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Application No. KAR‑353 of 1974, decided on 12th January 1977.

‑‑ S. 50 read with S. 34‑Interpretation of settlement‑Disputed question of fact as to intention of parties‑Can be resolved only on basis of evidence extraneous to document of settlement‑Decision on rights and obligations of parties on basis of evidence‑Does not fall under S. 50 and not within function of Tribunal‑‑Such ques tion can be properly adjudicated by Labour Court under S. 34.

Malik M. Saeed for Applicant.

A. A. Shareef for Respondent.

Date of hearing : 29th December 1976.

This is an application made by the Union under section 30 of the Industrial Relations Ordinance, 1969 for interpretation of the settlement dated 3rd January, 1974.

2. The respondent is Volkart (Pakistan) Ltd., a company incorporated under the Companies' Act, having its Registered Office at Karachi and some branches in Pakistan. The Company is running a cotton factory at Mirpur Khas. The employees of Mirpur Khas factory have made the present application.

3. There had been settlements between the parties from time to time. The last settlement expired on 16th May, 1974. Consequently, on expiry of that settlement a notice under section 26(1) of the Industrial Relations Ordinance alongwith the Charter of Demands was served upon the Manage ment. During the course of the negotiations a letter dated 19th July, 1973 was sent by the Union to the Management in which it was mentioned that in view of the increase in the cost of living the Union was not prepared to accept any increase in salary by less than 20 %. As a result of dialogue a settlement was reached on 4th June, 1974, whereby the increase in pay and other benefits were granted. The settlement was signed by both the parties.

4. Subsequently, Employees' Cost of Living (Relief) Amendment Act No. XLVII of 1974 was passed by the Parliament and received the assent of the President on 7th September, 1974 whereby cost of living allowance was allowed at the rate of Rs. 50 per month or 10 % of the monthly wages whichever is more if the wages of the workman do not exceed Rs. 1,000. On the basis of this enactment the Union demanded the cost of living allowance but the Management declined on the ground that the increase in wages was on account of the increase in the cost of living, and, therefore, according to the Enactment the same was to be adjusted. The position taken by, the Management was not accepted by the Union and, therefore, they made the present application.

5. Before I proceed to consider pleas advanced by the parties, I would like to reproduce section 5 of the Employees' Cost of Living (Relief) Amendment Act, 1974, which reads as under :‑

"8. Saving of certain rights and privileges.‑Nothing in this Act shall affect any right or privilege to which an employee was entitled,‑

(a) in the case of the cost of living allowance payable under sub section (1) of section 3, immediately before the commencement of the Employees' Cost of Living (Relief) Ordinance, 1973 (XXII of 1973).

(b) in the case of the cost of living allowance payable under sub section (2) of section 3, Immediately before the commencement of the Employees' Cost of Living (Relief) (Amendment) Act, 1974, under any law for the time being in force or under any award. decision, agreement, settlement, contract, custom or usage in force immediately before such commencement ;

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 commencement 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 employees 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 be has so become liable to pay, and the cost of living allowance payable to such employee.

Explanation.‑For the purpose of this proviso, any increase in wages accruing by virtue of the usual annual increment or promotion to a higher grade, or an allowance not specifically given to provide relief due to a rise in the cost of living, shall not be deemed to be an increase intended to provide relief due to a rise in the cost of living."

By reading this section it is plain enough that according to the proviso any sum of money which has been paid or is payable and is intended to provide relief due to rise in the cost of living, shall be adjusted. It, therefore, follows that it is necessary that there should be an intention to provide the relief due to rise in the cost of living. Then comes explanation which excludes the annual usual increment or promotion to a higher grade or an allowance not specifically given to provide relief due to rise in the cost of living from considering a relief for the purpose of adjustment. Thus a clear distinction has been laid down between the increase in wages and increase in the allowance. So far the increase in wages is concerned, there must be intention to provide the relief due to a rise in the cost of living, though, not specifically provided as such in the award, decision, agreement, settlement, contract, custom or usage. However, the position with regard to the increase in allowance is quite different as it is not the mere intention to determine whether the increase was allowed as a result of the rise in the cost of living but it must be specifically stated so in order to allow the Management to adjust the same against the relief granted by the Cost of Living (Relief) Act. This distinction is very pertinent and cannot be ignored in interpreting the settlement or other documents.

6. On perusal of record and hearing of the arguments I am of the view that this reference is misconceived. It is not a mere question of interpretation of the document embodying the terms of settlement but the dispute centres round the intention of the parties as to the object for which the benefits had been allowed. There is absolutely no indication of any kind in the document of settlement. So in order to settle the question of the intention reliance has been placed upon certain other documents including the affidavits besides the dialogue between the parties for reaching the settlement.

7. Thus it is not a pure question of the interpretation of the document of settlement but it is a disputed question of fact as to intention of the parties. This can be resolved only on the basis of the evidence extraneous to the aforesaid document of settlement. To decide the rights and obligations of the parties on the basis of evidence is hardly the case falling under section 50, Industrial Relations Ordinance. It is not the function of this Tribunal to examine evidence in order to find out the intention. This can be properly adjudicated by the Labour Court under section 34, Industrial Relations Ordinance. The Union may, therefore, approach the Labour Court having jurisdiction, if so advised, to seek the redress.

8. In the circumstances the reference is rejected.

Reference rejected.

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