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Application No. KAR‑514 of 1981, herd on 28^thSeptember, 1981.

‑‑‑ S. 3 (5) (a) (as amended vide Employees' Cost of Living (Relief) (Amendment) Ordinance (XXV of 1981)‑Allowances and benefits admissible under settlement‑Conditions‑Settlement should have been announced and become effective on or after 1st January, 1981‑‑-Settlement arrived at on 22nd March, 1981 but made expressly effective from 1^stDecember, 1980‑Benefits thereunder payable from 1^stDecember, 1980 and its duration also commencing from same date‑Set‑off' of allowances payable under such settle ment, held, not permissible.

Messrs Pakistan Tobacco Company Limited, Karachi v. Sind Labour Appellate Tribunal and another 1981 P L C 482 ref.

Sher Afgan for Appellant,

Date of hearing: 28^thSeptember, 1981.

This purports to be an application under section 50, 1. R. Cf., for the interpretation of the provision of a settlement arrived at between the applicant‑Company and its C. B. A. on 22nd March, 1981. Although the said settlement was actually arrived at and signed on 22nd March, 1981, the effective date of settlement, as appears from paragraph 14 of the settlement, is 1st December, 1980 and the settlement according to the said paragraph is to remain in force up to 30th November, 1982. The settlement inter alia provides for the merger of the Dearness Allowance of Rs. 50 per month previously payable to the workmen of the applicant Company into their basic wages with effect from 1^st December, 1980 and further provides for payment to workmen of Dearness Allowance of Rs. 50 p. m. It is claimed that a dispute has arisen between the Company and the workmen whether the Company is entitled to set off the cost of living allowance payable under subsection (5) of section 3 of the Employees Cost of Living (Relief) Act, 1973, against the cost of living allowance of Rs. 50 payable to the workmen under paragraph 2 of the settlement. It is claimed by the Company that it is entitled to do so as the settlement under which it was payable was arrived at on 22nd March, 1981, and further the said cost of living allowance has been granted on account of increase in the cost of living.

2. Now set off under the aforesaid subsection is allowed only in the two cases specified in the first proviso therein which reads as follows :‑‑

Provided that the said Cost of Living Allowance shall be set off‑

"(a) against the amount payable as a relief due to rise in the cost of living under an agreement or settlement reached, or an award given, under the Industrial Relations Ordinance, 1969 (XXIII of 1969), which has been announced and become effective on or after the first day of January, 1981, or which is announced and becomes effective within a period of one year of the commencement of the Employees' Cost of Living (Relief) (Amendment) Ordinance, 1981 ; and

(b) against the amount payable under an agreement or settlement reached and in force on the first day of July, 1981, under which employees get increase at regular intervals on the basis of a rise in the cost of living : "

3. Clause (b) of the proviso is admittedly not applicable to the facts of the present case. Mr. Sher Afgan, the learned counsel of the applicant‑Company, however, relied on clause (a) of the aforesaid proviso. The essential requirements for the application of the said clause, however, are‑‑‑

(a) that the amount payable under agreement should be as a relief due to rise in the cost of living ; and

(b) that the agreement under which the said amount is payable should have been announced and became effective on or after the first day of January, 1981

or

or a settlement which is announced and becomes effective within the period of one year of the commencement of the Employees' Cost of Living (Relief) (Amendment) Ordinance, 1981, which was promulgated on 28th June, 1981:

Although the agreement in question was executed and arrived at after the first day of January, )981, the date from which it commenced to be, operative is specifically stated to be 1st December, 1980. As such it does not fulfil the second requirement for the application of proviso (b) of sub section (5) of section 3 of the Employees' Cost of Living (Relief) Act. 1973. A similar issue arose in the case of United Mills Workers' Union and others v. United Woollen Mills Ltd., decided on 25th May, 1980, wherein it was held that though the settlement was arrived at on 16th July 19813 it was made effective retroactively from 1st July, 1979, and consequently, set off under the Act was not permissible. The view taken by this Tribunal under the above case was upheld by the High Court in the case reported as Messrs Pakistan Tobacco Company limited, Kararchi v. Sind Labour Appellate Tribunal and another (1981 P L C 482).

3. For the reasons discussed by me above, I am of the view that no difficulty or doubt arises as to the interpretation of the settlement in question. I would, accordingly, dismiss this application in limine.

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