' This is an application under section 50, I.R.O., by the management of the Prince Glass Works Ltd., to whom I will refer to as the Company, for the interpretation of certain provisions of a settlement arrived at on 10th June, 1981 between the Company and the Collective Bargaining Agent therein. As it is claimed that differences of opinion have arisen between the Company and the C. La .A. In regard to the said provisions. The differences are stated to have arisen in regard to the provisions in the settlement relating to revision of wages of the workmen, the grant of additional or special increment, the grant of house rent allowance and the increase allowed in the conveyance allowance, heat allowance, and special allowance of Batch. Process and washing allowance. The nature of differences and doubts that have arisen is that whereas according to the Company the increased amounts allowed under the settlement in respect of the aforesaid items have specifically been given to provide relief to the workmen against the rise in the cost of living and accordingly such payments and increments are subject to set off against the cost of living allowance payable to workmen under subsections (4) and (5) of section 3 of the Employees' Cost of Living (Relief) Act, 1974, to which I will refer to as the Act, the stand of the C. B. A. Is that the said amounts and increments have been negotiated as, a package deal against the demands put forward by the workers on the basis of different grounds, including maintaining harmonious relations between the management and the workers, preserving industrial peace in the Company, compensating the workmen for the arduous nature of the jobs they are required to perform and maintaining and increasing the production, and consequently, the said amounts and increments are not liable to be set-off against the Cost of Living Allowance payable to the workmen under the law.
2. I have heard Mr. Mahmood A. Ghani, the learned representative for the Company, and Mr. Ashraf Hussain Rizvi, who appeared for the C. B. A. In order to appreciate their respective arguments, it would be appropriate to refer to the provisions of the settlement in regard to which there is dispute between the parties and also to the provisions of the Act, particularly subsections (4) and (5) of section 3 thereof. The relevant provisions of the settlement, which come under the subheadings of "Wages and Allowances" read as follows :-.- "Wages.-In full and final settlement of this demand, the management and the union/workers have agreed as follows:-
(a) It is agreed that all permanent workers will be given one additional increment in their present wages equivalent to one increment each in their existing pay scales.
(b) The management has further agreed, in order to give relief to the workers due to high cost of living, to revise pay scales and grades of certain categories of workers as follows :- {{TABLE}}
(i) Unskilled Grade
(ii) ,., Rs, 140-15-290
(iii) Semi-skilled Grade Rs, 170-18-350 Rs, 180-21-390 Rs, 300-24-640 Rs, 440 -27--7 10
(iii) Skilled Grade 1
(iv) Skilled Grade 2
(v) Skilled Grade 3 {{TABLE}} ' The above grades will become effective after payment of the increments specified in para. (a) above.
(c) All the entitled workers will continue to receive their Annual Increments on January, 1st each year as per Company's practice and regulations, up to the maximum of their respective grades.
(d) The union/workers also undertake that in the event of any change/amendment in the minimum wages of the industrial workers by, the Government, the management will suitably amend the-wages of the workers only, to the extent that may be provided for in relevant law, In other words, the change/amendment in minimum wages will be in no circumstances passed on to, or in any manner claimed by the workers other than those who are directly affected by and entitled to the said increase by law.
Allowances,-In full and final settlement of this Demand, the management and the union/workers have agreed as follows :-
(a) The management has agreed that Conveyance Allowance of Rs, 12 per month being paid to permanent workers residing within 3 miles radius of the factory will be increased by Rs, 4 per month. The workers will now be paid Rs, 16 per month. Similarly each permanent worker residing beyond the radius of 3 miles will be paid Rs, 19 per month instead of Rs, 15 per month, that is an increase of Rs, 4 per month. Further, this allowance will be paid to all permanent workers (excluding Supervisors) drawing basic wages/salary up to Rs, 599 per month. All other terms and conditions for the calculation and payment of the conveyance allowance will remain unchanged.
(b) The management has agreed to increase to Rs, 1.25 per day worked being the heat allowance presently being paid at Rs, 1 per day worked. This increase/allowance will be paid to only those workers who are entitled to the same at present.
' Those workers of Maintenance Workshops, presently getting heat allowance at Rs, 10 per month will now be paid Rs, 14 per month under the existing terms and conditions.
3. The management has agreed to increase to Rs, 41.50 per month the special allowance of batch process (Rati Klima) and General Batch Mixing Section presently being paid at Rs, 35 per month.
This increase/allowance will be paid only to those workers of the concerned sections who are presently entitled for the same and on the existing terms and conditions.
(d) The management has agreed to increase to Rs, 11 per month the Washing Allowance of Rs, 8 per. Month. This increase/allowance will be paid under existing terms and conditions only to those workers who are getting it at present. e) 'the management has agreed to increase to Rs, 12 and Rs, 15 per month respectively the technical allowance of Rs, 10 and Rs, 15 presently being paid to the semi-skilled and skilled workers respectively of the workshop, power house and electric sections other terms and conditions will remain unchanged.
(f) The management has agreed to raise the Attendance Allowance from the present 15% of the basic wages/salary by 1% to t4% of the basic wages/salary plus statutory cost of living allowance.
This allowance will now be made available to workers drawing monthly basic wages/salary up to and including Rs, 599 per month.
' The maximum monetary limit is also raised from Rs, 70 to Rs, 80 per month.
' The said Attendance Allowance will be paid subject to full attendance (inclusive leave with pay) of workers in accordance with existing terms and conditions. The management have further agreed to introduce a special allowance to be payable @ 11% (Eleven per month) of the basic wages, inclusive of statutory cost of living allowance, provided the worker attends his duty on all working days in the month of the entire period of full eight hours per shift and does not avail of any leave whatsoever including Social Security Leave, short leave etc., only as a special case if a worker is injured as a result of accident during the actual performance of his duty, and is as a result thereof not able to attend the work, such worker will receive this allowance also as if he was on duty. This Special Attendance Allowance will be payable from.
(h) The management have agreed to introduce house rent allowance of Rs, 10 per month to be payable only to those workers who have not been provided with any accommodation, quarter/house by the company. This accommodation shall not be available once the employee ceases to be in service.
(I) The management have agreed to increase Site Allowance from Rs, 80 to Rs, 100 per year.
(j) The management has agreed to raise to Rs, 75 the Eid Gift of Rs, 65 per year being paid to all permanent workers who are on roll of the company on Eid ul Fitr each year."
4. It may be pointed out that although a large number of allowances are covered by the above provisions in the settlement the dispute and the differences between the parties in regard to allowances is limited, according to the application of the company, to conveyance allowance, heat allowance, special allowance of Batch Process, Washing allowance and house rent allowance.
5. Coming next to the provisions of the Act, it may be mentioned that section 3 thereof has 5 subsections, each of which provides for payment of a separate cost of living allowance to specified categories of workmen. In other words, the said section provides for payment of 5 separate and distinct cost of living allowances. Subsection (1) provides for payment of cost of living allowance at the rate of Rs, 35 per month. Subsection (2), provides for the payment of additional cost of living allowance at the rate of Rs, 50 per month to workmen, whose wages do not exceed Rs, 1,000, Subsection (3) provides for the payment of another cost of living allowance payable at the rate of Rs, 25 per month with effect from 7th April, 1975. Subsection (4) provides for the payment of a fourth cost of living allowance payable of the rate of Rs, 40 per month to the employees whose wages do not exceed Rs, 1,500. Subsection (5) provides for payment of fifth cost of living allowance at the rate of Rs, 40 'not month with effect from 1st July, 1981 to workmen whose wages do not exceed Rs, 1,500 per month. It may be pointed out that whereas the allowances payable under subsections (1), (2) and (3) are not subject to set-off by the employer, except as provided in section 8, the allowances payable under subsections (4) and (5) are subject to set-off under other specified conditions. The allowance payable under subsection (4) is subject to set-off against an amount payable wider an agreement or settlement reached, or an award given, which has been announced and of become effective on or after the 1st day of January, 1980 or which is announced and become effective within a period of one year from. 26th June, 1980, when the Employees' Cost of Living (Relief)
(Amendment) Ordinance, 198Q was promulgated and published in the Government Gazette. As regards the cost of living allowance payable under subsection (5) of section 3 of the Act, it is subject to set-off."
(a) against the amount payable as a relief due to rise in the cost of living allowance under an agreement settlement or award, which has been announced and become effective or after the 1st day of January, 1981, or which is announced and becomes effective within a period of one year from 28th June, 1981 when the Employees' Cost of Living (Relief) (Amendment) Ordinance, 1981 was promulgated ; and
(b) against an amount payable under an agreement or settlement reached and enforced on the 1st day of July, 1981, under which employees get increases at regular intervals on the basis of a rise in the cost of living.
6. Mr. Ashraf Hussain has raised a two-fold objection to the maintainability of the present application. His first objection was that there was neither any doubt nor difficulty regarding that 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 but 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, then such agreements must be construed in the light of the 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 amounts payable under settlements and agreements arrived at and enforced from particular dates. The payment of the allowances under the said subsections or the right of set-off the said allowances are, therefore, dependent upon the, inter predation 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 or 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 upon the provisions 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 between the parties, which require to be resolved by this Tribunal in the exercise of its powers under section 50, I.R.O.
7. The second objection raised Mr. Ashraf Hussain Rizvi as to the maintainability of this application was that the management was not competent to make this reference under section 50, I.R.O.
According to the learned counsel, whenever an employer is entitled to make an application to this Tribunal or the Labour Court under the 1.R.O., an express provision to that effect is made in the law, but since section 50, I.R.O.' does not specifically state that the employer can make a: reference to this Tribunal, it should be presumed that no such reference can be made by the employer. A similar issue was raised before this Tribunal in the case of Fauji Sugar Mills Employees' Union v. Fauji Sugar Mills Lid., decided on 12th February, 1981, where it was held by this Tribunal that the employer, who is a party to the settlement, was entitled to make a reference. I will now proceed to examine the reference on merits and to consider which of the amounts, if any, payable under the settlement, dated 10th June, 1981 are subject to set-off either under subsection (4) or subsection (5) of the act.
Since the settlement was reached and had become effective within one year of the commencement of the Employees' Cost of Living (Relief) (Amendment) Ordinance, 1980 set-off under subsection (4) of section 3 is not only permissible but is required to be made in respect of amounts payable under the settlement which can be considered to have been awarded on account of rise in the cost of living, as held by this Tribunal in the case of New Jubilee Insurance Employees Union v. New Jubilee Insurance Company and others, decided on 27th November, 1980.
Furthermore, since the settlement between the parties, was announced and became effective on or after 1st January, 1981 set-off as provided under subsection (5) of section 3 of the Act is also permissible. Under the said section, the set-off is only provided in respect of amounts which are payable as a relief due to rise in the cost of living It has, therefore, to be examined which of the amounts payable under, the settlement have been given on account of a rise in the cost of living.
8. Although under the settlement, it was expressly provided that the permanent workmen would be given one additional increment in their present wage scales, but actually, on the representation of the respondent union, the management had agreed to pay and have actually paid to the workmen in the increment in the revised scale. The very fact that this increment was not a normal increment but an additional increment clearly indicates that it was paid on account of some special circumstances. No other special circumstances have been indicated except rise in the cost of living. It is, therefore, reasonable to assume that the additional increment was due to the rise in the cost of living. It has been expressly stated in the affidavit of Mohammad Ghous Mohiuddin, the factory Manager of the company, that this additional increment was part of the effort to compensate the workmen against the rise in the cost of living. It was sought to be argued by Mr. Ashraf Hussain Rizvi, the learned counsel for the respondents, that this additional increment was the result of negotiations between the parties and that even during the previous settlement such additional increments had been granted by the management. No doubt this additional increment was the result of negotiation between the parties and that is why it found place in the settlement. It may further be pointed out that the previous settlement between the parties, which was arrived at on 22nd February, 1979, expressly states that the additional increment given under that settlement in was due to rise in the cost of living. Since a similar additional increment has been provided under the present settlement, dated 10th June, 1981 the irresistible conclusion would be that this additional increment also was given to compensate the workmen on account of the rise in the cost of living.
9. The next item which has resulted in payment of increased wages to the workman is the revision of wages. The settlement expressly states that the management has further agreed, in order to give relief to workers due to -high cost of living, to revise the wages. It is thus clear that the revision of wages was expressly for the purposes of providing relief to the workers against the rise in the cost of living. The increase in the wages of the workmen due to the introduction of the revised wages would thus be subject to set-off under the Act.
10. Coming next to the allowances payable under the settlement the scheme of the conveyance allowance is that the quantum of the allowance is dependent upon the distance at which the workman is living from the factory premises of the applicants. According to the settlement, whereas previously workmen residing at a distance of less than 3 miles were being paid conveyance allowance of Rs, 12 per month, they would now be paid an allowance of Rs, 16 per month, and those workmen who are living at a distance of more than 3 miles from the factory would now be paid conveyance allowance of Rs, 19 per month against the allowance of Rs, 15 per month which they were previously receiving. The very fact that the conveyance allowance has been made dependent upon the distance at which a workman is residing from the factory premises, indicates that it is directly related to the expected expenditure likely to be incurred by the workman in travelling from his residence to the place of his work. As there has been general rise in the cost of living, particularly in the transport charges, the increase in the conveyance allowance is clearly attributable to rise in the cost of living and hence the increase in the said allowance would be subject to set-off under the Act. The next allowance' which the applicants claimed is subject to set-off is the Heat Allowance. According to the settlement, those workmen who were previously being paid Heat Allowance at the rate of Re. 1 per day would now be paid the said allowance at the rate of Rs, 1.25 per day, while the workmen of Maintenance Workshops, who were previously getting Heat Allowances at the rate of Rs, 10 per month, would now be paid an allowance of Rs, 14 per month, an increase of Rs, 4 per month. It was sought to be argued by Mr. Mahmood Ghani that this increase in the Heat Allowance was on account of the rise in the cost of living, particularly in the prices of Milk, antibiotic and other items which are required to be consumed by the workmen to offset the effects of Heat. It has, however, not been explained why the workers in the Maintenance Workshops are being treated differently from other workmen and are in receipt of far lesser Heat Allowance. The fact that different workmen are paid Heat Allowance at different rates would seem to suggest that the Heat Allowance is paid according to the degree of heat or the extent of exposure to heat which different workmen are subject. In other words, the higher the hazards of heat the greater the Heat Allowance. It thus cannot be said that the Heat Allowance is given to workmen due to rise in the cost of living. At best, the increase in the Heat Allowance may be indirectly due to general increase in wages and the reduction in the purchasing power of the rupee. Similarly, in the case of the Batch Allowance or the increase therein, there is no tangible evidence to show that the same has been given due to rise in the cost of living. No assumption can be drawn from the fact o increase in this allowance that the increase is due to rise in the cost of living.. The increase in this allowance may have been due to the demand of the workmen for adequate compensation against the hazards involved in the Batch making process, which I was given to understand requires handling of huge masses of molten silika and glass and the forming therefrom of various containers, bottles, etc. The very fact that the settlement itself refers to the section in which this allowance is payable as Rati Khata indicates that the workmen in that section have to deal with sand (molten sand) and are thus involved in an hazardous occupation. The Batch Allowance, therefore, should be construed as compensation to the workmen on account of the hazardous nature of their duties.
11 Washing Allowance is paid to the workmen of the applicants for cleaning the uniforms required to be worn by them while performing their duties. Under the settlement this allowance was increased from Rs, 8 to Rs, 11 i. e., an increase of Rs, 3 per month. Since this increase is attributable to increase in the price of soap, detergents, and washing powders, as stated by Muhammad Ghaus Mohiuddin, the Factory Manager of the applicants, in his affidavit filed before this Tribunal, I am of the view that the increase of Rs, 3 in this allowance is subject to setoff under the law.
12. The last allowance in respect of which set-off has been claimed in the application under section 50, 1, R.
0., is the House Rent Allowance. This allowance was introduced for the first time under the settlement under reference and the amount thereof is Rs, 10 per month. This allowance is payable to those permanent workmen who have not been provided accommodation, quarter/house by the company. Mr. Mahmood Ghani was at some pains to argue that this allowance was given as a relief against rise in the cost of living. I, however, find no substance in his contention. Apart from the fact that there is no tangible evidence on the record in support of his contention, it appears to me that this allowance was given as compensation to those workmen who had not been provided with quarter/houses by the company. A bare perusal of the provisions in the settlement relating to this allowance supports such an inference. The providing of a quarter/house to the workmen by the company is a valuable benefit, even if the company charges rent for the houses/quarters, and hence those workmen who are not provided with houses/quarters the company are at a disadvantage as compared to the workmen who have been provided company houses/quarter.
The grant of house rent to those workmen who have not been provided with company of house rent to those workmen, who have not been provided with company quarters / houses, would thus appear to be a measure to compensate to some extent workmen who are not provided company quarters/houses. I am, there- fore of opinion that this allowance is not subject to set-off under) the Act as this is not given due to rise in the cost of living.
13. Mr. Mahmood A. Ghani also sought to argue that technical allowance and attendance allowance should also be construed as having been given to the workmen on account of rise in the cost of living, but since no reference to these allowances has been made in the application under section 50, I. R.
0., I would refrain from dealing with the same.
14. Before concluding this order, I would like to deal with the last objection raised by Mr. Ashraf Hussain Rizvi. He submitted that as the workmen had been enjoying the various allowances awarded to them under the settlement, without any set-off, it would be unreasonable for the company now to make the above allowances subject to set-off under the Act. This contention is without substances. In the first place, it is not the company that is making the amounts payable to the workmen on account of rise in the cost of living subject to set-off, but the provision in this behalf is made in the Statute itself. Furthermore, as submitted by Mr. Mahmood Ghani, the company was making payments to the workmen of the various amounts and allowances under the settlement subject to their right to claim set-off under the Act. Finally, the function of this Tribunal while dealing with an application under section 50,
1. R. O., is to interpret the settlement, agreement or award according to law and not to influenced by any consideration of any hardship resulting CO the employees by reason of the workmen having to refund any amounts as a result of such I interpretation. In this behalf, I would refer to the following authoritative pronouncement of their Lordships of the Supreme Court in the case of Karachi Electric Supply Corporation Ltd. v.
Karachi Electrtic Supply Corporation Ltd. Labour Union (1) - "On behalf of the Union, Mr. Brohi at the conclusion of the arguments urged that the settlement had already run its full course of two years, and it would be hard indeed if the employees in question were now required to refund what they had received during that period in excess of at period in excess of that which this Court may find to have been legally due. That is a consideration which cannot weigh with the Court, when in the discharge of its duty it is required to give the true meaning to words appearing in a legal instrument. It is relevant to and important for the maintenance of harmonious relations between the employer and the employees. But it is not of at least equal importance for that purpose that the Industrial Disputes Ordinance and all legal instruments issued there under should be interpreted and supplied as between the parties according to their true meaning and tenor so that their relations may be governed by a rule of law.
The Court's duty is to declare the meaning and tenor of the agreement, but as to its implementation with respect to a period in the past, that may well be left to the good sense of the Corporation and the Union to determine, amicably it possible, but otherwise through the procedures provided by the Ordinance." {{FOOT NOTE}}
(1) 1967 PLC 691 {{FOOT NOTE}}