Find a Lawyer

Application No. HYD-70 of 1975, heard on 12th January 1976.

Industrial Relations Ordinance (XXIII of 1969)---

-----Ss. 34 and 50 read with Employees Cost of Living (Relief) (Amend ment) Act (XIX of 1974) S. 3, Proviso-Interpretation of settlement question whether or not benefit allowed in terms of settlement was intended to grant relief towards cost of living and adjustable in allowance given under Employees Cost of Living (Relief) (Amendment) Act, 1974-Not a question of enforcement of right under S. 34 but question of interpretation of settlement under S. 50 of Industrial Relations Ordinance, 1969-Wages increased in terms of settlement for particular category of workers-Benefit neither specifically demanded or granted on account of increased cost of living nor allowed indiscriminately to all workers-Not adjustable towards allowance granted under Employees Cost of Living (Relief) (Amendment) Act, 1974.

Rafiq Ahmed for Appellant.

Mahmood A. Ghani for Respondent.

Date of hearing: 12th January 1976.

This is an application under section 50 of the I. R. O. for the interpreta tion of the settlement.

2. The Union raised an industrial dispute by serving demand notice as well as strike notice. Two of the demands which are relevant for the purpose of the present application read as under:

(1) Present wages of all the employees of the factory be increased by 60 %.

(2) An increase of Rs 50 per month be allowed in the existing Dearness Allowance.

3. A settlement was reached whereby some demands were accepted and some were withdrawn. With regard to the aforesaid two demands it was agreed as under:

(1) That the Management has agreed to increase the wages of all the permanent workers by Rs. 15 per month who have completed one year continuous service and are on the roll of the company on the day writ this settlement is signed .

(2) That the demand of Dearness Allowance is withdrawn by the Union since the Management is already giving cost of living allowance @ Rs. 35 per month to those workers who are entitled for the same in accordance with law".

4. Subsequently Employees Cost of Living (Relief) Amendment Act, 1974 was passed and published in the Gazette of Pakistan Extraordinary dated 10-9-1974. It was enforced with immediate effect. By this Act an additional cost of living allowance at the rate of Rs. 50 per month or 10 of the monthly wages whichever was more if the wages did not exceed Rs. 1,000, was granted. To this a proviso was added which reads as under: -

Provided that, if, at any time commencing on or after the first day of August 1973, but preceding the commencement of the said Ordinance or, as the case may be, commencing at or after the commencement of the said Ordinance but preceding the commence ment of the Employees' Cost of Living (Relief) (Amendment) Act, 1974, any employer has paid, or become liable to pay, whether by virtue of an award, decision, agreement, settlement, contract, custom or usage, to any employee, in respect of any period, any sum of money, which is intended to provide relief due to a rise in the cost of living, such employer shall not be required to pay to such employee in respect of such period any amount in excess of the difference, if any, between the amount so paid by him or the amount which he has so become liable to pay, and the cost of living allowance payable to such employee.

On the basis of the above Act the employees demanded the additional cost of living allowance of Rs. 50 per month but the Management declined and proceeded to deduct Rs. 15 per month allowed under the aforesaid settlement on the basis of the proviso as according to the Management the increase of Rs. 15 p.m. was as a relief towards the cost of living. On account of this the mien made the present application for the interpretation of the settlement.

5. I have heard the arguments of the learned counsel appearing on behalf of the parties and it is clear to me that the amount of Rs 15 was expressly granted as increase in the wages and not as a relief towards the cost of living and, therefore the Management is not entitled to deduct the amount.

6. In this view 1 am supported by the Charter of Demands as well as the settlement which have been reproduced. In the Charter of Demands two demands had been separately made. One pertained to the increase in wages and the other in the cost of living. An increase of Rs. 15 towards the wages was agreed but so far the Dearness Allowance was concerned it was abandoned by the Union as Employees' Cost of Living Act, 1973 was passed whereby cost of living was allowed at the rate of Rs. 35 p.m. It was no where stated in the settlement that Rs. 15 was to be treated or intended to be an increase on account of cost of living. Furthermore the wages of those workers were increased who had completed one year of continuous service, where by the workers Who had put in less than one year service were denied of this benefit. This further supports my view as otherwise if the benefit was intended as a relief towards the cost of living then there was no reason to make any discrimination between the two categories of employees but it should have been granted to all the employees irrespective of the period of their service.

7. So the contention of the Management that Rs. 15 were granted as a relief towards the cost of living and were liable to be deducted cannot be accepted.

8. The learned counsel for, the Management also raised two legal pleas. He urged that it was not a case of interpretation of settlement as there was no ambiguity but it was a case of interpretation of the law relating to the cost of living. I am unable to accept this contention for the reason that the dispute relates to the benefit granted under the settlement as to whether the increase or Rs. 15 was granted as increase in the wages independently of the cost of living or it was allowed as a relief towards the cost living. There is no question of the interpretation of any legal provision with to the cost of living.

9. The next contention that was raised that the present application was not maintainable as it was not a question of interpretation but the claim related to the right guaranteed under the Employees' Cost of Living Act and the Union ought to have approached the Labour Court under section 34 of I. R. O. This contention too cannot be accepted as section 34 is applicable to a case where there is no dispute with regard to the right itself but in the present case the dispute relates to the settlement, in other words the question is as to whether the benefit allowed under the terms of the settlement was intended to grant relief towards the cost of living or whether it was purely as an increase in the wages.

10. In the result the reference stands disposed of in the light of what has been stated above.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.