AWARD AGHA IMDADALLY (CHAIRMAN): In this case reference was made by the then Government of West Pakistan on 24th March 1970 under section 32(3) of the Industrial Relations Ordinance, 1969 (hereinafter referred to as "the-Ordinance") for adjudication and determination of an industrial dispute which had arisen between the Management the Workers of the Shamsi Cloth and General Mills, Karachi after the Government had prohibited the strike by the Workers under section 32(2) of the said Ordinance. In this Order of reference the second endorsement below it mentions that copy of it was forwarded to the Chairman of this Court and further says that the Zonal Directorate Labour Welfare, Karachi, will furnish a copy of Charter of Demands of the Workers. The other endorsement thereafter in the reference order shows that copy of the order was forwarded to the Zonal Directorate Labour Welfare, Karachi for information and necessary action and he was requested to despatch a copy of Charter of Demands of the Workers to this Court under intimation to the Labour Department. When the order of reference by Government was received in this Court, the record shows that alongwith it copies of strike notice served by the Workers on the Management and Charter of Demands on behalf of these Workers were also found accompanying the order so sent.
2. On receipt of the order of reference and its accompaniments aforesaid summonses were issued to the contending parties, and the Workers filed a statement of their claims and so also thereafter the Management filed reply statement. Alongwith reply statement certain preliminary legal objections on behalf of the Management in writing were also lodged. These preliminary objections may be reproduced as contained in this application itself and they are as follows:
(1) That the contents of paragraph one of the written state spent 4te not denied.
(2) That the contents of paragraph two of the written statement needs no comment.
(3) That the contents of paragraph three of the written statements are not true and hence denied.
(4) That it is denied that the financial position of the respon--dent is "sound" or that this mills has been "squeesing sizeable profits". These phrases are as commonly used by the Trade Unions that they have lost much of its claim and sympathy. The respondents have ail along believed in a policy of natural good--will and adjustment and since the very formation of the Union have entered into settlements, the last of these settlements was concluded on 13th March 1969 and is yet in operation.
(5) That the-strike resorted to for 86 days in pursuance to strike motion dated 8th December 1969 was illegal for the following amongst other grounds:
(a) That on 18th June 1965 a settlement was concluded with the applicant-Union. Copies thereof were endorsed to the Conciliation Officer and apparition Government copy of settlement Annexure "A".
(b) That on 22nd August 1966 another settlement was concluded with the applicant-Union. Copies thereof were also endorsed to the Conciliation Officer and the Government. The charter of demands and settlement are Annexure ---B--- and ---C---
(c) That on 20th April 1967 settlement was concluded copy being endorsed to the appropriate authorities Settlement Annexure ---D---.
(d) That on 30th December 1967 yet another settlement was reached by the respondents with the applicant-Union in pursuance to ~ charter of demands. Copy of this settlement was also endorsed to the Conciliation Officer and the Government Charter of demands and settlement Annexure "E" and "F" respectively.
(e) That on 31st January 1969 yet another settlement was signed between the applicant and the respondents on the basis of a ten demands Charter presented by the Union. Copy of this settlement was also endorsed to the concerned authorities Charter of demands and the settlement Annexure "G" and---H---.
(f) That finally on 13th March 1969 a memorandum of settlement was concluded in the course of conciliation proceedings wherein the Union committed itself not to raise any demand involving financial liabilities or the Management except Bonus during the period of operation of the settlement Copy of the settlement Annexure "I".
(g) That no notice of termination of settlement has so far been received in respect to any of the settlement referred to above except settlement dated 13th March 1969 and this notice was served on 20th March 1970 on or about the time when a reference has been made by the Government to the Hon'ble First West Pakistan Labour Court, Karachi, for adjudication of the dispute.
(h) That the strike was illegal within the contemplation of section 46 of Industrial Relations Ordinance, 1969, and as such the workers are not entitled to any wages for the strike period.
(6) That since the strike resorted to by the applicant-Union was illegal, it was not open to the appropriate Government to prohibit the continuance of the strike and as such the presentreference by the Provincial Government under section 32 of Industrial Relations Ordinance, 1969 is ultra vires the powers of the Government and as such does not confer jurisdiction to this Hon'ble Court to adjudicate the dispute.
(7) That the reference is further invalid inasmuch as the demands to be adjudicated by this Hon'ble Curt have not been referred to by the Government in the Gazette Notification."
3. On the application raising the preliminary objections the Court after hearing the Representatives of the parties ordered that these objections be taken up and decided first and both the parties were also allowed to adduce evidence in support of their contentions if they so desired. The Workers then produced six witnesses namely, Mr. Nabi Ahmed, Mr. Abbas Jalali, Mr. Mohd Maroof, Mr. Khursheed Ali Rizvi, Mr. Wali Mohammad and Mr. Khursheed Hasan whose evidence was recorded. The witnesses produced numerous documents. The Management examined only one witness namely, Mr. Sultan Ahmad.
4. The matter was then fixed for arguments on these preliminary objections and I heard both the learned Representa--tives for respective sides at very great length.
5. Before I take up to discuss the contentions raised in these arguments it will be advantageous to refer to the facts forming arguments background of this case. These facts are thus.
6. It appears that disputes and differences between the Workers and the Management of the Shamsi Cloth & General Mills, Karachi, have existed since the year 1965 continuously with a result that until the present reference was made the contending parties had settled their disputes from time to time and by now as many as six settlements have been executed by them as brought out in the evidence. The first settlement, Exh. R-6 was signed on 18th June 1965, second Exh. R-3 on 23rd August 1966, third Exh. R-7 on 20th April 1967, fourth Exh. R-10 on 13th December 1967, fifth Exh. R-13 on 31 January 1969 and the sixth, the last, Exh. R-12 on 13th March 1969. It is admitted by the contesting parties that all the previous four settlements up to and including the one reached on 30 December 1967 Exh. R-10 no longer continued to operate as their periods, has run out because each of these settlements was binding by being specifically mentioned up to the 31st of December of the respective years in which these settlements were, arrived at. The undisputed position now, therefore, is that only the settlement Exh. R-13 dated 31st January 1969 and Exh. R-12 dated 13th March 1969 are left to be considered as a subject-- matter for some of the contentions raised by the parties.
7. As reference has to be made to these two last mentioned settlement it is necessary to refer to certain relevant clauses in these ` settlements round which the arguments on behalf of the parties centre. The relevant clauses in the settlement Exh. R-13 dated d 31st January 1969 in its clause (6), which reads, the Union and the Workmen undertake not to make or raise any demand during the period of operation of this agreement". As this j document although described as an agreement should obvious C be considered as a settlement as it is abundantly clear that definition of the word settlement contained in clause (q) of section 2 of the West Pakistan Industrial Disputes Ordinance, 1968 (hereinafter referred to as the "Repealed Ordi--nance") covers it. This agreement as a settlement would' remain in operation for a period as provided by the terms of section 19 of the Repealed Ordinance as it was reached between the parties when this Ordinance was in force.
According to subsection (2) of this section as this settlement Exh. R-13 does not specify the period for which it was to remain in operation therefore by the terms of this subsection (2) its period of operation would be two years from the date on which it was signed by the parties and shall continue to be binding on the parties after the expiry of this period until the expiry of two months from the date on which a notice in writing of intention to terminate the settlement was given by the one of parties to the other or parties to the settlement. In the instant matter nobody's case that notice for termination of this settlement Exh. Any party gave R-13. But subsequent to this settlement the parties after a few months of its execution again entered into, as is clear from what is mentioned above, the settlement Exh. R-12 dated 13th March 1969, which in my opinion would determine the question of period of operation of the settlement Exh. R.13. In this Settlement Exh. R-12 as admitted by both sides the relevant clause is its clause (9) which reads, "It is agreed that the Workmen and the Union shall not raise or make any demand involving any financial liabilities to the Management except bonus, during the period of operation of this settlement without prejudicing their any legal right". In my opinion, therefore, although in the settlement Exh. R-13 dated 31st January 1969, the Workers had undertaken not to make or raise any demand during the period of operation of that settlement but since only, after a few months another settlement was reached between the parties Exh, R-12 dated 13th March 1969, obviously the proceeding settlement Exh. R-13st th would stand superseded by the settlement Exh. R-12 and the entire position regarding 4he rights and liabilities of the parties vis----vis each other would be governed by this settlement in accordance with its clause (9) already reproduced above. This clause (9) clearly states that the Workmen and their Union would not raise any demand involving any financial liabilities to the Management except bonus during the period of operation of this settlement without prejudicing any of their legal right, which they possess.
8. The learned Representative for the Management has in his argument raised three points and no other. His first contention is that the last settlement between the parties Exh. R 12 dated 13th March 1969 precludes the Workers from raising any demand against the Management as now brought forth by them because it is still binding on the parties as its period of operation has not run out. This period, he contends, is two years subject to termination of the period by notice from either side in writing as laid down by section 19(2) of the Repealed Ordinance. His second contention is that the reference order- by the Government does not mention the demands of the Workmen to be adjudicated upon nor it mentions or reproduces these demands by way of a Charter in the order itself, therefore, the reference is void as such all the demands referred for adjudica--tion be rejected. The third contention urged by him is that on the facts shown by him in, the application for preliminary objections the strike was illegal, therefore, no reference under section 32(3) of the Ordinance could be made by the Government as such this reference be held as void.
9. All these three contentions have been opposed by the learned Representative for the Workmen.
10. I would take up for discussion the contentions in the order they lave been raised and just mentioned above.
11. For appreciating the first contention that the last settlement between the parties Exh. R-12 aforesaid precluded the Workmen from agitating the present demands. It will be necessary to reproduce these demands which are specified is the Charter of demands that was found annexed to the order of reference when it was received in this Court as stated earlier. This Charter of Demand mentions the following demands :-
(1) (a) Whereas should be paid by off Benefits/Compensation for the loans in wages for the day/days caused due to their return after their coming on duty for non-replenishment of Bears on loose seen after the exhaustion from 13th March 1969 to 20th May 1969.
(b) Workers returned or laid off after detention for more than prescribed time limit due to power failure on ' 3rd May 1969. On 10th May 1969 should be paid full wages for both days.
(2) (a) 10 days' casual leave not allowed since March 1969 to the workers till June 1969 should either be credited to their Leave Account or paid in Cash in lieu.
(b) Book-proof procedure for applications and grant should be settled.
(3) All absence worked in Attendance Sheets in spite of applications by the workers and for paid Festival Holidays on 27th October 1969 should be corrected and not be used against the workers.
(4) Identification should be issued soon after entry in instead several months.
(5) The rates of wages for New System of Drawing of warps through, Healds, Needs and Droppers should be given Rs. 3.50 per. 1000 warps with effect from 1st September 1969.
(6) The wage rate of all workmen excepting unskilled should be raised to such extent as to maintain the difference in their respective wages and that of unskilled which are before the Minimum Wages Board. Award dated 15th December 1969. This increase should be with effect from 1st July 1969, as it has necessitated due to Government Decision of fixing Minimum Wage for unskilled at Rs. 140.
(7) All Packing Department workers should be designated and treated no skilled workers.
Designation changed on Attendance Cards as collies should be re-shown as packers.
(8) Workman Alif Dean, Khan Bux, Abdul Latif, Hahia Shah and Baqar Khan who operate Jiggers should be designated and treated as such for all intents and purposes.
(9) Workman Inayatullah Khan s/o Barkatullah, Helper workshop should be taken back on duty with retrospective effective effect.
12. The argument raised in support of the first conten--tion precisely is that all the demands, now referred for adjudication raised by the Workmen as shown in the Charter of Demands (reproduced above) are demands which involved financial liabilities to the Management and obviously there, is no demand claiming bonus which has been excepted from the last settlement Exh. R-12 as such in accordance with this settlement the Workmen are precluded from agitating these demands The question for determination essentially is to ascertain whether all the demands mentioned id the Charter of Demands really would involve financial liabilities to the Management. A perusal of these demands in Charter would show that except for the demands 2(b), 7 and 8 all the other demands would involve financial liabilities for the Manage--ment to meet. I am, therefore, convinced by the contention that except for these three demands just mentioned the rest of the demands in the Charter cannot be agitated by the Workmen as I am of the view that the last settlement Exh. R-12 to all intents and purposes, as far as the present proceedings are concerned, would have to be held as binding and operative at least until the time the Reference was made by the Government. I may so for the simple reason that it cannot be disputed that this last settlement so far its period of operation is concerned would be governed by the provisions of section 19(2) of the Repealed Ordinance unless, as provided by this very provision, notice of termination by either party in writing is given to the other even after the expiry of the period of two years for which the settlement is to run and be binding, or when this notice in writing may be given earlier the date of such notice. In this case it has been brought on record in evidence that notice in writing dated 20th March 1970 was given by the General Secretary of the Union of Workmen to the Management stating that the last settlement between them Exh. RA2, dated 13th March 1969 would stand terminated after two months from the receipt of the notice. This document is Exh. R-15 on record. It is abundantly clear that even if we take into account this notice the, settlement Exh. R-12 would stand terminated on 21 March 1970. The reference by the Government in this case was however, made 'on 24th March 1970 as said earlier and the point of time to be taken into account for adjudicating upon the present demands would be date on which the reference was made as the position of 'the Industrial Dispute under adjudication now would have to be considered as on that date, therefore, on this date the present demands by the Workmen could not be agitated except for the three demands mention by me already which do not involve financial liabilities. The workers, would, however, which is needless to say, be a liberty to re-agitate all the demands involving financial liabilities to the Management as now brought forth againin accordance with the relevant law if they so desire.
Hence I find that except for the three demands mentioned already which do not involve any financial liability to the Management all the other demands contained in the Charter cannot be adjudicated upon in the present proceedings for the purpose of these proceedings the Workmen are precluded from raising these demands as such accordingly these demands are rejected for the purpose of this case.
13. I am also supported in this view by the rulings which are cited by the learned Representative for the Management-- and these are 1966 P L. C 274; 1968 PLC 335 and 1960 PLC 35 which is a decisionby our own Supreme Court.
14. However, despite this correct view which has to be taken on the point under consideration the learned Representative for the Workmen still contended that subsequent to the last settlement Exh: R-12 the circumstance and conditions for the Workmen had materially changed as established, according to him, by the evidence of the six witnesses adduced by their side as such it should be held that the last settlement was no longer binding soon after it was executed, therefore, the present Industrial Dispute raised by these Workers was properly re-agitated and can be adjudicated upon in the present proceedings. In this connection he relies upon the provisions ofst the proviso to subsection (3) of section 40 of the Ordinance. It will be advantageous to repro-- duce the entire section 40 in order to appreciate this contention.
Section 40 is in the following terms:-- "(1) A Settlement shall become effective:
(a) if a date is agreed upon by the parties to the dispute to which it relates, on such dates ; and
(b) if a date is not so agreed upon; on the date on which the memorandum of the settlement is signed by the parties.
(2) A settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, a period of one year from the date on which the memoraa4um of settlement is signed by the parties to the dispute aid shall continue to be binding on the parties after the expiry of the aforesaid period until the expiry of two months from the date on which either patty informs the other party in writing of its intention no longer to bye bound by the settlement.
(3) An award given under subsection (1) of section 37 shall, unless an appeal against it is preferred to the Tribunal, becomes effective on such date and remain effective for such period, not exceeding two years, as may be specified therein. The Arbitrator, .the Labour Court, or, as the case may be, the Tribunal, shall specify dates front which the award on varies demands shall be effective and the time limit by which it shall be implemented in each case Provided that if, at any time before the expiry of the said period, any party bound by an award applies to the Labour Court which made the award for reduction of the said period on the ground that the circumstances in which the award was made have materially changed, 'the Labour Court may, by order made after giving to the other party an opportunity of being heard, terminate the said period on a date specified in -the order.
(4) A decision of the Tribunal in appeal under subsection (3) of section 36 shall be effective from tile date of the award.
(5) Notwithstanding the expiry of the period for which an award is to be effective under subsection (3), the award shall continue to be binding on the parties. until the expiry of two months from the date on which either party informs the other party in writing of its intention no longer to be bound by, the award."
15. By mere perusal of section 40 reproduced above and particularly the proviso to subsection (3) of it, it will be seen that it is abundantly clear that it is with regard to the reduc--tion of the period of duration for which an "Award" is no operate when after the circumstances in which the award was made have materially changed. It does, not speak or oven by any stretch of imagination refer to a "settlement" arrived at between the parties. In my opinion this proviso has been advisedly so worded by the Lawmakers .in order to touch only an "Award" which is passed by a Labour Court and "a Settlement" "arrived at between the parties as defined in the Ordinance is left untouched. The object and the principle underlying the exclusion of the words "or Settlement" after the word "Award" in the proviso is obvious because an award is a decision which is super-imposed by the Labour Court on the parties to have as such provision has been made by way -of this proviso to allow the parties to have their redress from the Labour Court in case material changes in the circumstances take place subsequently which are found to be creating different situation from that obtained tit the time when the Award was made. Justice and fair play also, in my opinion, justify the insertion of this proviso to subsection (3) of section 40 of the Ordinance. But on the other hand it will be seen that no similar provision is made in respect of a "Settlement" as a settlement in a compromise priv4tely arrived at between the parties thereto as such it carries more sanctity than an Award of the Labour Court which is a super-imposed decision on the parties upon adjudication of their disputes. The learned Repre--sentative for the Workmen concedes that identical provisions as the pr-sent one as contained 'in this proviso also existed in Industrial Disputes Act of 1947, Industrial Disputes Ordinance, 1969 and the Repealed Ordinance, 1968. He has cited numerous authorities in support of his contention under discussion also but it is no use enumerating these reported cases as it has not been shown to me that they apply to the case of a "Settlement" which now arises for consideration.' Hence all these authorities are of no avail to him on this point. On the contrary the learned Representative for the Management has cited a reported case precisely on this point and which has full bearing on it and is a decision on the identical provisions as contained in the Industrial Disputes Act, 1947 which case has been decided by Bombay High Court and is reported in Indian Factories Journal, Vol. XII at page 169 wherein this point decided in the following terms :- "When the Legislature provides for particular agreement being binding upon the parties to an industrial dispute, it clearly intends that there is industrial place with regard to the subject-matter of the agreement for the duration of that agreement, and it is obvious that if there is to be industrial peace for the period contemplated, then neither party to that settlement can be allowed to raise an industrial dispute with regard to that settlement.
Considerable light is also thrown upon the proper construc--tion of section 19(2) by the provisions contained in that section with regard to an award. An award is a super-imposed decision and the parties to the award have to abide by it whether they like the terms of the award or not, and in the case of an award specific powers are given to Government to curtail its duration, to extend it, and in cases where Government considers that since the award was made there has been a material change in the circumstances on which it was based, to refer the award or part of it to a Tribunal for decision whether the period of operation should not by reason of such change be shortened.
Therefore, it is clear that but for this specific provision with regard to an award the position of an award in law would have been the case as that of a set0ement. An award being as binding in Its nature as a settlement, the Legislature had to give specific power to the Government to interfere with the finality of that award by empowering Government to refer it to a Tribunal under - circumstances mentioned in section 19(4). But the Legislature advisedly did not confer that power upon Govern--ment with regard to a settlement arrived at between the parties, and the reason for the Legislature not doing so is obvious. As already said, an award is not the result of an agreement between the parties. It is something super-imposed upon them by the force majoure of law. But a settlement in a purely voluntary matter and parties may or may not arrive at a settlement. But when parties do arrive at a settlement the law gives to it a greater sanctity than it gives to an award, and, therefore, the industrial law does not contemplate any interference with the finality of a settlement and it compels the settlement to run on for the period mentioned in the settlement itself and neither party is permitted to challenge that settlement during its duration. If the subject- matter of an award or a settlement could be raised as an industrial dispute, then it is clear that there was no reason for the Legislature specifically to confer power upon Government with regard to referring an award for adjudication. In the absence of any much specific provision with regard a settlement, it is clear in our opinion that neither any industrial dispute can be raised with regard to the settle--ment nor can matters covered by that settlement form the subject-matter of conciliation proceedings under section 12.
In taking the view that we are, deciding anything which is prejudicial to the rights of labour. If we were to accept the contention put forward by Mr. Bhandare, it would become extremely difficult, for employer and employees to arrive at any settlement without first going to a Conciliation Officer. If the law was that a private settlement of an industrial dispute could not be arrived at which could be recorded by the Conciliation Officer and which could be made binding, then it would be very difficult to, induce parties to arrive at any such settlement, because the whole of Mr. Bhandare's argument revolves round this that it was open to the workers of opponent No. 2 company the next day after they had arrived at this agreement to resile from that agreement, Industrial peace demands that sanctity should be attached to agreements freely arrived at by the parties and if the view went abroad that private settlement have no sanctity whatsoever, then there would be little chance of dispute ending by settlement between the parties. It will indeed be extremely unfortunate from the point of view of labour."
16. This ruling has also been quoted with approval in a decision by Dacca High Court in 1960 PLC 166.
17. I, therefore, find that for what has been said and discussed above it is abundantly clear that the duration of the operative period of the last Settlement. Exh. R-12 between the parties for the purposes of these proceedings cannot be reduced as there is no provision in law to enable this Court to do so. In this finding I am also further fortified by the fact that if accord--ing to the Workmen the last Settlement could be challenged due to material changes in the circumstances subsequently from these obtaining at the time when it was reached there was no necessity for them to have served the notice of termination of this Settlement on 20th March 1970 Exh. R-15 on the Management seeking to, bring it to an end, 2 months thence, which clearly shows that they themselves were of the view that the last settlement was binding on them .until it was terminated about 2 months even after the References by Government. Obviously under these circumstances no relief can be granted to the Workmen due to any change of circumstances as i9 now claimed.
18. The next contention raised by the learned Representa--tive for the Management was that, to repeat in simple words, the reference by the Government was void as the Charter of Demands had not been reproduced in the order of reference itself as this order specifically in its endorsement below the, order directed the Zonal Directorate, Labour Welfare, 'Karachi to furnish the Charter of Demands to this Court. I have already said oft this point that when the order of reference was received by this Court it was accompanied by a copy of the Charter of Demands. Nevertheless the learned Representative for the Management in support of his contention has cited 1960 PLC 205 which is a decision of our Supreme Court but a bare perusal of this reported case will show that in that case the reference by Government was held to be void and illegal because it was found to be in general terms regarding a single dispute. It has also been observed therein that before making a reference to a Tribunal the Government should know what is the precise matter -in dispute upon which it proposes to invite a binding adjudication by the Tribunal as the Conciliation Officer had reported the existence of a single question or dispute between the parties, and on that very day the Government just referred a general Industrial Dispute" to the Tribunal. Obviously this is not the case in the instant matter as such on this short ground itself this ruling is distinguishable and of no avail to the Management. At best, regarding the point under consideration, it can be said that the objection raised is a highly technical one which has caused no prejudice to the Management at all or for that matter even to the Workmen and what is more is that a copy of the Charter of Demands was also appended to the order of reference when this order was received in this Court as such the present contention is untenable and of no legal consequence.
19. The third contention raised by the learned Representa--tive for the Management is that in view of the last settlement Exh. R.12 subsisting at the time when .the strike was staged by the Workmen in order to raise the present Industrial Dispute by serving a strike notice on 18th December 1969, the Workmen were precluded from agitating adjudication of the present demands, therefore, the strike was illegal as such the consequent reference order was also bad and void in law. I have already held above that the last settlement between the parties as the position now is clear does not cover three demands also specified by me above as such it cannot strictly speaking be said that the strike at least with reference to these three demands would be illegal. In this view of the matter obviously for the purposes of agitating the said three demands, which are not affected by the last settlement from being precluded to be raised, there is no bar to the present proceedings going ahead with respect to them and these demands being adjudicated upon and determined by the (Court. No authority in support of the present contention by the learned Representative for-the Management has also been cited that when some of the demands have been properly raised for adjudication but as respects others the strike was illegal, therefore, the entire reference consequent upon that strike should be illegal. I, therefore, hold that the three demands mentioned by no which are not affected by the last settlement adversely can be adjudicated upon and decided by this Court.
20. For the foregoing reasons the application raising the preliminary objections is partly allowed to the extent that the demands Nos. 1, 2(1), 3, 4, 5, 6 and 9 cannot be adjudicated upon as the Workman are precluded from agitating them in the present proceedings subject to what I have already said about it as to their right to raise them again but Demands Nos. 2(b), 7 and 8 would be tried and adjudicated upon. The case may accordingly be now fixed for deciding these three demands.
Announced in open Court.