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Constitutional Petition No. S‑122 of 1980, decided on 16th December, 1985.
‑‑‑‑S. 7, proviso‑‑Industrial Relations Ordinance (XXIII of 1969), S.2 (xxiv)‑‑Constitution of Pakistan (1973), Art.199‑‑Cost of living allowance, held, would not form part of wages for purposes of gratuity payable under Settlement of Collective Bargaining Agent with management‑‑Order passed by Labour Court being unsustainable in law was set aside by High Court in exercise of Constitutional jurisdiction.
Syed Qamaruddin Hassan for Petitioner.
Nemo for Respondents (absent).
Date of hearing: 16th December, 1985.
By this Constitutional petition the petitioners have challenged the order of the Labour Court No. VI, Hyderabad, dated 23‑10‑1980, whereby the gratuity payable to respondent No.2, Khushhal Khan has been allowed to be calculated both on basic pay and cost of living allowance, the said respondent is entitled to.
Briefly stated the facts of the case are that the respondent No. 2 was employed as an Operator in the service of the petitioners. When he resigned from his job, he was relieved of his duties and paid all his dues including gratuity which was calculated only on the basic pay admissible to him. Since the cost of living allowance was not taken into consideration for calculation of the gratuity, the said respondent filed application under section 15 of Payment of Wages Act read with section 6 of Employees Cost of Living (Relief) Act, 1973 before Authority and Commissioner Workmen's Compensation. By his order, dated 28‑6‑1980 the said Authority‑cum‑Commissioner dismissed his application. Unsatisfied with this order, the respondent No. 2 preferred appeal before the Labour Court, Hyderabad which, as stated above, allowed his appeal directing for recalculation of the gratuity both on basic salary and cost of living allowance. It is against the order of the Labour Court that the present petition has been filed.
The respondent No.2 is called absent, even though notice was sent to him by him by registered A.D. It appears from the record that the said respondent had appeared in response to the initial notice following the admission of the petition and‑ had prayed for time for filing objections. Thereafter, he neither filed objections nor appeared in Court. However, the petition has been pending since 27‑11‑1980. It seems the respondent No.2 has last interest in the case and that is precisely the reason for his non‑attendance. In the circumstances it will be futile to repeat notice to him and wait for him. Accordingly the learned counsel for the petitioners is allowed to make his arguments. The only point the learned counsel stressed in course of his arguments is that while giving the impugned judgment the proviso to section 7 of Employees Cost of Living (Relief) Act, 1973 had escaped the notice of the learned Labour Court. According to the learned counsel, cost of living allowance formed a part of the basic salary for the purpose of calculating gratuity payable under the law other than the laws specified in the proviso. It is contended by the learned counsel that the gratuity payable to the respondent No. 2 was not a statutory gratuity, as it was payable in accordance with the Collective Bargaining Settlement under the Industrial Relations Ordinance, 1969. Accordingly the gratuity was to be calculated strictly under the settlement. As provided in the settlement the gratuity payable to respondent was to be worked out on the basic salary which obviously does not include the cost of living allowance.
On perusal of the proviso, referred to above, I am of the view that the argument of the learned counsel for the petitioners is not without force. The proviso reads as under:‑
"Provided that, for the purpose of the Workmen's Compensation Act, 1923 (VIII of 1923), except section 4 thereof, the Payment of Wages Act, 1936 (IV of 1936) the Companies' Profits (Workers' Participation) Act, 1969 (XII of 1968), or the Industrial Relations Ordinance, 1969 (XXIII of 1969), the Cost of Living Allowance shall not form part of the wages of a worker."
The proviso clearly shows that for the purpose of Industrial Relations Ordinance, 1969, the cost of living allowance shall not form part of the wages of a worker. Accordingly gratuity which was to be calculated as per terms of settlement arrived at under the said Ordinance A was to be worked out only on the basic salary. Cost of living allowance, therefore, did not form part of the basic salary for calculation of the gratuity. It seems that said proviso was not brought to the notice of the learned Labour Court and hence the said Court came to erroneous conclusion.
For above reasons the impugned order passed by the Labour Court being unsustainable in law is hereby set aside.
A. E. Petition accepted.
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