These are three applications, all under section 50, Industrial Relations Ordinance, seeking interpretation of the provisions of the respective settlements arrived at by the workmen concerned, through their C. B. As., with their employers, in the light of the provisions of the Employees' Cost of Living (Relief) Act, 1973, hereinafter referred to as the Principal Act, as amended by Ordinance XXXII of 1980, hereinafter referred to as the Amending Ordinance. As the three applications involve substantially common issues of facts and law, they have been heard together and are being decided by this order.
2. Application No, 600 of 1980, is by the International Laboratories Ltd., and seeks interpretation of the provisions of a settlement arrived at on 29th January, 1980, though the settlement was given retrospective effect from 1st January, 1980, between the said company and the C. B. A. Therein, particularly the penultimate clause of the settlement, which reads as follows :- "It is further agreed that or additional benefits, monetary or otherwise or facility or rights hereinafter granted by the Government under any law or through a directive or order shall be in addition to the benefits hereinabove given except the bonus for the year 1079 which is in full and final settlement of the demand for bonus irrespective of any payment of bonus that may be made payable by the Government for the year 1979 through any law, order or directive."
3. Application No, 659/80 is by the New Jubilee Insurance Employees' Union and seeks interpretation of the terms of the settlement arrived at on 25th June, 1980 between the said union and Messrs New Jubilee Insurance Company Ltd., particula0y the first paragraph of clause 17 of the said settlement, which read as follows :- "17. It is mutually agreed that if the Government announced any further increase in the Cost of Living Allowance or grants any financial benefits otherwise and makes its payment obligatory without the right of set-off and/or adjustment and/or deduction then the same will be allowed to the workmen of the Company. In case any adjustment is permissible under the law then the Company will be entitled to set off the increase granted in terms of Clause No. 1 only as the same has been allowed due to rise in cost of living."
4. Application No, 732/80 is by the Pakistan Welding Electrodes Ltd., and seeks interpretation of the memorandum of settlement arrived at on 26th February, 1980 between it and the Pakistan Welding Electrodes Workers' Union, the C. B. A. Therein, particularly clause 5 of the settlement, which reads as follows:- "5. It has been agreed that the benefits given and any relief or allowance announced by the Government for the workers shall be in addition to the benefits given under this agreement."
5. I have heard Messrs Sher Afghan, Ali Amjad and Raja Shamsuz Zaman, who appeared for the respective applicants in the above 3 applications, and Messrs Obaidur Rehman, Mahmood A.
Ghani and Nayab Naqvi, who appeared for the respective respondents in the said applications.
The twin issues which have been argued before this Tribunal by the learned counsel/representatives are :-
(1) What is the connotation of the term appearing in the proviso to subsection (4) of section 3 of the Principal Act, as amended by the Amending Ordinance, and what are the sums or monetary benefits under the settlements against which the Cost of Living Allowance payable under the Amending Ordinance can be adjusted ; and
(11) Whether it is permissible by settlement, contract or otherwise for the employer to waive the requirement of adjusting the amount payable under a settlement, agreement or award referred to in the proviso to subsection (4) of section 3 of the Principal Act against the Cost of Living Allowance payable under the Amending Ordinance, and if so, whether the employer in any of the 3 instant applications has waived or given up the right to such adjustment or is estopped from enforcing such right.
6. The Principal Act was enacted on 31st December, 1973 to provide as stated In its preamble, for payment of Cost of' Living Allowance to employees and for matters ancillary thereto. The Principal Act, as originally enacted, provided for the payment by an employer to his employee whose wages did not exceed Rs, 750 p. m., a Cost of Living Allowance equal to Rs, 35 per month. An additional Cost of Living Allowance, equal to Rs, 50 per month or 10% of his monthly wages, whichever was more, was required to be paid by the employer in view of the amendment made in the Principal Act by Acts XLVII of 1954 and LXI of 1975, to every employee of his whose wages did not exceed 1,100 rupees per month.
7. A further Cost of' Living Allowance equal to Rs, 25 per month, was required to be paid by the employer under the amendments made in the Principal Act by Act LX1 of 1975, to every employee of his with effect from 7th day of April, 1975.
8. The latest addition to the Cost of Living Allowance was made by the Amending Ordinance, which came into force with effect from 26th June, 1980. The said Ordinance added subsection (4) and a proviso to section 3 to the Principal Act, which reads as follows :- "(4)-In addition to the Cost of Living Allowance admissible under subsections (I) and (2) or, as the case may be, subsection (3), if any, every employee whose wages do not exceed one thousand and five hundred rupees shall, in respect of his employment or after the first day of July, 1980, whether on time-work or piece-work basis, be paid by his employer a cost of living allowance equal to forty rupees per month : Provided that the said cost of living allowance shall be set off
(a) against the amount payable 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, 1980, 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, 1980 ; and
(b) against the amount payable under an award given under the Newspapers Employees'
(Conditions of Service) Act, 1973 (LVIII of 1973) which becomes effective from the fifteenth day of April, 1980."
9. It was contended by Mr. Mahmood Ohani, the learned Representative for the New Jubilee Insurance Company Ltd., the respondent in Application No, 659/80, that since the term 'the amount" in the proviso to subsection (4) of section 5 of the Principal Act has not been qualified or restricted in any manner, it should be deemed to include every amount payable under an agreement or settlement or an award, which has been announced and becomes effective within the period specified in the proviso. The learned Representative sought support for his contention from the following observation in regard to the connotation of the word "amount" by a Division Bench of the erstwhile High Court of West Pakistan in the case of Bank of Bahawalpur v.
Muhammad Shies :- "When the section says that interest shall be calculated on the amount of the principal money due thereon the word 'amount clearly indicates that it was the aggregate sum which became due in terms of the promissory note upon which interest was to be calculated. The dictionary meaning of the word 'amount' is 'total to which a thing amounts. '
10. It may be pointed out that their Lordships in the above case were considering the connotation of the word 'amount' with reference to the principal money, which in the case of a promissory note would mean the original amount under the promissory note plus the interest duo thereon up-to- date. The observation of their Lordships Is thus limited to the facts of that case and cannot be strained to apply to the interest oases, where the term "the amount" ii used with reference to an agreement, settlement or award under the Industrial Relations Ordinance.
11. The general principal of construction of Statutes is that in constraining individual words they are not to be considered in isolation but the Act s to be regarded as a whole, The principle is thus stated by Maxwell in his "Interpretation of' Statutes", Twelfth Edition, page 58 "Passing from the external aspects of the statute to its contents, it is an elementary rule that construction is to be made on all the parts together, and not of one part only by itself. It has been said that one of the safest guides to the construction of sweeping general words which are hard to apply in their full literal sense is to examine other words of like import in the same instrument, and to see what limitations must be imposed on them; and if it Is found that a number of such expressions have to be subjected to limitations and qualifications, and that such limitations and qualifications are of the same nature, that circumstance forms a strong argument for subjecting the expression in dispute to a like limitation and qualification.
(1) Individual words are not considered in isolation but may have their meaning determined by other words in the section in which they occur."
12. If the Principal Act is to be considered as a whole, it becomes clear that for only deals with the Cost of Living Allowance which have been required to be paid by the employer from time to time to specified clauses of his employees. Since the Act exclusively deals with Cost of Living Allowance, the expression "the amount" may reasonably be construed with reference to the Cost of Living Allowance payable under the Principal Act. On the other hand, if the very wide construction, which Mr. Mahmood Ohani invited this Tribunal to give to the expression "the amount", were to be given to it, then the Cost of Living Allowance payable under subsection (4) of section 3 would even be adjusted against any bonus, gratuity, normal increment in wages, payments for overtime work or1 special allowance paid for performance of special duties, involving expenditure or extra time of the part of the workers, which clearly could not have been the intention of the Law-Maker. Realizing the force of this argument, Mr. Mahmood has was forced to concede that the expression "the amount" in the Statute in question is relatable to increase in the Cost of Living to meet which the various Cost of Living Allowances were payable under the Principal Act. He, however, contended that every increase in wages or allowances made during the period specified in the proviso to subsection (4) should be considered as relatable to the increase in the cost of living and should be made subject to the adjustment of the Cost of Living Allowance provided under the said subsection Since clearly the expression "the amount" in the proviso cannot be given the very wide construction of every amount payable under an agreement, settlement or award, and must necessarily be given a restricted meaning, It has to be determined in what precise manner the term "the amount" has to be construed. Some indication of the intention of the Legislature In this behalf may perhaps be gathered from section 8 of the Participial Act, which while saving the rights and privileges of the employees to receive the previous 3 Cost of Living Allowances, provides that while an employer has paid or becomes liable to pay to an employee any sum of money whether by virtue of an award, decision, agreement, settlement, contract, contrast, custom or usage, which is intended to provide relief due to a rise in the cost of living, the employer shall not be required to pay to such employee any amount in excess of the difference between the amount so paid by him or the amount which he has so become liable to pay and the said Cost of Living Allowances. In other words, the said section provides for the set off of only the amount paid or payable by an employer to his employee on account of a rise in the cost of living against the Cost of Living Allowance.. It is pertinent to note that both in subsection (4) of section 3 as well as in section 8 there is somewhat similar provision for set-off though admittedly the language employed in the two sections is different, Furthermore, the provision for the set off In both the sections is made by means of a proviso. This suggests though imprecise dieting has added to the difficulty of interpretation that the object of the Legislature in enacting the proviso to subsection (4) of section 3 like the one in enacting the proviso to section 8, appears to have been that c any amount paid or payable by an employer to his employee under a settlement to provide relief due to a rise in the coat of living is to be adjusted by the employer against the Cost of' Living Allowance payable by him to his employee under the Amending Ordinance.
13. Applying the above construction to the instant' 3 applications, it would appear that-
(a) in Application No, 600/80, the increase in the basic wages of the employees mentioned in Schedule A to the settlement, as also the increase in house rent, conveyance allowance, milk and gut allowance to the workers of powder and tooth paste section and in the medical allowance to those employees who are not covered under the Social Security Schemes, are subject to set off by the employer against the new Cost of Living Allowance payable under the Amending Ordinance ;
(b) in Application No, 659/80, the amounts payable under the settlement dated 25th June, 1980 which can be said to be intended to provide relief due to a rise in the cost of living would appear to be, the increase in the basic salary of different categories of workers, the increase in the Conveyance Allowance, the outdoor allowance of peons, the duplicating allowance and the canteen allowance ; and
(c) as regards Application No, 732/80, the amounts payable under the settlement dated 26th February, 1980, which are intended to provide relief due to a rise in the cost of living would appear to be the increase by a total sum of Rs, 35 in the basic pay, house rent and the conveyance allowance of the employees, as provided in clause 1 of the settlement.
14. It next falls to be considered whether the aforesaid amounts, which in my view are intended to provide relief to workers, due to a rise in the cost of living can be set off against the Cost of Living Allowance payable under the Amending Ordinance. Now as regards the Application No, 659/80, there would appear to be no difficulty for clause 17 of the settlement between the management and the C.S.A. Expressly provides that the company would have the right to set off the amount payable under the settlement to the workers against any further increase In the Cost of Living Allowance, unless such set off is expressly prohibited. As such, in this case at least, the New Jubilee Insurance Company is entitled to set off against the Cost of Living Allowance payable under the Amending Ordinance the amounts which I have held to be intended to provide relief to workmen due to a rise in the cost of living. However, in respect of the other 2 applications, the question arises whether by reason of the provisions made in the respective settlements, the employers concerned are precluded from setting off even those amounts payable under the settlements which are intended to provide relief against a rise in the cost of living against the Cost of Living Allowance payable under the Amending Ordinance.
15. Now, in the first place, the proviso to subsection (4) of Section 3 of the Principal Act, provides that the Cost of Living Allowance shall (underlining is mine) be set off in the manner provided in the proviso. If it had been intended merely to entitle or give a right to the employer to set off the amounts payable under the agreement or settlement to the workmen against the Cost of Living Allowance payable under the Amending Ordinance, the language of the proviso would be expected to be materially different. No doubt, the proviso does not contain the non abstants clause in respect of the settlements and agreements, and further I am conscious of the fact that the word "shall" can in appropriate cases be construed as "may", but it is a cardinal principle of construction of statutes that where non-compliance of a provision of a statute is made a penal offence, the said provision is to be considered as mandatory. Section 9 of the Principal Act provides that any employer who contravenes any provision of this Act shall be punishable with simple imprisonment for a term which may extend to 6 months, or with a fine of 2,000 rupees or with both. It would appear that even failure to set off the amounts payable to workmen under an agreement, settlement or award which are intended to provide relief to workmen due to a rise in the cost of living would be punishable under section 9, as the said section embraces all contraventions of the provisions of the Principal Act by the employer, which would include contravention of the proviso to subsection (4) of section 3. Possibly the object of the law was to ensure that as far as possible workman get uniform benefits so far as the Cost of Living Allowance is concerned, and no workman gets a two-fold benefit, one by way of a settlement and the other by way of law, as such a two-fold benefit may create unrest amongst the workers who do not get such double advantage. Therefore, the Legislature, in its wisdom, has considered it appropriate to make it compulsory and obligatory on the part of the employer to set' off the amount payable to workmen under a settlement, which is intended to provide relief against increase in the cost of living, against the amount of Cost of Living Allowance payable under the Amending Ordinance. The provision contained in the 2 settlements in applications Nos, KAR-600/80 and KAR732/80, act as set off even the amount payable to workmen which obviously is intended to provide relief against a rise in the cost of living would thus appear to be in contravention of law, and as the object has become unlawful, the agreements, to that extent would appear to be void and enforceable under section 24 of the Contract Act.
16. It was, however, contended by Mr. Obaidur Rehman, on behalf of the Unions that the provision in the 2 settlements in question to the effect that the employer will not set off the amounts payable under the settlements against any benefit conferred or granted by the Government, constitute waiver or at least act as estoppel. It has, however, been laid down by their Lordships of the Supreme Court in Mohammad Moin Khan v. Chief Settlement Commissioner of Pakistan , that "waiver in law can be effective only if there is consciousness of the right itself at the time of alleged waiver". In the instant case, when the 2 settlements in question were made neither the Amending Law had come into force nor it was known to any of the parties whether the Government was going to grant to workmen an increase in or an addition to the existing Cost of Living Allowance.* 2
17. The provision in question in the 2 agreements also cannot act as estoppel, for it is a well- established principle that there can be no estoppel against the law, and as already pointed out, the law seems to require, and not merely entitle, the employer to set off the amount payable to workmen which is intended to provide relief against a rise in the cost of living against the Cost of Living Allowance payable under the Amending Ordinance.
18. Crawford, in his "Construction of Statutes", 1940 Edition at page 542, makes a distinction between declining to take advantage of a privilege which the law allows to a party and binding oneself by contract that he will not avail of a right which the law allows to him on grounds of public policy and in support of this distinction, quotes the following passage from Crane V, French, 38 Miss. 503 :- "Another principle is also relied on-that a party may decline to assert a right which the law gives him the power to assert for his individual benefit ; he may decline to plead the statute of limitations, or to make any other defence or which the law allows him to avail himself. But there appears to be a plain distinction between declining to take advantage of a privilege which the law allows to a party, and binding himself by contrast that he will not avail himself of a right which the law has allowed to him on grounds of public policy. A man may decline to set up the defence of usury, or the statute of limitations, or failure of consideration, to an action on a promissory note. But it would scarcely be contended that a stipulation inserted in such a note, that he would never set up such defence, would debar him of the defence, if he thought fit to make it."
19. Similarly, Bindra, in his Interpretation of Statutes, 1965 Edition, at page 422, writes as follows, relying upon the decision in Young v. Maygor of Leamington :- "There can be no waiver of compliance with statutory provisions enacted in the public interest, nor estoppel against setting up non-compliance with them even when the provisions relate to the form of contrasts between individuals and public bodies created by or under a statute."
20. Since the provision for set off under the Amending Ordinance appears to be grounded in a public policy, the employer can neither waive the requirement nor be estopped from acting according to the requirement of the policy. Maxwell, in his "Interpretation of Statutes," 11th Edition, at pages 376 and 378, while stating that `.Every one has a right to waive and E to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, which may be dispensed with without infringing any public right or public policy", points out as follows :- "But when public policy requires the observance of the provision, it cannot be waived by an individual, privatorum conventio juri publico non derogat. Private compacts are not permitted either to render that sufficient between themselves which the law declares essentially insufficient, or to impair the integrity of a rule necessary for the common welfare, such, for instance, as the enactment which requires the attestation of wills."
21. The upshot of the above discussion is that in each of these 3 applications, the employer is not only entitled but required, despite an provision in the settlements in Applications Nos, 600 and 732 of 1980, purporting to waive such right, to set off against the Cost of Living Allowance payable under the Amending Ordinance, the amounts payable under the settlements in question which can properly be said to have been intended to provide relief due to a rise in cost of living. PLD 1967 Kar 433 [Here in italics] PLD 1961 SC 436 (1882) 8 Q B D 579 3 1 * 2 3