' FAKHRUDDIN H. SHAIKH, J.--By this Constitutional petition the petitioners have challenged the orders of 1st Labour Court, Karachi dated 4th May, 1976 and Sind Labour Appellate Tribunal, Karachi dated 13th April, 1977 whereby the Labour Court and the Appellate Tribunal had upheld the claim of respondent No, 1 for gratuity set up by the said respondent in his application under section 25-A of the Industrial Relations Ordinance 1969.
2. The facts of the case leading to this Constitutional Petition are as under :- Respondent. No, 1 joined service with the petitioners as Market Research Officer'. After completing about 14 years' service, he resigned on 15th August, 1975. His resignation was accepted and all his dues were cleared on 20th August, 1975. He was also paid Provident Fund amounting to Rs, 18,530.26 which included contributions of respondent No, 1 amounting to Rs, 9,265.13 and contribution of the petitioner's Company amounting to Rs, 9,265.13.
3. After receiving the above dues respondent No, 1 sent a notice to his employee i,e, petitioner- Company on 128th October, 1975 complaining that his claim of gratuity guaranteed and secured under the provisions of law, has not been satisfied. By this notice he required the petitioners to pay up the amount of gratuity within 15 days. The petitioners refuted the claim of respondent No, 1 in respect of gratuity and sent a reply accordingly relying on the provisions of West Pakistan Industrial and Commercial Employment Standing Orders Ordinance, 1968. They also quoted proviso to clause
(6) of Standing Order 12 in support of their plea that no gratuity was payable to the respondent. The latter, therefore, filed application under section 25-A of the Industrial Relations Ordinance, 1969 before the 1st Labour Court which decreed his claim for gratuity amounting to Rs, 14,375. The learned Appellate Tribunal also agreed with the finding of the Labour Court.
4. Learned counsel for the petitioners has challenged the two impugned orders mainly on the ground that the agreement reached between the petitioner's Company and the employees (which is Annexure 'D' to the petition) did not envisage payment of gratuity to an employee who had put in less than 15 years' service. The said agreement came into effect from 1st January, 1969. It has not been disputed that respondent No, 1 is covered by the definition of worker' under the Standing Orders Ordinance and that he is also entitled to the benefits of the provisions of the agreement (Annexure `D').
5. According to clause 1 of this agreement, gratuity scheme was instituted to the following effect :- "1. Gratuity.-Management agreed to institute a gratuity scheme on the following basis to the workmen :
(1) On the completion of 15 years' service upto 17 years (1 1/2) months' basic pay per year) OR
(2) On completion of 17 to 20 years service (3/4 months' basic pay) OR
(3) 20 years (1 month's basic pay) OR ' Maximum gratuity payable 20 months' basic pay. One month's basic pay as gratuity for the number of years worked will be payable on death, physical or mental disability, forced retirement by the company and retrenchment. A worker whose services are terminated on account of misconduct will not be entitled to gratuity. If at any future date pension scheme is introduced, the gratuity scheme will be withdrawn. This rule will come into effect from 1st January, 1969. Gratuity on death will be paid to the legal heirs and may be recognised by the Company. Compulsory age of retirement is 55 years. And if a workman is allowed to be in service after the age of 55 years, he cannot utilise that extra service years to the benefit of gratuity."
' It would, therefore, be clear that in order to be entitled to gratuity, respondent No, 1 had to prove that his case falls under any of the clauses of the Scheme quoted above. He has based his claim mainly on this agreement. The admitted position is that he had put in only 14 years 6 months of service with the Company. This fact is admitted by him in his grievance petition under section 25-A of 1. R.
0. Which is Annexure `J' to the petition. In para. 6 of the grievance application he says that he has served the petitioner-Company for 14 years and more than 6 months. It is nowhere claimed that he has completed 15 years' service. Both the learned Courts i,e, Labour Court (Respondent No, 2) and the Appellate Tribunal (Respondent No, 3) have failed to observe this basic condition which was sine qua non to a claim for gratuity to an employee under the said agreement. Hence if the agreement alone is to be relied upon, then respondent No, 1 was not entitled to gratuity and both the above Courts have fallen in obvious error of fact in holding that respondent No, 1 was entitled to gratuity under the scheme.
6. Mr. Fazal Bhoy learned counsel for respondent No, 1 has argued that the petitioners had not raised this plea either before the Labour Court or the Appellate Tribunal and, therefore, they cannot be allowed to set up this plea in this petition. In this behalf reference may be made to the case of Employees Welfare Union v. R. B. Industries Ltd., Karachi (1) in which it has been held that if an authority has erroneously come to a finding of fact or of law which goes to the root of jurisdiction of the authority, then the High Court shall be competent to interfere with the orders of the authority in exercise of writ jurisdiction. In the present case the very entitlement of respondent No, 1 to gratuity was based on the gratuity scheme as en-visaged in the agreement (Annexure D') . If the case of the respondent did not fall within the scheme, the Labour Court will have no jurisdiction to allow a claim for gratuity if it is based on the agreement alone. As this basic fact, which affects the very jurisdiction of the Labour Court and the Appellate. Tribunal, is overlooked, then the petitioners shall not be precluded from raising the plea, based on omission of such fact, as held in the case cited above. There is no substance in the plea of the learned counsel for respondent No, I that the petitioners are precluded from contesting the claim of respondent No, 1 on the ground that the plea of completion of
(1) PLD 1976 Kar. 297 15 years' service was not raised before the Labour Court and the Appellate Tribunal.
7. Mr. Fazal Bhoy has also relied on Standing Order No, 12 (6) which provides that a workman shall be entitled to payment of gratuity equivalent to 20 days wages for every completed year of service or any part thereof in excess of 6 months. The learned counsel has, however, conveniently forgotten the proviso which is added to Standing Order 12 (6) and which is to the following effect:-- Provided that, where the employer has established a Provident Fund to which the workman is a contributor the contribution of the employer to which is not less than the contribution made.By the workman, no such gratuity, shall be payable for the period during which such Provident Fund has been in existence."
8. The learned Appellate Tribunal also fell in error in holding that in spite of the said proviso, respondent No, 1 was entitled to gratuity because the gratuity scheme was instituted in 1961 whereas the Standing Orders Ordinance came into force later in 1968, S.
0. 9 whereof saved any law, custom, usage, award or agreement effective immediately before the promulgation of the Ordinance. Here also the learned Appellate Tribunal fell into error by referring to S.
0. 9 of Standing Orders Ordinanc which were deleted from the Statute by the West Pakistan Industrial and Commercial Employment (Standing Orders (Amendment) Act, 1973 which is Act XXIII of 1973. Thus at the time of the institution of the grievance application before the Labour Court S.
0. 9 was no more part of the 1968 Ordinance. Thus on none of the grounds urged by the learned counsel for respondent No, 1, the claim of gratuity of respondent No, 1 could have been accepted by respondents Nos. 2 and 3.
In view of the legal position stated above the petition is allowed and orders of both the respondents Nos. 2 and 3 impugned in this petition are declared to have been passed without lawful authority. There shall be no order as to cost.