' This is an application under section 50 of the Industrial Relations Ordinance, 1969.
2. Applicants are United Insurance Company's Employees' Union and the respondents are United Insurance Company of Pakistan Ltd., Karachi. A settlement was arrived at between the parties on 28th April, 1980 in respect of charter of demands submitted by the applicants to the respondents.
The charter of demands pertained to the wage increase, grant of loans and increase in the casual and sick leave to the workers employed in the said respondent Company. However, after execution of the said settlement, the Federal Government promulgated Ordinance No, XXXII of 1980 on 26th June, 1980, making an amendment in the Employees' Cost of Living (Relief) Act, 1973, directing all the employers to make payment of Cost of Living Allowance (C.
0. L. A.) equal to Rs, 40 per month to every employee with effect from 1st July, 1980. The above Cost of Living Allowance was in addition to the Cost of Living Allowances payable under the provisions of subsections (1), (2) and (3) of section 3 of the Employees' Cost of Living (Relief) Act, 1973. That the management of the respondent company did not make payment of Cost of Living Allowance to its employees which became payable with effect from 1st July, 1980 at the rate of Rs, 40 per month. It is the case of the applicants that the respondents kept them on false promises and finally replied that in view of the settlement, dated 28th April, 1980, the applicants were not entitled to the Cost of Living Allowance at the rate of Rs, 40 per month. A letter was addressed to the respondent Company which was replied on 9th August, 1983, Annexure '13' declining the request of the applicants for the payment of the said Cost of Living Allowance.
3. The respondent Company took shelter of the wage increase allowed in the settlement, dated 28th April, 1980 and, therefore, pleaded that the statutory allowance of Rs, 40 could not be given. '
Therefore, this application is made for interpretation and removing difficulty thereof in the reading of the settlement arrived at 28th April, 1980.
4. ' The reply to the application is submitted by the respondent and reiterated that the Cost of Living Allowance of Rs, 40 payable with effect from 1st July, 1980 was liable to be set off against the amount payable under agreement or settlement reached under Industrial Relations Ordinance, 1969, it has been announced and became effective after the settlement of 28th April, 1980. The special allowance ranging from Rs, 80 to Rs, 125 per month agreed to be paid by the employer in the said settlement in response to the demand for a general increase of Rs, 150 claimed by the applicants in the basic salary was liable to be set off against the Cost of Living Allowance of Rs, 40, This is the stand taken by the respondents Company. After the expiry of the said settlement, it is contended that a fresh charter of demands to the respondents was made on 9th March, 1981, and ultimately in pursuance of the conciliation proceedings which were held between the parties a settlement, dated 9th October, 1982, was signed by them. The settlement became effective from 1st January, 1982 and will remain in force until 31st December, 1983. It is contended further that the special allowance which was introduced by the settlement, dated 28th April, 1980, was increased by raising the amounts ranging between Rs, 77 and Rs,
103. It is further stated that the aforesaid increase in the Special Allowance was granted with the intention to give the employees relief due to rise in the Cost of Living. Thus, the applicants are not entitled to the payment of Cost of Living Allowance in view of the settlements of 28th April, 1980 and 9th October, 1982.
5. I have heard Mr. M. M. Jeelani on behalf of the applicants and Mr. M. A. Khan on behalf of the respondents management Mr. M. A. Khan has also submitted written arguments in this respect.
6. It is to be seen that the amendments made into the Act of 1973 was statutory payment of Rs, 40 specifically towards the Cost of Living Allowance and if the parties have arrived at a settlement.
Then the settlement so arrived at, must mention that the increase to the allowances included the Cost of Living Allowance of Rs,
40. Now, let me refer to the Annexure 'A' which is recital of the memo of settlement, dated 28th April, 1980. In the memo. The recital of demands does not carry the Cost of Living Allowance (C.
0. L. A.) whatsoever as the amendment had come subsequently on 26th June, 1980. It was the wage increase at Item No, which was raised from Rs, 80 to Rs, 125 per month. The Management had agreed to grant special allowance to the employee payable every month as detailed from Rs, 80 to Rs, 125 do not specifically mention the statutory allowance (C. O. L. A.) granted by the statute. This allowance, in my view, do not carry the allowance of Rs, 40 to be included in the said increase.
Further, on perusal of the settlement, the items, revision of pay, special allowance with regard to scooter loans and other casual and sick leave do not cover the special demand of Cost of Living Allowance. The only clause which is in the Annexure 'A', namely, 'It is mutually agreed by both the parties that this settlement shall remain force and binding upon the parties and their respective successors for the period expiring on 31st December, 1981 and that during this period the shall not raise any kind of demand involving financial implications. This appears to me a weak defence and the payment of Cost of Living allowance according to Law, in spite of this clause in the agreement, is . Payable to the workers. Then the second agreement, dated 9th October, 982 at Exh. R-2, is perused by me and it carries the wage increase, special allowance, scooters loans, gratuity fund, direct recruitment etc. In this settlement, the Management had agreed special allowance payable to every employee as detailed from Rs, 77 to Rs,
103. This settlement also owes not carry specifically the payment of Cost of Living Allowance. The intention once again by the respondent Company is that no further agitaion may be made regarding financial implications in this behalf. The payment of Cost of Living Allowance was kept aside or was not mentioned the increase of wage allowance.
My interpretation is that the clause wage allowance' does not include Cost of Living Allowance, and it is got be paid to the employees.
7. Mr. M. A. Khan has given in writing his submissions and has contended that the demand made with regard to Cost of Living Allowance was hit by latches and, therefore, it cannot be paid. He maintains that the settlement arrived at on 28th April, 1980 and again the settlemet arrived at on 9th October, 1982 carried the increase in the wage allowance included the Cost of Living Allowance.
On perusal of the two settlements and the Charter of Demands, one gets an impression that in the Charter of Demands nowhere the word 'Cost of Living Allowance' is mentioned, not even in the Charter of Demands in the settlement, dated 9th October, 1982. The Charter of Demands was with regard to the increase in the wage and other benefits but it did not include the Cost of Living Allowance which the employees thought is automatically given on separate basis. This is clear from the letter, Exh. R-4 by the applicants union. I may quote the letter as under :- "Dear Sir, ' Of late it is observed that the Management of the company has no regard towards its obligations under the Union-Management agreements and the provisions of Labour Laws, as evident from the following :-
(1) That the Management was is required to pay to the employees a sum of Rs, 40 per month, being the Cost of Living Allowance, with effect from 1st July, 1980, as per provisions of Ordinance No, XXXII of 1980, promulgated by the Federal Government.
' The above matter has been continuously perused vide Union letter/ reminders but to no avail.
(2)
' From this letter, it appears that the item, Cost of Living Allowance was to be paid according to the amendment of Act XXXII of 1980, and it was pursued by the union through letters and reminders but there was no avail. The letters were written and the reminders issued but the company kept quiet and did not decide the matter. This was to be taken as separate issue together and the settlement arrived at do not include the grants with regard to the Cost of Living Allowance. The letters and reminders suggest that there is no delay by the union in this respect and the company went on putting of the matter under cover of the settlements. Thus, the delay of three years is besides the point. In other words, the matter is not hit by doctrine of latches. A number of rulings are cited by the learned counsel but in view of the quotations of the above letter, these citations are not applicable.
8. To summarise the discussion, the two settlements do not cover the payment of Rs, 40 as Cost of Living Allowance as contemplated in the amendment of Act No, XXXII of 1973 and the contentions that the union has kept quiet and acquicesed or waived the claim, is not true. Their letters and reminders are enough evidence in this respect. The statutory increase of the Cost of Living Allowance at the rate of Rs, 40 per month is got to be given to the employees according to Law with effect from 1st July, 1980. The settlements do not cover this allowance. The application is, therefore, disposed of accordingly.