases were not maintainable under section 34 of the Industrial Relations Ordinance inasmuch as the scheme set out under the Companies

Profits (Workers Participation) Act, 1968 was not applicable to the hotel business of the appellant company as a hotel and restaurant was not defined as an “Industrial Undertaking” in the schedule of the aforesaid Act. It was further contended that, as per section 7(2) of the said Act, all claims of the respondent workers relating to the benefits of the scheme of the said Act were required to be settled in the manner provided for under section 15 of the Payment of Wages Act, 1936. Hence the said IRO cases filed under section 34 of the Industrial Relations Ordinance, 1969 were not maintainable.

5. The case of the respondent workers before the Labour Court was that the appellant company was an industrial undertaking as per the scheme of the Companies Profits (Workers Participation) Act, 1968 and thus it was/is under a legal obligation to implement the scheme under the Act by establishing a Workers Participation Fund and a Workers Welfare Fund for the benefit of the respondent workers Welfare Fund for the benefit of the respondent wokers. Since the appellant company failed/refused to implement the scheme by establishing the Workers Participation Fund and Workers Welfare Fund the respondent workers were constrained to file the said IRO cases which were competent and maintainable under section 34 of the Industrial Relations Ordinance, 1969 as their right to have such Fund established was guaranteed and secured under section 3 of the Companies Profits (Workers Participation) Act, 1968.

6. The said two IRO cases were heard by the first labour Court, Chittagong, analogously and were allowed by the decision dated 31.12.1991. The appellant company thereupon challenged the said decision passed in the aforesaid IRO cases by filing Writ Petition

Nos. 1370 and 1371 of 1992 on the ground that the Labour Court did not give any finding on the point of maintainability of the case under section 34 of the Industrial Relations

Ordinance and also that the scheme of the said Act was not applicable to the appellant company. The High Court Division, however, discharged the Rules in the above writ petitions on contest by the impugned judgment and order dated 22.6.1999.

7. It appears from the record that the appellant company put up a defence in resisting the said IRO cases that the Agrabad Hotel and Restaurant do not fall within the category of industrial undertaking as per the Scheme set out in the schedule of the Companies Profits

(Workers Participation) Act, 1968 and as such the appellant company was not liable to establish a Workers Participation Fund and Workers Welfare Fund as demanded by the respondent workers.

8. Mr. Rafique-ul-Huq, the learned Counsel for the appellant-company however for the first time conceded that the appellant company was an industrial undertaking and canvassed only one point that the remedy of the respondent workers lay in the enforcement of the respondent workers lay in the enforcement of their demand under sections 5 and 7 of the Companies (Workers Participation) Act, 1968 and not under section 34 of the Industrial Relations Ordinance. In that view of the matter, both the Labour Court as well as the High Court Division acted in excess of jurisdiction in entertaining the case of the responded workers and making a direction in the impugned judgment to implement the scheme under the said Act, 1968. Hence the impugned judgment and order passed in the aforesaid two writ petitions is not sustainable in law.

9. Mr. A. Mannan, the learned Counsel for the respondent workers dismissed the above contention submitting that the Labour Court was the only competent forum under section 34 of the Industrial Relations Ordinance for redressal of the aforesaid demand of the respondent workers and not the forum indicated under section 5 and 7 of the said Act, 1968 inasmuch as such forum are tiot capable to grant complete and effective relief sought by the respondent workers.

10. Against this backdrop of the case, we need to examine and consider the extent and scope of sections 5 and 7 of the Companies profits (Workers Participation) Act, 1968. Sections 5 and 7 are therefore reproduced below for proper appreciation of the contentions raised on behalf of both the parties. “5. Penalty- (1) Where any company

fails to comply with the provisions of section 3, the Government may, by order in writing, require it to comply with those provisions within such time as may be specified in the order. (2) If the company in relation to which an order under sub-section (1) has been made, fails to comply, every director, manager or other officer responsible for the management of the affairs of the company shall, if the Government, by order, so directs, pay by way of penalty a sum which may extend to ten thousand taka and, in the case of a continuing failuer, a further sum which may extend to one thousand Taka for every day after the first during which the failure continues. (3) A penalty imposed by an order under sub-section (2) shall, if it is not paid within the time specified in the order, be recoverable as an arrear of land revenue. (4) The Government may, upon an application made in this behalf by any person aggrieved by an order made under sub-section (1) or sub-section (2) within a period of six months from the date of the order, review the order and may upon such review pass such orders as it may think fit. 7. Settlement of disputes, etc,- (1)

Any difference arising between the Board and the Company relating to the administration of the scheme shall be reported to the Government whose decision thereon shall be final. (2) All claims of a worker relating to the benefits of the scheme whether against the

Board or the company, shall be settled in the same manner as is provided for in the Payment of Wages Act, 1936 (IV of 1936), for the settlement of the claims arising out of deductions from wages.”

11. Section 5 reproduced hereinabove empowers the government to compel any company engaged in industrial undertaking to establish a Workers Participation Fund and a Workers Welfare Fund if it has failed to establish the same within a specified time. In the event of non-compliance with the government direction to establish such fund every director, manager or other officers responsible for the “management of the affairs of the company could be adjudged to a penalty not exceeding taka ten thousand in the case of continuing failure a further sum which may extend to taka one thousand for every day after the 1st during which the failure continues. In case such penalty is not paid within the time specified in the order such penalty can be recovered as arrears of land revenue. It is therefor clear that this section only provides punishment to delinquent director, manager or other officer responsible for the management of the affairs of the company and no more. The measure or action contemplated under section 5 may result in actual practice in establishment of such Fund by the concerned company. But it is equally true that in an extreme case a stubborn and overbearing company can also successfully avoid establishment of such Fund. Further the provision under section 5 allows an action to be taken by the government against such recalcitrant company and not by the aggrieved workers. The scope of action as contemplated under section 5 is a little consequence to the workers although a scheme of the Companies Profits (Workers’ Participation) Act, 1968 confers a right on the workers to have such Fund established for their benefit. Section 5 therefore offers a limited scope for redressal of the grievance of the aggrieved workers when the company refused to establish such Fund. In any view of the matter, no express intention has been expressed in the said Act, 1968 ousting the jurisdiction of the labour Court which could have been done by the legislature if it so desired.

12. Now if we turn to section 7 we find that it pre-supposes that the necessary Fund has already been established and then incase the workers are denied their benefit of the Fund they may have a recourse to section 7 of the Companies Profits (Workers Participation) Act, 1968. In the present case no Workers Participation Fund and Workers Welfare Fund have been established because of the intransigence of the appellant company which eventually compelled the respondent workers fo file the said IRO cases. Section 7, therefore, is not applicable in the present case.

13. On the other hand, section 34 of the Industrial Relations Ordinance, 1969 can be construed to have conferred a right on the workers of the company, where the scheme applies, to require such company to establish a Workers Participation Fund and a Workers Welfare Fund in accordance with the scheme under the Act. In case a company to which the scheme under the Act applies defaults to establish such Fund any collective bargaining agent or even a worker may apply to the Labour Court under section 34 of the said Ordinance for enforcement of such right guaranteed or secured to it by law. Section 34 reads as under : “Application to Labour Court-Any collective bargaining agent or any employer or workman may apply to the Labour Court for the enforcement of any right guaranteed or secured to it or him by or under any law or any award or settlement.”

14. In that view of the matter, since the appellant-company refused to establish Workers

Participation Fund and Worker’s Welfare Fund the respondent workers were competent to enforce their righf to have the said Fund established in exercise of the right conferred on them under section 3 of said Act, 1968 by filing an application to the Labour Court under section 34 of the Industrial Relations Ordinance. This view finds support in the case of M/S. Railway Men’s Stores Ltd. and another Vs. Chairman, Labour Court, 30 DLR(SC) (1978) 251. We therefore find no force in the point canvassed by Mr. Rafiqul Haque.

15. In that view of the matter, both the Labour Court as well as the High Court Division granted necessary relief to the respondent workers in accordance with law. Hence the impugned Judgment passed in the aforesaid two writ petitions deserves no interference by

this court.

16. Both the appeals are accordingly dismissed without any order as to costs.

Ed.

Source: IV ADC (2007), 231