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Application No. 419 of 1981, heard on 19th August. 1981.
‑‑--S. 3 (4)‑Cost of living allowance‑Set‑off of amounts payable under settlement‑Conditions prerequisite‑Settlement should have been announced o4 or after 1st January, 1980 and it should have become effective on or after 1stJanuary, 1980‑Settlement executed on 26th June, 1980 expressly stating benefits there under to be granted and be effective from 1st September, 1979 and duration of settlement be 2 years from 1st September, 1979‑Effec tive date of settlement, in circumstances, held 1st September, 1979 and not 26thJune, 1980‑Essential requirement for setting off cost of living allowance payable statutorily, held, not fulfilled hence management not entitled to set off statutory allowance against monetary benefit conferred by settlement‑Contention of management to pay only difference between benefits admissible under settlement and statutory cost of living allowance, in circum stances, rejected‑Settlement‑Effective date‑‑Interpretation of settlement‑Industrial Relations Ordinance (XXIII of 1969), S. 50.
Maxwell's Interpretation of Statutes, XIth Edn. pp, 204 & 396 ref.
Pakistan Tobacco Co. Ltd. and another v. Sind Labour Appellate Tribunal 1981 P L C 482 rel.
Abdul Majeed for Applicant.
Rafat Usmani for Respondent.
Date of hearing: 19thAugust, 1981.
The short point which falls to be considered in this reference under section 50, I. R. O., is whether the effective date of the settlement reached between the parties on 26th June, 1980, is the date on which it was execute, or the 1st September, 1979, from which date the benefits there under have been made effective.
2. An industrial dispute relating to demands made by the Collective Bargaining Agent in the Aspro Nicholas (Pak.) Ltd., the respondents herein, and the management having occurred, the dispute was referred for conciliation. During the course of the conciliation proceedings, a settle ment was reached between the parties on 26thJune, 1980. The settlement bears the signatures of parties as also the Joint Director (Labour), through whose efforts the settlement was reached. The settlement provides for the grant of a number of benefits to the workmen including increase in wages. These benefits have been made effective from 1st September 1979. Paragraph 17 of the settlement makes this intention further clear and reads as follows :‑‑
"17. Effective date. It is agreed that all the benefits and terms of employment conferred upon and agreed to under this settle ment shall be effective from 1st September. 1979, except as otherwise specifically provided in any of the terms of the settlement."
3. Paragraph 18, specifying the duration of the settlement is also important and it expressly provides "that this settlement will remain in force and would continue to be binding on the parties for a period of two years, i.e. from 1st September, 1979 to 31st August, 1981.
4. The case of the applicant‑Union is that the workmen were entitled not only to the benefits under the settlement, but also to the cost of living allowance of Rs. 40, statutorily payable under subsection (4) of section 3 of the Employees' Cost of Living (Relief) Act, 1973, and that the company is not entitled to set off such an allowance or any part thereof against the benefits payable under the settlement. On the other hand, the case of the company is that it is required to pay only the difference between the monetary benefits payable under the settlement and the Cost of Living Allowance payable under the aforesaid subsection and not the benefits in addition to the Cost of Living Allowance, as claimed by the workmen.
5. It was pointed out by this Tribunal in the case of Prince Glass Works Ltd. v. Prince Glass Mazdoor Union, decided on 27th August, 1980, that "it appears that the Legislature has prescribed two important qualifications for the settlement, agreements and awards amounts payable under which can be set off or adjusted against the Special Cost of Living Allowance payable under the Amending Ordinance. They are firstly that the settlement, agreement or award should be announced on or after 1stJanuary, 1980, and secondly, that it should become effective on or after the said date, or alternatively it should be announced and become effective within on year of the coming into force of the Amending Ordinance." The firs requirement, namely, announcement of the settlement being on or after 1stJanuary, 1980, undoubtedly is fulfilled in the instant case. However, the dispute is whether the second requirement is also fulfilled, Mr. Rafat A Usmani sought to argue that it was immaterial from what date certain benefits under the settlement were being granted. According to him, since the settlement itself was reached on 26thJune, 1980, therefore, the effective date of the settlement cannot be earlier than the date on which the settlement itself was reached but can only‑be either the date of the execution or a subsequent date. Support for this proposition was sought from the following paragraph at page 396 of Maxwell's Interpretation of Statutes, XIth Edition.
"A statute takes effect from the first moment of the day on which it is passed, unless another day be expressly named in which case it comes into operation immediately on the expiration of the previous day."
The above paragraph, however, lends no support to the contention of Mr. Rafat Usmani, for it makes clear that it is only in those cases where another date is not expressly named for the commencement of the Statute, that it will take effect from the first moment of the day on which it was announced. However, if another date is mentioned, retrospectively or a date in future, the Statute will take effect from the said date. The practice of issuing of retrospective Statutes is well established in Pakistan and in other counrties at page 204 of Maxwell's Interpretation of Statutes, it is stated as follow:‑---
"It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construc tion appears very clearly in the terms of the Act, or arises by necessary and distinct implication."
6. In the instant case, not only it is expressly stated in respect of every benefit granted under the settlement that it would be granted and became effective from 1st September, 1979, but further paragraph 17 of the settlement, which is applicable to the entire settlement, very clearly states that the benefits and the terms of employment provided under the settlement would be effective from 1stSeptember, 1979. The intention that the settlement was effective from 1st September, 1979, is made clear beyond any doubt by paragraph 18 of the settlement which provides that the duration of the settlement would be 2 years with effect from 1st September, 1979 to 31st August, 1981.
7. As one of the essential requirements for setting off the Cost of Living Allowance payable under subsection (4) of section 3 of the Em ployees Cost of Living (Relief) Act, 1973, is wanting in the instant case, it will not be permissible or lawful for the respondent company to set the allowance payable under the said subsection against any monetary 8 benefits conferred by the settlement. I am fortified in this view by the decision of a Division Bench of the Karachi High Court in the cases Pakistan Tobacco Co. Ltd. and another v. Sind Labour Appellate Tribunal (1981 P L C 482), wherein it was observed as follows :‑
"Under para. (a) to the proviso an employee claiming adjustment must satisfy two conditions‑(s) that the agreement, settlement or award should have been made or announced on or after the first day of January, 1980, and (ii) that it would have become effective on or before 1st January, 1980. It is, therefore, clear that in order to avail of the benefit of the proviso the settlement should have been made or announced and also become effective on or after 1stof January, 1980. All settlements and awards, which were made announced or became effective from the year 1979, have been excluded from the operation of the Proviso and the employees cannot claim set off. The language of the proviso is clear and unambiguous. Its literal meaning is decidedly in favour of the employees and in conformity with the legislative intent set out specifically in the preceding paragraphs, which we need not repeat here. It is a beneficial 16gislation for the benefit and welfare of the workers. We are therefore not inclined to accept any interpreta tion which may deprive them of the benefits."
8. I am, therefore, of the view that the contention of the respondent Company that it was required to pay only the difference between the benefits admissible under the settlement and the Cost of Living Allowance payable under subsection (4) of section 3 of the Act, i.e. to set off the Cost of Living Allowance payable under the said subsection against the monetary benefits payable under the said settlement is without any force. It is clearly required, as the law presently stands, to pay and grant not only the benefits specified in the said settlement, but also the Cost of Living Allowance as admissible under the aforesaid subsection.
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