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Appeal No. 12(24) of 1975, decided on I lth December, 1975.

-- S. 2 (xiii) read with West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance (VI of 1968), S. O. 10-C Bonus - Bonus prescribed under S. O. 10-C-A minimum bonus-No bar to claim of workers for bonus at higher rotes-Such claim can be raised by way of industrial dispute.

It was contended that after the insertion of S. O. No. 10-C in the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordi nance, 1968 vide Labour Laws (Amendment) Ordinance, 1972 workmen cannot claim profit bonus other than the one provided in clause (I) of S. O. No. 10-C and since this clause already guarantees and secures the right of workmen to receive profit bonus, section 2 (xiii) of the Industrial Relations Ordinance, 1969 excludes a dispute therefor from the definition of industrial dispute because according to section 2(xiii) a dispute which is raised for enforcement of any right guaranteed or secured to the workmen under any law other than the Industrial Relations Ordinance, 4969 is not an industrial dispute.

Held: In the first instance S. O. 10-C of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 nowhere provides that the workmen are not entitled to receive bonus beyond the limits provided for by S. O. 10-C, clause (1). Secondly, independently of S. O. i0-C, the workmen claim any amount as bonus depending upon the profit earned by the employer in a particular year, as by various judicial pronouncements on the subject and the practice followed by the industries, bonus has now come to be recognised as the workmen's share in the profits earned by the employer and an integral part of the terms and conditions of their (the workmen's) employment; but under clause (1) of the S. O. 10-C, only bonus payable to the workmen is the one equal to their one month's wages or 3a per cent of the total profit earned by the employer, whichever is lower, The bonus payable to the workmen otherwise than under S. O. 10-C, clause (1), therefore, can be much higher than the one payable under the said Standing Order because no limits have been prescribed for the former. Now, S. O. 10-C has been inserted in the Standing Orders Ordinance for the welfare of workers and this is evident from the Preamble to Labour Laws (Amend ment) Ordinance, 1972, by which S. O 10-C has been inserted for the first time in the Standing Orders Ordinance.

It can therefore hardly be understood as to how a provision which has been made in the law for the "welfare of workers" can adversely affect the right to which they are already entitled.

What S. O. 10-C seem, to provide is, a minimum guarantee to the workmen in respect of bonus but it in no case whittles away their right to receive bonus higher than the one provided for in S. O. 10-C, clause (1) if they are entitled thereto. Furthermore, clause (4) of S. O. 10-C, clearly lays down that the workmen can claim any bonus other than the one provided for in clause (1) to which they may be entitled in accordance with the terms of their employment or any usage or any settlement or an Award of the Labour Court established under the I. R. O. That would consequently mean that the workmen can receive profit bonus other than the one provided for under clause (1) of S, O. 10-C and can raise a dispute in respect thereof.

Since the only bonus guaranteed to the workmen is the one under clause (1) of S. O. 10-C, and the dispute raised is obviously not for that bonus, the argument that the dispute raised by the respondents is not an industrial dispute as contemplated by section 2(xiii) of the Industrial Relations Ordinance, 1969 becomes completely devoid of any force.

S. M. Yaqoob for Appellants.

S. M. Khadim for Respondents.

Date of hearing: 16th July 1975.

-Silver Cotton Mills Limited, the above named appellants, have called in question an Award dated 28-5-1975, given by the learned Chairman, allowing forty-five days wages as bonus to their work men. A dispute for payment of one-hundred-and-eighty days' wages as bonus to the workers for the financial year 1973-74, had arisen between the appellants and their workmen, represented by the above-named respondents which was referred to this Commission by the Federal Government as a dispute of national importance. The learned Chairman, after hearing the said dispute announced the Award which has now been challenged in this appeal before us.

2. The contention of the appellants before us, as well as the learned Chairman has been, that the appellant-mills had suffered a loss equal to Rs. 1,27,422, during the year for which the bonus was claimed therefore the appellants were absolved from any liability to pay bonus to the workers. The profit and loss account produced by the appellants before the learned Chairman (Exh. R/12) shows a figure of Ids. 98,181,17, as profit but as will be borne out by Exh. R/12, it was arrived at without taking into account the depreciation allowance allowable under the Income-Tax Laws. The two witnesses examined by the appellants before the learned Chairman had clearly stated that in case the depreciation allowance was deducted from the said profit, it would show loss equal to Rs. 1,27,402 as stated above.

3. While giving the Award the learned Chairman did not take into consideration the plea advanced by the appellants but instead arrived at his own figure of Rs. 40,28,715 which was calculated by him to be the profit earned by the appellant-Mills. This amount was calculated on the basis of the statement of the General Manager of the appellant-Mills recorded by him, who in reply to a question put by the learned Chairman off handedly stated that twenty lakhs yards of cotton cloth worth about Rs. sixty lakhs had been piled up in the stocks of the mills. Here it may be pointed out that in Exh. R/12, a figure only of Rs. 18,43,370 has been shown as the value of the stocks of the finished cloth lying at the end of the year 1973-74, in the mills. The learned Chairman therefore concluded that the last mentioned figure was not correct in view of the reply given by the appellants' General Manager and as the difference between the two figures i.e., the one stated by the General Manager and the other in Exh. R/12 was worked out by the learned Chairman to be Rs. 40,28,715, he concluded that that was the actual profit earned by the appellant-Mills and announced his Award accordingly.

Challenging the Award Mr. S. M. Yaqoob, the learned representative appearing on behalf of the appellants has argued that the dispute raised by the respondent is not an "industrial dispute" as defined by section 2 (xiii) of the I. R. O., therefore the entire proceedings before the learned Chairman and the Award given by him are without jurisdiction. In this respect Mr. Yaqoob has raised a two-fold argument. First of all he has contended that after the insertion of S. O. 10-C in the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, the workmen cannot claim profit bonus other than the one provided for by clause (1) of S. O. 10-C; and thereafter he has further contended that as clause (1) of S. O. 10-C already guarantees and secures the right of the workmen to receive profit bonus, section 2 (xiii) of the I. R. O. excludes a dispute in respect thereof from the definition of industrial dispute, as according to that a dispute which is raised in respect of enforcement of any right guaranteed or secured to the workmen under any law other than the I. R. O. or any Award, or settlement for the time being in force, is not an industrial dispute. Section 2 (xiii) of the I. R. O. is as under

2. .

(xii) Industrial Dispute means any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen which is concerned with the employment or non-employment or the terms of employment or the conditions of work of any person; and is not in respect of the enforcement of any right guaranteed or secured to him by or under any law, other than this Ordinance, or any award or settlement for the time being in force;

Before going into the contention raised by the learned representative, I may reproduce S. O. 10-C also which is as follows

10-C. Payment of bonus.-(1) Every employer making profit in any year shall pay for that year within three months of the closing of that year to the workmen who have been in his employment in that year for a continuous period of not less than ninety days a bonus in addi tion to the wages payable to such workmen.

(2) The amount of the bonus payable shall-

(a) if the amount of the profit is not less than the aggregate of one month's wages of the workmen employed, be not less than the amount of such aggregate, subject to the maximum of thirty per cent of such profit.

(b) if the amount of the profit is less than the aggregate referred to in paragraph (a), be not less than fifteen per cent. of such profit.

(3) The bonus payable to a workman shall bear to his monthly wages the same proportion as the total bonus payable by the employer bears to the aggregate of the wages referred to in paragraph (a) of clause (2) and shall be paid either in cash or in N. I. T. Units of equivalent value at the option of such workman.

(4) Nothing in this section shall be deemed to affect the right of any workman to receive any bonus other than that payable under clause (1) to which he maybe entitled in accordance with the terms of his employment or any usage or any settlement or any award of a Labour Court established under the Industrial Relations Ordinance, 1969 (XXIII of 1969)."

5. As far as this argument of the learned representative is concerned, he himself has failed to offer any cogent reason in support thereof, but looking at it even otherwise, we hardly find any force in it.

6. In the first instance S. O. 10-C nowhere provides that the work men are not entitled to receive bonus; beyond the limits provided for by S. O. 10-C, clause (1). Secondly, independently of S. O. 10-C, the workmen can claim any amount as bonus depending upon the profit earned by the employer in a particular year, as by various judicial pronouncements on the subject and the practice followed by the industries, bonus has now come to be recognised as the workmen's share in the profits earned by the employer and an integral part of the terms and conditions of their (the workmen's) employ ment; but under clause (1) of tile S. O. 10-C, the only bonus payable to the workmen is the one equal to their one month's wages or 30 per cent of the total profit earned by the employer, whichever is lower. The bonus payable to the workmen otherwise than under S. O. 10-C, clause (1),4 therefore, can be much higher than the one payable under the said Standing Order because no limits have been prescribed for the former. Now S. O. 10-C has been insexted in the Standing Orders Ordinance for the "welfare of, workers" and this is evident from the Preamble to Labour Laws (Amendment) Ordinance, 1972, by which S. O. 10-C has been inserted for the first time in the Standing Orders Ordinance. The Preamble reads as follows -

Whereas it is expedient further to amend certain laws relating to Industrial relations and welfare of workers;

And whereas the national interest of Pakistan in relation to the economic and financial stability of Pakistan and the achievement of uniformity requires Central legislation in the matter; Now, therefore, in pursuance of the Proclamation of the 20th day of December, 1971, and the Provisional Constitution Order, and in exercise of all powers enabling him in that behalf, the President is pleased to make and promulgate the following Ordinance.

It can therefore hardly be understood as to how a provision which has been made in the law for the welfare of workers can adversely affect the right to which they are already entitled. It hardly needs to be mentioned that labour laws in Pakistan are progressive in nature. To my mind therefore, what S. O. 10-C seems to provide is, a minimum guarantee to the workmen in respect of bonus but it in no case whittles away their right to receive bonus higher than the one provided for it S. O. 10-C, clause (1), if they are entitled thereto. Furthermore, clause (4) of S. O. 10-C, C clearly lays down that the workmen can claim any bonus other than the one provided for in clause (1) to which they may be entitled in accordance with the terms of their employment or any usage or any settle Court established under the I. R. O. That would consequently mean that the workmen can receive profit bonus other than the one provided for under clause (1) of S. O. 10-C and can raise a dispute in respect thereof, as bonus referred to in clause (4) can even be a profit bonus, and as already pointed out above, bonus being recognised as an implied term or condition of the workmen's employment, the workmen's right to claim bonus other than and higher than the one provided for in clause (1) cannot be affected by the said clause as such a right has clearly been protected by clause (4) of S. O. 10-C. Coming to the argument advanced by the learned representative for the appellants, since the only bonus guaranteed to the workmen is the one under clause (1) of S. O. 10-C, p and the dispute raised by the respondents is obviously not for that bonus, the argument advanced that the dispute raised by the respondents is not an industrial dispute as contemplated by section 2 (xiii), becomes completely devoid of any force.

7. The next contention of Mr. S. M. Yaqoob is that the learned Chairman could not add the latest stock position of finished cloth lying in the Mills to that at the end of financial year 1973-74, and increase the profit of the mills, because the bonus was claimed only for the year 1973-74. The argument advanced by the learned representative is that the position at the end of the said financial year was clearly shown by the statement of accounts (Exh. R/ 12) and there was no other evidence produced in rebuttal by the respondents.

8. From the perusal of the General Manager's statement, it cannot be understood as to what drove the learned Chairman to the necessity of asking a question in respect of the latest position of stocks piled up in the mills because the same vis-a-vis the finished cloth has been clearly shown in Exh. R/12. However, since the witness gave a categorical answer, it may not be ruled out of consideration. That may be as that, but the fact still remains that the answer given by the witness in no manner changes the position qua the stocks of finished cloth shown in Exh. R/12, because what was to be considered was not the latest position of stocks at the time of the hearing of the case by the learned Chairman, but the same at the end of the financial year 1973-74, for which the bonus was claimed and that is clearly shown by the statement of accounts (Exh. R/12) which stands unrebutted by the respondents. Under the circumstances we have to accept Exh. R/12 as a correct statement of accounts. That being the position, we should not have any hesitation in agreeing with the argument advanced by Mr. S. M. Yaqoob that the con clusion of the learned Chairman qua the profit earned by the appellants in the year 1973-74, is on the face of it erroneous.

9. This leaves us with the next question as to whether or not the appellants had suffered loss as stated by their witnesses.

10. The Accountant of the appellant-Mills has categorically stated that depreciation is allowed by the Income-Tax department and in the case of the appellants, the department has always been allowing it at higher rates than the ones claimed by the appellants themselves. This statement has also not been challenged in the cross-examination by the respondents. When we look at the account-sheets of the previous years produced in evidence by the appellants (Exh. R/9, R/10 and R/11), depreciation was claimed by the appellants at Rs. 4,77,165.50 in 1971, Rs. 9,17,436 in 1972 and Rs 8,48,788 in 1973, and allowed by the Income-tax department. The depreciation claimed by the appellants for the year in question i.e. 1973-74, is very much on the lower side than the amount shown above. The amount claimed as depreciation therefore by no means appears to be unreasonable. Although it has not been shown in the profit and loss statement (Exh. R/12), I still do not see any reason as to why the appellants should be disallowed to claim it on the debit side since the amount is allowable under the law. If this figure is off-set against the profit shown to have been earned by the appellants, it obviously will not leave any amount on the profit side so as to entitle the workers to claim profit bonus from the appellants.

11. Under these circumstances, the Award dated 28-5-1975, given by the learned Chairman seems to be basically erroneous as bonus can only be awarded in case of profit and there being no profit earned by the Mills, the question of distribution of bonus by the appellants does not arise.

12. This appeal must therefore be allowed and the said Award of the learned Chairman set aside. The appellants in that event would be at liberty to recover any amount paid to the workers under the said Award.

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