Lawyers Directory Listing
Unlock direct contact details for up to 10 lawyers so you can call or WhatsApp the right legal professional and move your matter forward with confidence.
Appeal No. JM‑503 of 1984, decided on 29th April, 1985.
‑‑‑S. 2(30)‑‑Wages‑‑House rent allowance‑‑Part of wages and not excluded from definition of wages.
1982 P L C 325 dissented from.
Zafar Malik for Appellant.
Farooq Ahmad for Respondent.
Date of hearing: 27th March, 1985.
The decision, dated 17‑7‑1984 passed by the learned Presiding Officer, Punjab Labour Court No. 6, Rawalpindi has been challenged whereby the grievance petition of the appellant union brought under section 34 of the Industrial Relations Ordinance, 1969 was dismissed.
2. A settlement was arrived at between the parties according tp clause 17, sub‑clause (1) of which the persons whose wages consisting of basic pay, cost of living allowance, house‑rent allowance and conveyance allowance exceeded Rs.1,000 were debarred from the benefits of social security and in lieu thereof Medical Allowance at 7 of the pay was paid. The persons whose wages were Rs.1,000 or less were entitled to the benefits of social security. The respondent notified that from 23‑12‑1982 house‑rent allowance would not be taken into account while calculating the wages for the purposes of Social Security Ordinance. It resulted in the decrease of pay to Rs.1,000 or even less than that of 119 employees and they lost 7 medical allowance. This caused a grievance to the appellant union. The notification issued by the respondent that from 23‑12‑1982 house‑rent allowance would not be included in the wages was no doubt a unilateral act but it was based upon the ruling of the High Court reported in 1982 P L C 325. It was observed in the said ruling that house‑rent allowance would not be included in the wages for the purposes of Social Security Ordinance. The act of the respondent in acting upon the ruling of the High Court was not illegal and, therefore, the appellant union could have no grouse. If there had been a stipulation cause in the settlement referred to above that the house‑rent allowance would be excluded from the wages at any time in the subsistence of the settlement, the respondent could not have excluded said allowance from the wages for the purpose of Social Security. Clause 17(1) does not say that house‑rent allowance would be taken as part pf the wages.
3. So far as the point whether house‑rent allowance is a part of wages or not is concerned, with great respect I do not find myself in agreement with the views of my learned brother the Single judge who decided the case reported in 1982 P L C 325. It has been observed that house‑rent allowance is not paid for the work done. One of the reasons is that it is paid even to the workers who due to some cause do not actually work or render service to the employer. No circumstances are mentioned in the judgment under which such allowance is paid to the workers also who actually do not render any service. So long as an employee remains in service and has not provided house accommodation, he is paid the house‑rent allowance at the end of the month. Needless to say that house‑rent allowance is paid only to those who are in service and as soon as the services come to an end remunerations including the house‑rent allowance are stopped. No doubt during leave period this kind of allowance is allowed but leave is a statutory right. It cannot be said that during the period of leave the employee concerned ceases to remain in service or is not available to render service. Employees earn right to leave after rendering service, therefore, every thing that is paid during leave is a reward or remuneration for the service already rendered. House rent allowance may be a subsidy and compensation to meet the costs of living charges but it is apparent that such a subsidy is paid as a reward for the services rendered. The definition of wages given in Factories Act is exhaustive and only those allowances are not part of wages that have not been expressly excluded. House rent allowance is not excluded. In the definition of 'Wages' given in Payment of Wages Act also house‑rent allowance is not excluded. Value of house accommodation has been excluded. Where house accommodation has been provided value of the said accommodation is not included in the wages. Value of the accommodation is different from house‑rent allowance. I, therefore, hold that the house‑rent allowance is included in the definition of wages) and, therefore, the respondent was not justified irk excluding the same for the purposes of Social Security Ordinance.
4. As a result of the observations made above, the appeal is accepted and setting aside the impugned decision of the learned lower Court, the respondents are directed to pay medical allowance at 7 of the wages including house‑rent allowance to 119 persons who were adversely affected by the notification issued by the respondents.
A. E. Appeal accepted.
Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.
🔍 Find a Lawyer