SALEEM AKHTAR, J.-This Judgment will dispose of Petitions Nos, - 928/78 and 76/1979. In both the petitions the same impugned order of the District Judge acting as appellate authority under the Shops and Establishments Ordinance, 1969 has been challenged. The petitioner is a public limited company having a regular system of pay scale, grades, promotions and annual increments for its employees. On 22nd January, 1970 the Union which is the collective bargaining agent signed a settlement with the petitioner for two years effective from 1st January, 1970. Again on 1st March, 1972 another settlement was made for a period of 2 years which besides the usual annual increment provided 8% increase in the basic salary of the employees. This settlement inter alia provided for other allowances as well. Again on 21st December 1973 the respondent No, 3 presented a demand and after negotiations settlement was signed between the parties and countersigned by the Conciliator on 1st February, 1974. Under this agreement the petitioner agreed to 8% increase in the basic salary of all permanent employees apart from other allowances and concessions which inter alia included house rent allowance, and increase in conveyance allowance This agreement was made effective from 1st January, 1974. The dispute between the parties relating to this agreement is restricted to the increase made in the salary and does not include the allowances.
2. Before we state the real controversy between the parties it will be advantageous to state the law which in fact caused the respondent No, 3 to make a further demand The Employees' Cost of Living (Rolief) Ordinance (Ordinance XXII of 1973) was promulgated on 17th September, 1973, whereby relief to the extent of Rs, 35 p.m, with effect from 1st August 1973 was given to the employees if the wage did not exceed Rs, 700 p.m. Or at such rate as together with the wages would work out a total sum of Rs, 735 per month. The above Ordinance was repealed by the Employees' Cost of Living (Relief) Act, 1973 (Act I of 1974) which was gazetted on 7th January, 1974. Thereafter by the amending Act XLVII of 1974 gazetted on 10th September, 1974 the statutory amount of 10% of a worker's basic wage to a maximum of Rs, 100 which ever was higher was payable to employees whose salary did not exceed Rs, 1,100 per month exclusive of the cost of relief.
3. The Union entered into correspondence with the petitioner for the demand of 10% increase in cost of living allowance as provided by the aforestated Act. The petitioner took the stand that the 8% increase in the salary was intended to be a relief for the cost of living and, therefore, the demand was not tenable. The respondent employees filed application under section 12 of the Shops and Establishments Ordinance, 1969 before the Authority who by its order dated 31st January, 1976 dismissed the application holding that increase of 8% in the basic salary under the agreement of 1st November, 1974 was allowed as a measure of relief towards the rise in cost of living, therefore, the petitioner was entitled to adjust the amount towards the cost of relief. The respondent No, 3 had also filed an application under section 50 of the I.9.0, for the interpretation of the settlement dated 1st February, 1974 before the Sind Labour Appellate Tribunal, Karachi. The learned Tribunal by its Order dated 10th June, 1975 observed that so far as the salary was concerned evidence was required as to whether the increase was intended to provided relief due to rise in cost of living and since the matter was before the Labour Court it refrained from expressing any opinion on that subject. As regards the allowance it was observed that as there was nothing to indicate that the allowances were given as relief due to rise in cost of living, it could not be adjusted.
4. The Union appealed before the District Judge against the order of the Authority under the Shops and Establishments Ordinance, 1969, and the learned District Judge by the impugned order dated 11th May, 1978 allowed the appeal and setting aside the order of the Authority observed as follows :- "It has been urged before that there is a regular grade and increments are allowed in the company and that the increase in salary was on account of the rise in the cost of living. It may be the intention of the parties to the agreement, but law under consideration means that there should be specific mention of the allowance when the salary is raised in the settlement, there is no mention of any allowance and as such the increase will not mean the increase due to the rise in the cost of living."
5. The learned counsel for the petitioner has contended that the learned District Judge has followed the case of the Supreme Court of India (1961 P L C1261) and the same is not applicable mainly because the definition of the word 'wages" in Indian Statute is completely different from the definition contained in Act I of 1974, and further that in this Supreme Court case the workers were on piece work basis and not on regular cadre basis. Mr. Khalid Ishaque has further contended dot where increase in wages has been made which is intended to provide it due to rise in cost of living, the employer will be entitled to the benefits of the proviso to section 8 of the Employees' Cost of Living (Relief) Act 1974. He has further contended that such intention should be ascertained from the attending circumstances, evidence and facts of the case and should not be restricted only to .The wording of the agreement itself. By this submission the learned counsel has attempted to meet the arguments of the respondents based on interpretation of the Explanation to section 8 which has been made the sole ground for rejection of the appeal by the learned District Judge. At this stage it will be advantageous to reproduce section 8 which reads as follows :- "8. Saving of certain rights and privileges. -Nothing in this Act shall affect any right or privilege to which an employee was en titled :
(a) In the case of the cost of living allowance payable under subsection (i) of section 3 immediately before the commencement of the Employees Cost of Living (Relief) Ordinance, 1973 (XXII of 1973) ; or
(b) In the case of the cost of living Allowance payable under subsection (2) of section 3, immediately before the commencement of the Employees Cost of Living (Relief) (Amendment) Act, 1974, under any law for the time being in force, or under any award, decision, agreement, settlement, contract, custom or usage in force immediately before such commencement : Provided that, if, at any time commencing on or after the first day of August, 1973, but preceding the commencement of the said Ordinance, or, as the case may be, commencing at or after the commencement of the said Ordinance but preceding the commencement of the Employees' Cost of Living (Relief) (Amendment) Act, 1974, any employer has paid, or become liable, to pay, whether by virtue of an ward, decision, agreement, settlement, contract, custom or usage, to any employee, in respect of any period, any sum of money, which is intended to provide relief due to a rise in the cost of living, such employer shall not be required to pay to such employee in respect of such period any amount in excess of the difference, if any, between the amount so paid by him or the amount which he has so become liable to pay, and the cost of living allowance payable to such employee.
Explanation.-For the purposes of this proviso, any increase in wages accruing by virtue of the usual increment or promotion to a higher grade. Or an allowance not specifically given to provide relief due to a rise in the cost of living, shall not be deemed to be an increase intended to provide relief due to a rise in the cost of living."
The object of section 8 is to safeguard the rights or privileges to which an employee was entitled before the commencement of Ordinancem XXII of 1973 and Employees Cost of Living (Relief)
(Amendment) Act, 1974, It further provides that if at any time between 1st August, 1973 and 10th September, 1974 any employer has paid or become liable to pay in respect of any period any sum of money which is intended to provide relief due to rise in cost of living then the employer will be liable to pay in respect of such period only the difference, if any, between the amount so paid or which has become liable to be paid and the cost of living allowance payable to such employees.
By an Explanation added to this section it is intended to clarify which amount shall not be deemed to be an increase intended to provide relief due to the rise in cost of living. The learned counsel for the respondent has contended that as in the agreement it is not expressly mentioned that the increase made in the wages was due to the increase in cost of living allowance, the petitioners are not entitled to the benefits of proviso to section 8.
6. This narrow controversy calls for an examination of the Explanation to section 8, The proviso is intended to provide relief to the employer and to save him from paying twice in respect of the same account. The fact, however, remains how it should be ascertained that any amount so paid or which an employer is liable to pay was paid or is intended to be paid as a relief due to rise in cost of living. The proviso by itself has not laid down any procedure for ascertaining such intention.
In order to clarify the situation the Legislature has added an Explanation in which the cases not covered by the proviso have been categorized in negative terms. It has categorised the payments or the liabilities which shall not be deemed to be increase intended to provide relief due to a use in the cost of living. The Explanation is not exhaustive. It has only taken into consideration the fo!Lowing three situations in which if the employer has made payment or has become liable to pay then it will not be deemed to provide relief due to rise in cost of living : (i) increase in wages accruing by virtue of the usual annual increment any increase in wages which has accrued due to promotion to a higher grade, and (iii) an allowance not specifically given to provide relief due to rise in cost of living. In all these three cases the employer will not be entitled to invoke benefits under the proviso. In the present ease there is no dispute about the allowances. The dispute is only in respect of increase in the salary, viz, whether the increase was intended to give relief due to rise in cost of living ? Let us then analyse the Explanation quoted above. It has to be seen ; firstly, whether the words "not specifically given to provide a relief due to a rise in the cost of living" refer to the salary or to the allowance or to both ; and, secondly, whether these words particularly, words "specifically given" relate to the form and the manner in which such payments are expressed in the agreement or document or the real nature of payment ? The Explanation first refers to any increase in wages accruing due to usual annual increment or promotion to higher grades. If the increment is due to usual annual increment or promotion then it is not necessary to specifically mention that it was given to provide a relief due to rise in cost of living. This expression by itself contemplates a composite and comprehensive situation requiring no clarification because when the increase is due to specified reasons there is no need to clarify or ascertain it further. The object to grant increase is clear by itself. If the words "specifically given" also govern the increase in wages then the words "accruing by virtue of usual increment of promotion to a higher grade" will become completely redundant because the reason for grant of increment has been specified being usual annual increment or promotion in higher grade", and therefore no other reason can be attributed to such increment. In case of the increments in wages as contemplated in the Explanation, it can not be said that such increment was given to provide relief due to rise in cost of living. Whether the increment is due to these two aforestated reasons the employer cannot assert that it was made with the object to provide relief due to rise in the cost of living. However, a situation may arise where besides the usual annual increment or increase in wages due to promotion, the employer may have granted additional increase in wages. Whether in those circumstances the employer will be entitled to invoke the benefits of proviso to section 8. Before dealing with this aspect of the case it is necessary to complete the analysis of the Explanation. After referring to increase in wages the Explanation proceeds to deal with the allowances which have been paid or are to be paid. In this regard an employer will be entitled to the benefits of the proviso provided the allowance has been "specifically given" to provide a relief due to rise in cost of living. The Legislature requires that if any allowance is intended to be paid as a relief due to rise in cost of living, then such intention should be clear and unambiguous. This safeguard was provided in respect of allowances only because it is common to raise demands of various nature which by the terminology used may give the impression that it was intended to grant relief due to rise in cost of living. Even otherwise it would have been very easy for the employers to contend that the new allowances or increase in allowances were intended as a relief due to rise in cost of living. This was not possible where increase in wages was due to usual annual increment or promotion. To avoid this anomalous situation it has been provided that unless the allowance has been specifically given towards such relief the employer will not be entitled to the benefits of the proviso to section 8.
7. Reverting back to the question of increase in wages not accruing due to usual annual increment or promotion it is to be considered how it should be determined that such increase in wages was intended to provide relief due to rise in cost of living. The contention of the learned counsel for the respondent is that if it is not specifically mentioned in the agreement that the increase in wages was given to provide relief due to rise in cost of living then such increase irrespective of the fact that it was not due to usual annual increment or promotion as contemplated in the Explanation it should not be treated to be intended to provide relief due to a rise in cost of living. The only criterion according to the respondent No. 1, for such determination is that it should be specifically mentioned in the agreement. Further analysis of this argument leads to the conclusion that even if the intention for such increase in wages was to provide relief which can be ascertained by other evidence, facts and circumstances of the case then it cannot be treated to have been provided with such intention simply because it has not been specifically mentioned. For such an interpretation reliance has been placed on the words "specifically given" occurring in the Explanation.
8. We have already analysed that the words "specifically given" do not govern the cases of increase in wages due to annual increment and promotion. It is significant to note that the Legislature has used the words "specifically given", and not "specifically provided" or "expressly mentioned". The dictionary meaning of the word "given" is "bestowed", "disposed", "granted", "paid". The words "specifically given" appearing after the word "allowance" do not relate to the form of agreement or the manner in which while granting the allowance it should be expressed. It refers to the intention of the parties which should be clear, express and unambiguous. Such payment or intention can be ascertained from the facts and circumstances of the case.Any employer claiming the benefits of the proviso has to establish by clear documentary or oral evidence as the case may be that increase in salary or the grant of allowance was made with a view to provide relief due to rise in cost of living. We are, therefore, clear in or view that the word "not specifically given" do not refer to the form of expression in which increase or allowance should have been mentioned in the agreement or in other document. They refer to the intention of the parties and to the factum of grant or payment of allowance to the worker.
9. It is an undisputed fact that rise in wages is demanded due to several reasons which inter alia include rise in cost of living, increase in the paying capacity of the employer, and rise in wage structure in the comparable industry. Mr. Ali Amjad the learned counsel for the respondents has, therefore, contended that there is no presumption in law that increase in wages is due to increase in cost of living. It may be so but rise in cost of living has resulted in demands for increase in wages or allowances. The Employees Cost of Living (Relief) Allowance Act, 1974 gives a statutory recognition for such increase. In this context it becomes necessary to embark upon inquiry and determine whether the increase in wages which has not accrued due to usual annual increment or promotion is due to rise in cost of living. Such determination can be made by looking into the settlement which may mention it impliedly or expressly. If increase in wages can be co-related with the rise in cost of s living and it is established that it was intended to provide relief due to rise in cost of living, then the employer will be entitled to invoke the benefits of the proviso to section 8 and subject to rules of evidence to prove It by independent evidence also.
10. In support of their contention the respondents have relied upon the following cases : Security Papers Employees' Union v. 4th Sind Labour Court and another , Employees' Welfare Union v. R. B.
Industries Limited and another and Alpha Insurance Company Ltd. v. Employees Union and another. In or opinion all these three cases are distinguishable on facts and are not directly applicable to the present case.
11. In the first case, namely, PLD 1976 Kar. 288, on 7th May, 1973 the Union submitted a charter of demands which inter alia contained a demand for revision of pay scales and dearness allowances.
The settlement concluded on 6th August, 1973 effective from 1st April, 1973 providing revision of pay scale in a manner that each workman was to get a benefit of Rs, 40 per month as increase in his basic wages. On coming into force of the Employees' Cost of Living (Relief) Ordinance, 1973 (Ord.
XXII/73) promulgated on 17th September, 1973 and made effective from 1st August, 1973 the Union demanded cost of living allowance of Rs, 35 per month. The Employers refused to pay the same on the ground that an increase of Rs, 40 had already been made in the wages of the workmen and therefore under section 8 of the Ordinance they were exempted from making payment of the allowance. The Union contended that the increase of Rs, 40 was made against their demand for revision of scales of pay and no settlement was reached on the demand of the dearness allowance. The settlement also did not speak that increase included revision of scale and dearness allowance. The increment was given only to permanent workers and not to the temporary workmen. On the other hand the cost of living allowance was in respect of all the employees. In view of these facts the High Court rejected the employer's contention. It is to be noted that the Court passed the judgment after considering all the facts and circumstances of the case, by looking into the charter of demands, settlement and the fact that revision in pay scale was made only in respect of permanent employees. It was held that if the employer had increase in wages as1 2 3 a relief due to rise in cost of living then it would have been allowed to all the employees irrespective of the fact whether they were permanent or temporary. The Court did not decide the case on the sole ground that as in the settlement it was not specifically mentioned that the increase was due to rise in cost of living, the employer was not entitled to adjustment. The reason for increase in wages was determined after considering all the facts and circumstances. In case of a dispute between the parties, absence of clear intention to this effect in the agreement may lend strong support to defeat the employers claim for adjustment. But it cannot be said that it is mandatory in law that unless it is specifically mentioned that increase in wages was to provide relief due to rise in cost of living, the employer will be disentitled to claim adjustment under section 8.
12. In the second case reported in PLD 1976 Kar. 297 the facts were that there was no regular scale of wages where by the workers could get automatic increase at regular intervals. As a result every two years the Management and employees entered into settlement to determine the conditions of service of workers including wages. It was a regular feature that increment in salary was made by raising demand followed by a settlement. In these circumstances when a demand was raised for increase in wages the employers agreed to raise it to the of extents of 38. 6% in case of lower grade and 21. 6 % in case of higher grade while in the previous year the increase was only 10%. In these circumstances the employer contended that as there was abnormal increase it was intended to provide relief due to rise in the cost of living. Considering these facts it was held that as it. Was not specifically mentioned that the increase was due to rise in cost of living the employers were not entitled to the benefits of the proviso. It is to be noted that in this particular case the company did not have any regular cadre and there were no rules for usual annual increment which entirely depended upon the settlement between the parties. If there had been a regular cadre and scale of wages providing automatic annual increment then the situation would have been different. In this case the increment in wages was by settlement and therefore if the increase was due to any other purpose it should have been mentioned in it. If the intention for grant of increment could not be ascertained from the settlement, then in certain circumstances, depending on the facts and subject to rules of evidence it may be open to the parties to establish it by other evidence and circumstances. The decision in this case entirely depended upon facts of the case which were quite different from the present case.
13. In the third case reported in PLD 1979 Kar. 47, the entire dispute related to the allowance and not to the increase in wages. This makes a material difference in the approach to the controversy because where the allowance is in dispute the employer will be entitled to adjustment if it has only been given specifically as a relief due to rise in the cost of living. In this case under the first settlement made in 1972 the Company had agreed to pay conveyance allowance and medical allowance. However, under the second settlement made on 20th June, 1974 which was effective from 1st January, 1974 the rates of both these allowances were increased and the Company further agreed to pay house rent and Karachi allowance for workers residing at Karachi. The Company further agreed that if by virtue of any law any benefit would compulsorily be conferred on the workmen, such benefits would be allowed by the Company. The settlement also provided that if any benefit so conferred by the settlement is enhanced or improved then the workmen would be entitled to the enhanced/improved benefit. When Employees Cost of Living (Relief) (Amendment)
Act, 1974 was passed by the Assembly the Union requested the Company to allow minimum of Rs, 50 and maximum 10% of the salary as cost of living allowance the. Company maintained that in view of section 8 of the above Act, the Company would be entitled to adjust the additional benefits given under the second settlement while computing the additional benefit under the Amending Act, of 1974. In these circumstances while elucidating section 8 of the Act, following observation was made at page 53 :- "Furthermore an explanation to section 8 has been added to with the object to make it clear that any sum which is not specifically given to provide relief due to the rise in the cost of living shall not be deemed to be an increase intended to provide a relief due to rise in cost of living."
This observation clearly illustrates that in the explanation the words "not specifically given" refer to the intention and factum of payment and not to the form of expression. Again it was observed : "If we read section 8 with its explanation, it becomes clear that only that amount which has been paid specifically to provide relief due to rise in cost of living is liable to be adjusted."
This again vividly points out that words "specifically given" have been construed as -paid specifically" and not "expressly mentioned". In para. 9 of the judgment it has again been observed that "section 8 read with its explanation contemplates adjustment of a sum, which has been specifically paid to provide for the rise in the cost of living." It is thus established that if any amount within the specified period has been paid by the employer, to provide relief due to rise in cost of living then the employer is entitled to adjustment under section 8. Where such payment has been made but it has not been expressly mentioned that it is to provide relief due to rise in cost of living then the employer will be entitled to adjustment provided he is able to prove that payment was made for such purpose. To illustrate it, where in pursuance of a demand for an allowance to provide relief due to rise in the cost of living the employer agrees to pay such allowance but in the agreement, the increment has been shown as allowance without specifying that the increase was due to rise in cost of living, will it mean that only because the nature and the purpose for granting the allowance has not been expressly mentioned in the agreement the employer will be liable to pay it again and will be deprived of the benefits conferred by the proviso to section 8? This could not be the intention of the Explanation. It is a well-settled rule of interpretation that an explanation to a provision of law is intended to clarify the meaning and not to put restrictions and limitations to the F main provision. If in the proviso itself no such limitation has been placed it will not be proper to restrict the meaning by relying upon the Explanation. If we read the entire section we find that it first saves the rights or privileges to which an employee was entitled and thereafter by a proviso it has provided relief to the employers entitling them to adjust from any sum of money paid or liable to be paid which is intended to provide relief due to rise in cost of living. No restriction has been placed except that the money paid or liability incurred should be in respect of relief due to rise in cost of living. To clarify further the explanation states that increase in wages due to usual increment or promotion shall not be treated as payment as required by the proviso. The difficulty was visualised that any allowance not paid specifically to provide relief due to rise in cost of living will not entitle the employer for adjustment. Such clarification in respect of allowances was necessary because usually most of the financial demands are in the nature of allowances with different nomenclature.
14. We are of the considered view that the Explanation to section 8 does not provide a form to express the nature and purpose of payment in a settlement or a document. It merely clarifies that if the employer wants to adjust any allowance, then it should be clearly established that it was specifically paid to provide relief due to rise in cost of living. In such a situation if there is any ambiguity the benefits will be given to the workers and the employer will not be entitled to the benefits of adjustment. If the purpose of granting such increase is not clear from the agreement itself then the Court is empowered to look into the facts and circumstances and also to consider the evidence subject to the rules of evidence to determine the intention of the parties, whether the payment was intended to be made to provide relief due to rise in the cost of living.
15. The learned District Judge has completely ignored this aspect of the case and has gone to the extent to observe that it may be the intention of the parties to have provided relief due to rise in cost of living but because it has not specifically been mentioned in the settlement the petitioners are not entitled to the relief claimed by them.
16. In view, of the aforestated reasons we were inclined to remand the case to the District Judge for further consideration in the light of the above observation. However, the admitted position is that the 8% increase in basic salary was granted only to permanent employees. The temporary workers did not have the benefit of this increase. Similar situation had arisen in the case reported in PLD 1976 Kar.
288. It was held that as the increment was granted only to permanent employees, therefore, the intention of the employer was not to grant relief due to rise in cost of living because if that would have been the intention then all the employees irrespective of the fact whether they were permanent or temporary would have been allowed increase in the salary. In view of this admitted position we do not wish to remand the case for further investigation for determining the point at issue. We, therefore, dismiss both the petitions and maintain the order of the District Judge on completely different grounds. There will be no order as to costs. PLD 1976 Kar. 288 P L 0 1976 Kar. 297 PLD 1979 Kar. 47