1. DECISION This is an appeal against an Award of the Presiding Officer of Labour Court No. Il dated February I 1; 1974 in an application tinder section 32(1-A) of the Industrial Relations Ordinance, 1969 (hereinafter called the `Ordinance'), The learned Labour Court granted some of the demands.
2. It was contended in the first place by Mr. Kamal Mansur Alam that the settlement dated 30th of April, 1971 was binding on the parties up to the 31st of December, 1972 and, therefore, none of these demands could be raised under the terms thereof. He relied on the following terms, which is at page 187 of the record of the lower Court. It reads as under: "All existing terms and conditions of service shall continue to remain irrevocably in force up to the 31st December, 1972 and binding upon both the parties save to the extent modified, altered or changed by this Agreement."
2. The short answer to this objection appears at page 25 of the records, of the Labour Court. It is a letter addressed to the General Secretary by the Manager of the Company. The relevant portion reads as under: "We are doubtful whether a joint application as agreed between us vide Settlements dated 1-4-72 and 7-4 72 can now be preferred. Since you had raised the dispute, you can take the matter to the Court individually but, on our part, we assure that we feel ourselves bound by the aforesaid settlement and state no objection if you refer the matter to the Court for adjudication."
3. The Company having once agreed to refer the dispute for adjudication cannot now object if the matter has been adjudicated, upon by the Labour Court.
3. In the second place Mr. Karnal Mansur Alam contended that the question of Gratuity should have been confined to the terms of settlement It is para 9 of the Settlement at page 185 of the record of the Labour Court. It reads as under: "(9) Gratuity. As no agreement could be reached on the terms for payment of Gratuity it is agreed that this demand will be left the further negotiation and shall form an Addendum to this Agreement."
4. His contented was that the demand for Gratuity did not include retrenchment, winding up and merger. On the other hand Mr. Obaidur-Rehman's the learned Advocate for the respondent-Union tried to prove from their own, documents that Gratuity also included retrenchment benefits. The earliest document is dated 11-5-1967. This is a Settlement between the Company and the Union. It is at page 463. The following appears under the Head "Gratuity": "Gratuity.-The following wordings shall be added to Clause No. 6-C(i) of the Agreement dated 6th July, 1957 or Retrenchment."
5. The second document appears at page 476. The relevant portion is ~t page 477. This is also a Settlement between the parties. This is between the Company and the Union. The relevant portion runs as under: "Gratuity. On retrenchment an employee shall be entitled to receive a Gratuity on the basis of one month's basic salary for each completed year of service subject to a maximum of 15 months' bask salary." .
6. I would hold that the Gratuity also includes retrenchment benefit as claimed. At any rate it is too late for the Company to raise this objection having agreed to refer the dispute for adjudication of the. Labour Court.
4. Before I take up contentions of Mr. Kamal Mansur I consider ~t necessary to make certain observations in respect of the conclusion arrived at by the learned Labour Court. I find it necessary, as it seems to me that this conclusion has greatly affected the mind of the learned Court in granting till demand of the Union. The observation of the learned Court which runs ag under is not justified: "The income of the Company at Karachi in the year 1961 was Rs. 9 lack and the Company was considered to be one of the most prosperous Insurance Company of the world and was also one of the leading Foreign insurance Companies operating in Pakistan."
7. One is not concerned with what was the income of the Company in 1961 at the present proceedings giving rise to the impugned order were initiated i.e 1972. The case of the Company, on the other hand, was that during the last five years, i.e. From 1966 to 1971 there was underwriting loss of Rs.
8. 6,89,432, This fact is supported by Annexure "I" which is at page 453 of the record of the lower Court attached with the affidavit of Mr. Khemji, Assistant Manager for Pakistan of the respondent- Company. This fact is deposed to in para 13 of Mr. Khemji's affidavit. It is not worthy that there ii no material cross-examination on the fact deposed to in the document Annexure "I" about the loss.
9. The only question that was put to they witness was about the nature of the document. The answer that Mr. Khemji gave is as under: "I see Annexure "I". It is not a balance-sheet. It is statistics front the Head Office at Sydney. This statement shows an increase to premium during five years from 1966-67 to 1970-71."
5. Mr. Obaidur Rehman's Khan, the learned Representative for the respondent wanted me to draw an inference that as there was an increase in the premium there was also profit. An increase in the amount of premium does necessarily mean profit. 'Statistic' means tabulated in numerical facts, the classification, tabulation and study of the nature of statistic. Annexure 'I' is in that sense only an statistics as it tabulated 5 years figures.
6. The other wrong impression of the learned Court was about the alleged directions given by the High Court of West Pakistan, Karachi, in its order dated the 5th of April 1967. The learned Court observed as under: "In this connection it appears that although there were directions of Hon'ble High Court of West Pakistan, Karachi dated 8-4-1967 that the respondent's Company should take reasonable view of all these demands and should prepare a scheme which would be in the best interest of the employees yet no positive step was taken by the respondent to redress the genuine and bona fide grievances of the applicant so as to create harmony and to avoid the unrest amongst the workers which w6uld adversely affect the national interest to a great extent."
7. 1 have gone through the order of the High Court and also requested Mr. Obaidur Rehman's, the learned Advocate of the respondent to point out if there is any such observation of the High Court.
10. The learned Judge while considering the contention of the learned Advocate of the Company about increase in the Contribution of the Provident Fund of the Company from 5 to 8-1 /3 % of basic salary all that he observed was that: "The consideration which weighed with Industrial Court, namely, that the conditions since 1934 have changed, the cost of living has gone up, the value of money is decreasing and the rights and privileges of the labour in this country are being increasingly recognised and that other Insurance Companies are contributing much more than what has been allowed by the Industrial Court are cogent reasons and can--not be lightly disregarded. In my view the direction of the Industrial Court in this respect is reasonable and calls for no interference"
11. There is no such direction as attributed to the High Court.
8. Gratuity as given in the Charter of Demands which is Annexure 'A' to the application dated the 9th February 1972, at page 13 of the record of the Labour Court is divided into three main heads, namely, (a), (b) and (c). Lastly item (c) is divided into sub-heads (i) to (v).
9. The Union claims Gratuity even for those who were dismissed for misconduct. It would appear from an analysis of the examples of the Insurance Company filed by the respondent-Union itself though these cannot be relied upon to support the demand of the Union but if there is anything reasonable it can be followed. In three of the Insurance Companies no gratuity is paid if a workman is dismissed for misconduct. There are however two companies namely Commercial Insurance Company and South British Insurance Company in which if a person is dismissed for having misappro--priated any amount, the amount misappropriated only is deducted and balance, if any, is paid to the workman. I consider that the amount of Gratuity, which is being paid by the company, is very reasonable. Mr. Khemji stated in paras. 15 and 17 of his affidavit as under: --- That prior to January, 1970 Gratuity was based on the basic salary of the employees but with effect from Ist January 1970 the basic salaries and dearness allowances were merged and thereafter Gratuity was based on the consolidated salary. Besides, in January 1970 an increase of .15 % was- given to the employees in their salary and in January 1971 another increase of 9 Y, was granted."
12. Thus there was a net increase of net 24 Y. In salary of the workmen from January 1970 to January 1971 as consolidated salary is now payable as Gratuity. I consider this to be very reasonable and no further increase can be considered. Moreover what is stated in para 15 of the Affidavit of Mr. Khemji has not been challenged in cross-examination. Mr. Khemji has filed Annexure "K" which is at page 435 of the record of the Labour Court to show the Gratuity, which was paid prior to 1-1-1970 and thereafter. The first name is that of Ajara Gopal. His salary was Rs. 100 as prior to January 1970 he would have got only Rs. 100 as Gratuity but if he retired after January 1970 he would be entitled to Rs. 351.90 as Gratuity based on con--solidated salary.
10. The demand as to Gratuity is accepted only to this extent that if a person is dismissed for misconduct which relates to misappropriation or embezzlement the amount misappropriated or embezzled alone will be deducted from Gratuity and the balance shall be paid to the employee.
11. The learned Court without giving reasons has treated the examples of five Insurance Companies to be "Comparable Concerns". The learned Court did not consider the extent of the business carried on by the concerns, the capital invested by them, the profit made by them, the nature of the business carried on by them, their standing, the strength of their labour force, the presence or absence of reserves, dividend declared by them and the prospects of the future of their business- these and all other relevant facts had to be borne in mind. In this connection reference may be made to the case) of William Sons (India) (Private) Ltd. Which was decided by the Supreme Court of India reported in 1962 P VC 1401. In the present case the learned. Court has not considered all these various factors, before treating these five Insurance Companies as `Comparable Concerns'.
13. On the other hand Mr. Khemji in para. 13 of his Affidavit specifically stated that the company's establishment at Karachi is a very small establishment as compared to the other Insurance Companies. This statement goes unchallenged in cross-- examination. I would hold that the appellant-Company's establishment at Karachi is small one as compared to the Insurance Companies. In these circumstances any comparison to the settlement of the Insurance Companies relied upon by the learned Court is not justified.
14. Demand No. 1(b). In case of permanent disablement or death the Gratuity shall be paid at double the rate of entitlements.
15. There is no evidence to support this demand. The settlement filed, and relied upon by the respondent-Union do not support that, double rate of entitlement can be allowed.
16. Demand No. 1(c). Retrenchment, Winding up and Merger etc This demand is sub-divided into 5 headings, i.e. (1), (11), (lit), (w) and (v).
17. Demand C (i)---In case of retrenchment or winding up a retrenched employee shall be paid @ 3 months' salary last down for each year of service as compensation for loss of service.
18. Demand C (ii). The company shall give at least three months' notice of any retrenchment or winding up so as to allow the employee concerned to lock-out for another job and he shall be released immediate; if so desired. The; company will also endeavour to find an alternate employment for members who have been retrenched.
19. Similarly there is no evidence to support this demand.
20. Demand C (i.e). Apart from the compensation for retrenchment as per Demand No. 1(C)(i) above the retrenched members shall also be entitled to full benefits of the Provident Fund, Gratuity, Per, rata Bonus, Encashment of his unavailed leaves and other benefits in accordance with the terms of the agreement irrespective of the period of maturity of his entitlements, This demand is vague, and, therefore, cannot be considered.
21. Demand C (iv). In case of merger with any other company and/or Nationali--sation employees shall be free to join the Group or to avail the Retrenchment/Winding up benefits.
22. The appellant-Company cannot bind the Government or any other Group the Company may join.
23. It will depend upon the terms that would be offered by the Government if it were to nationalise the Company or to which Group the appellant-Company was to join.
24. Demand C (v). In case of retrenchment, desirous employees shall be pre--ferred to allow voluntarily retrenchment with all the compensations of retrenchment as mentioned in Demand No. I (C) (i) & (i.e) above.
25. It is in the discretion of the Company to accept the retrenchment of the person who were to offer himself to be retrenched in place of some one else. The Court cannot take away this discretion of the Company.
26. Demand No. 2.--- Mr. S. Akhtar Hussain Rizvi shall be re-instated as clerk Grade 'B' with retrospective effect and shall be treated as confirmed employee in Grade 'D' with effect from 1st April 1971.
27. Mr. Akhtar Hussain Rizvi, a peon, who was promoted as a clerk on 15th April 1971 but his work was found unsatisfactory and was' reverted with effect from the 21st of July 1971. The demand in respect of Mr. Rizvi was that he should not have been reverted and should be deemed to be a clerk. Finding of the learned Labour Court on Demand No. 2 runs as under: ---It is in the evidence that Mr. Akhtar Hussain Rizvi was initially employ--ed as a peon in the respondent's company and after passing his Matriculation Examination he was made to work as an officiating clerk from December 1970 to March 1971 thereafter he was reverted back to work as a peon but on 15th April 1971 he was again pro--moted as clerk for the probationary period of 3 months. Mr. Akhtar Hussain successfully completed the probationary period of three months and the probationary period even stretched beyond three months but it appears that he was again demoted from clerical post to his original post as a peon on 30-1-1971 with a stigma attached to him that his work did not appear to be satisfactory and also that he should improve his English."
28. On 15th April 1971, he was for the first time appointed on probation of, three months as a clerk. This letter is on page 333 of the Labour Court's record. His probationary period, therefore, would complete on the 31st of July 1971. His services, however, were terminated before he completed p the probationary period. His reversion as a peon, therefore, was in accordance with Standing Order I-C.
29. It runs as under: "(c) A 'probationer' is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months' service therein. If a permanent employee is employed as a probationer in a higher post he may, at any time during the probationary period of three months, be reverted to his old permanent post."
30. I would hold his reversion was in accordance with law and there is no fault which can be found with his reversion.
31. Demand No. 3----- Mr. S. Ali Akhtar Jafri shall be confirmed as Clerk Grade 'A' with effect from 1st May 1971.
32. This demand relates to Mr. Syed Ali Akhtar Jaffery. Mr. Jaffery by order dated, 14-12-1970, which appears at page 331, was ordered try officiate in place of Mr. Brig who was presumeably on leave. It was only 30th April 1971 when. Mr. Baig retired from his service and that Mr. Jaffery was appoint--ed on three months' probation. He vas confirmed by letter dated, 28th July 1971, which is at page 341. A person is entitled to be confirmed only E if there is any vacancy and not otherwise. In December Mr. Jaffery was only appointed to officiate Head of Fire Department in the absence of Mr. Baig. Mr. Jaffery, therefore, could not be confirmed from December 1970. Mr. Jaffery, neither ire equity nor in law would be entitled to be confirmed from December 1970 as at that time there was no vacancy.
33. Mr. Baig seems still in the Pay Roll of the Company. Mr. Jaffery could be con--firmed with effect from the lst. Of August 1971, when his probationary period expired.
34. Demand No. 4-----Mr. A, H. Burhani shall be confirmed as Typist Grade 'C' with effect from lst of August 1971.
35. The next demand is that of Mr. Burhani. He was appointed as a Typist on the 30th of June 1971, page 345 of the record of the-Labour Court on probation for three months. It s true he was appointed on 27-4-1971 but only on temporary basis as a temporary typist. This letter appears on page 343. It is noteworthy that his services could be terminated without assigning any reason. It was only for the first time that he was appointed on 30-6-1971 Mr. Burhani could not claim the period when be-was appoint--ed on clear understanding on temporary basis. It appears that there was no permanent vacancy at that tine. He, therefore, could not be confirmed from the back date namely 27-4-1971.
36. The Award in respect 6f Mr. Burhani is set aside.
37. Demand No. 5.----- Mr. Inayat Joseph-Driver shall be issued an appointment letter and shall be treated a9 confirmed employee with effect from 1st July 1971 and shall be paid wages for the period from August 1971 to November 1971.
38. The next demand is that of Mr. Joseph, who, according to the Union, was a Motor Driver of the Company, The Company's case, however, was that he was Driver of Mr. I. Morris, the Manager of the Company. On behalf of the appellant, reliance had been made on R. W./1/R. It is a letter by Mr. Joseph himself. The learned Court in respect of this letter observed as under: "In the face of denial by Mr. Inayat Joseph, it was the duty of the respondent to have got his signature compared by the hand writing expert."
39. Admittedly Mr. Inayat Joseph was riot produced by the Union. The obser--vation of the learned Court, therefore, need not be considered. If the Union disputed the signatures of Mr. Inayat Joseph on the R. W. 1/R., it should have sent the same to the handwriting expert- for opinion. In these circum--stances I would set aside the Award of the learned Court in respect of Mr. Inayat Joseph.
40. Demands Nos. 6 and 7. Mr. Pyar Ali shall be re-instated with effect from 15th January, 1972 and his services shall be confirmed with effect from 1st November 1971. An adequate space for Staff Lunch Room shall be provided.
41. Demands Nos. 6 and 7 were withdrawn by the Union, and, therefore, not granted by the learned Labour Court.
42. Demand No. 8----Proper arrangement for ventilation and Bath Room shall be made at the working places of the employees.
43. The Court itself considered that the building is situated in a good locality and the Company is paying handsome rent. These facilities must be already available and, therefore, rejected the demand.
44. Demand No. 9(a). The Company shall pay interest on the Provident Fund Amount Rs. 3,41,153.15 for the period from 1st April 1971 to 7th February 1972 to the Queensland Insurance Company Provident Fund Association (Pakistan).
45. Under this demand the Union demanded that the Company should pay interest from 1st of April 1971 to 7th of February 1972 on Provident Fund. The Company was willing to pay at 4 % and the learned Court allowed interest at the rate of 10% per annum, which according to the learned Court is Bank rate. Considering the fact that if the money was put in any Bank at fixed deposit it can fetch an interest of 10% per annum. Moreover the Company had put the amount of Provident Fund in Savings Bank Account fixed deposit and earned interest of more, than 10 %. I would, therefore, maintain this demand.
46. Demand No. 9(b) As compensation for the loss of Bonus Voucher benefits on the Provident Fund Amount Australia Dollars 58,577.12 held out--side Pakistan, the Company shall pay Rs. 2,91,685.89 to the Queens--land Insurance Company Provident Fund Association (Pakistan).
47. This demand related to Bonus Voucher for the provident amount kept in Australia. It was, -no doubt, mere good use of their money but the Provident Fund of every one of the Company doubled it-self. The learned Court was not quite fair in accepting this demand of the Union. The Award in respect of Demand No. 9(b) is set aside.
48. Demand No. 9(c). The Company should obtain income-tax exemption on the Provident Fund Amount so far held outside Pakistan and the amounts mentioned in Demands Nos. (a) & (b) above. Or the amounts as mentioned in (c) above should be paid to the beneficiary members.
49. Under this demand the Union wanted exemption of income-tax over the Provident Fund. This has already been granted by the Income-tax Authori--ties. The Award in respect of Demand No. 9(c) has, therefore, become infructuous.
50. Demand No. 9(d). The amount of Queensland Insurance Company Provident Fund Association (Australia) in respect of East Pakistan, staff lying with the Company at Karachi should be transferred to the Income and Expenditure Account of Queensland Insurance Company Provi-- dent Fund Association (Pakistan)."
51. This demand is in respect of Fast Pakistan Employees Provident Fund. The prayer is that it should not be: transferred to East Pakistan and should be utilised in West Pakistan for the benefits of the employees in West Pakistan, The demand of the Union is unfair. The East Pakistani, employees who are admittedly few in number; should not be deprived of their share of the Provident Fund. The Award in respect of this demand is set aside.
12. In the result, for the reasons already given, the Award in respect of Demand No. I is set aside and I would order that Gratuity should be paid after deducting the amount 'misappropriated or embezaeled by any of the members of the Union. The Award on Demands Nos. 2, 3, 4 and 5 are set aside. The Award as regards Demands Nos. 6, 7, 8 and 9 (a) are main--tained. The Award on Demand No. 9 (b) is set aside while Award on Demand No. 9 (c) has become infructuous as admittedly the exemption has been granted by the Income-tax Authorities. The ward as regards Demand No. 9 is set aside.