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Application No. KAR‑711 of 1981, heard on 18th February, 1982.

-----S. 50 read with Employees' Cost of Living (Relief) Act, 1973 (I of 1974), S. 3(5)‑Increase in wages or allowances payable under settlement or award‑Whether subject to set‑off, towards additional cost of living allowance admissible under Employee' Cost of Living (Relief) Act, 1973‑‑Necessary examination and interpretation of settlement or award to find out whether increase was a relief due to rise in cost of living‑Within purview of Appellate Tribunal under S. 50 of Industrial Relations Ordinance, 1969‑Attendance allow ance paid to ensure reqularity in attendance of workmen ‑Con veyance allowance paid at uniform rate‑Increase in such allow ances given in settlement not perceivably having any bearing upon or relationship with rise in cost of living‑Not subject to set‑off.

F. M. Azad for Applicant.

H. A. Jafri for Respondent.

Date of hearing: 18th February, 1982.

This is an application under section 50, LR O. seeking interpretation of an award made by the learned Vth Labour Court, on 13th May, 1981 in terms of an agreement between the parties reached on or about 23^rd April, 1981. The necessity for the making of this application, according to the applicant union, has arisen, because whereas the Union interprets the settlement as awarding to the workmen increase in attendance allowance and conveyance allowance, as also other benefit, on grounds other than the rise in the cost of living, the claim of the 'respondent company is that the said increases have been made on account of rise in the cost of living, and consequently the cost of living allowance of Rs.40 payable to workmen under subsection (5) of section 3 of the Employees' Cost of Living (Relief) Act, 1973, is to be set off against the said increases in the allowances.

2. I have heard Mr. F. M. Azad, the learned representative for the applicant union, and Mr. H. A. Jafri, the learned counsel for the res pondent company. A preliminary objection was raised by Mr. Jafri to the maintainability of this application to the effect that it seeks interpre tation of the provisions of the Employees' Cost of Living (Relief), Act, 1973, and not of the provisions of the settlement. The objection is misconceived. Set off under subsection (5) of section 3 of the aforsaid Act of the additional cost of living allowance is permissible A only if the increase in wages or allowance provided under the settlement award has been given as a relief due to rise in the cost of living. As such: it is necessary to examine and interpret the provisions of the settlement to, find out whether the increase in wages and allowance is payable as a relief due to rise in the cost of living. A similar contention was revised in the case of Prince Glass Works Ltd: v. Prince Glass Workers Welfare Union. (Application No. KAR 449/81), decided on 13th October, 1981. Rejec ting this objection made on behalf of the company. it was observed by this Tribunal as follows :‑

"Mr. Ashraf Hussain has raised a two fold objection to the maintain ability of the present application. His first objection was that there was neither any doubt for difficulty regarding the interpretation of the provisions of the settlement and that any doubt or difficulty that might exist was in regard to the interpretation of the provisions of subsections (4) and (5) of section 3 of the Act, for set off of the allowances payable .to workmen under the said subsections. It may, however, be pointed out that the provisions of a settlement or an agreement are not to be construed in isolation or in vacuum out with reference to the law which is applicable to the same. If a law declares that certain provisions of an agreement are void, unreasonable or can only be enforced under certain conditions of said law. Now subsections (4) and (5) of section ‑3 of the Act, provide that the Cost of Living Allowance payable under the said subsection can be set off against certain and enforced from particular dates. The payment of the allowances under the said subsection or the right to set off the said allowances are, therefore, dependent upon the interpretation of the provisions of the settlement relied upon by the parties. As such, wherever there is a claim for set off either under subsection (4) of subsection (5) of section 3, it would normally involve the question whether the requirements for making the set off have been fulfilled and this in turn will depend u on the provision contained in the settlement or agreement which is made the basis of the claim for set off. I am, therefore, of the view that' in the instant case, there is a doubt and difficulty about the provisions of the settlement, arrived at between the parties, which requires to be resolved by this Tribunal in the exercise of its powers under section 50, I. R. O."

3. Coming to the merits of the case, it may be mentioned that according to the agreement, which was incorporated in the award of the learned Vth Labour Court, apart from other benefits allowed to the work men of the respondent company, the attendance allonance was increased by Rs.8 from Rs.15 to Rs.23 and the conveyance allowance was increased by Rs.10 from Rs.20 to Rs.30. There is nothing in the agreement to suggest that the increase in these allowances was given to provide relief against rise in the cost of living nor is there any other evidence from which such intent can be reasonably inferred. On the contrary, there are indications in the settlement itself suggesting that the increase in these 2 allowances was not given for the purpose of providing relief against the rise in the cost of living. Clause (4) of the agreement, relating to the demand for increase in wages, states that this demand was not pressed by the union in view of the fact that the Government had allowed additional cost of living allowance of Rs.40 per month with effect from 1st July, 1980. It thus appears that though the rise in the cost of living was considered as also the question of set off allowed under subsection,(5) of section 3 of the Employees' Cost of Living (Relief) Act, 1973, these considerations were limited to the claim for additional wages and did not extend to the increase in allow ances provided to the workmen. Moreover, attendance allowance is paid to ensure regularity in attendance of workmen, which in turn would result in 'better and more efficient production, and does not appear to have any perceivable bearing upon or relationship with the rise in the cost of living. Similarly, there is nothing to indicate that the increase in the conveyance allowance was given to provide relief against the rise in the cost of living. The increase was a modest one, being only Rs.10 per month. Furthermore, the allowance is paid at a uniform rate and is not related to or based either upon the distance at which the workman resides from the place of his work, or the mode or his transport or even the conveyance charges being made in Karachi.

4. 1 am, therefore, of opinion that the increase in both the atten dance allowance and house rent allowance to the workmen of the respondent sleet company suss not given to provide relief to the workmen against rise in the cost of living and hence would not b: subject to set off under the provisions of subsection (5) of section 3 of the Employees' Cost of Living (Relief) Act, 1973.

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