DECISION This is an appeal against an award of the learned Presiding Officer of Sind Labour Court No. V, Karachi, dated April 18, 1973, whereby the learned Labour Court accepted 10 out of I6 demands raised by Kaikobad Pastanjee Kakalia Envelope Factory Employees* Union (hereinafter called the respondent Union). The facts giving rise to the appeal are these.
2. Messrs Kaikobad Pastanjee Kakalia (Envelope Factory) (hereinafter called the appellant), is a firm carrying on business of manufacturing envelopes and was established in 1941. The respondent-Union submitted a Charter of Demands on 5th June 1972. A strike-notice was served on the appellant Company on 16th June 1972. Conciliation proceedings were initiated by the Conciliator and a memorandum of settlement was arrived at on 9th July 1972, which was signed by the office- bearers of the Union and the Management.
3. After a lapse of three and a half months the Union submitted a fresh Charter of Demands on 20th October 1972. This was followed by a strike- notice on 30th of November 1972. The Conciliator issued a Failure Certificate on 16th December 1972. The Union made an application before the Labour Court under section 32 (1-A) of the Industrial Relations Ordinance, 1969 (hereinafter called the Ordinance), on 19th December 1972, through its General Secretary, Mr. Abdul Hameed.
4. Mr. R. F. Virjee, the learned Advocate for the appellant, very strenuously contended that during the period of the operation of the settlement dated 9th July 1972, the Union was stopped from raising fresh demands. In this connection, he made a reference to section 40 of the Ordinance, which lays down that if no period is provided in the settlement it shall be operative for a period of one year and until after 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 settlement. The first question that requires consideration is as to whether the settlement dated 9th July 1972, is a settlement within the meaning of the definition of section 2 (xxiv) of the Ordinance.
Under section 2 (xxiv) of the Ordinance settlement means, "a settlement arrived at in the course of conciliation proceeding, and includes an agreement between an employer and his workmen arrived at otherwise than in the course of any conciliation proceeding, where such agreement is in writing, has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the Provincial Government, the conciliator and such other person as may be prescribed."
5. Mr. Obaid-ur-rehman, the learned Advocate for the respondent Union, contended that the alleged settlement of 9th July 1972, was not a settlement within the meaning of the definition, reproduced above. The settlement is on the record of the Labour Court. It is contended that a perusal of the settlement would disclose that it was not arrived at during the course of conciliation proceedings. Moreover, there is nothing on the record to suggest that a copy of the settlement was sent to the Conciliator. Mr. Virjee, the learned Advocate for the appellant- company, relied on the statement of Mr. Hoshang R. Kakalia, Proprietor of the appellant-company, who stated as under: "I had sent the copy of the settlement, dated 9th July 1972 to the Conciliator, Ali Rizvi as per receipt dated 9-12-72, when conciliation proceedings were going on.................................... "
6. I am of the view that the above statement of Mr. Kakalia will not serve the requirement of the provision of the Ordinance. In fact, it appears to me that the copy of the settlement dated 9th July 1972, was not sent to the Conciliator in July 1972 or soon thereafter, but when the second Charter of Demands was made in October 1972 and conciliation had started in respect thereof before the Conciliator. The Management had sent a copy of the settlement to show that the second Charter of Demands was not warranted in law, as the demands had already been settled earlier. In this connection, reference may also be made to section 26 (2) of the Ordinance. It reads as under: "On receipt of the communication under subsection (1), the Works Council or the party receiving it shall try to settle the dispute within ten days of the receipt of the communication by bilateral negotiations, and, if the parties reach a settlement, a memorandum of settlement shall be recorded in writing and signed by bo+h the parties and a copy thereof shall be forwarded to the Conciliator and the authorities mentioned in clause (xxiv) of section 2."
7. Section 2 (xxiv) read with section 26 (2) of the Ordinance makes it imperative that a copy of the settlement, if arrived at during the conciliation proceedings, should have been sent to the Conciliator. Such a requirement of law is based on public policy. The parties will not be able to contract out of the settlement on the ground that they had entered into it under ^ duress or force, if the same had been sent to the Conciliator. It may be that the Conciliator by way of abundant caution verify the contents of the settlement from the respondent Union I would hold that the so-called settlement dated 9th July 1972, is not a settlement within the meaning of the definition of section 2 {xxiv) of the Ordinance, so as to attract the provisions of sections 39 and 40 of the Ordinance,
8. An agreement reduced in writing and signed by the parties, though it may because of some formal defect not attract the provisions of sections 39 and 40 of the Ordinance, it will, if arrived at voluntarily between the parties can be looked into as a piece of evidence, while adjudicating the demands raised by the Union. All agreements reduced in writing are solemn piece of evidence and should not be lightly ignored, as sanctity is attached thereto.
9. The Union in its Statement of Claim stated as under in respect of the settlement dated 9th July 1972: "During negotiations the Management obtained signatures from illiterate workmen on papers on the pretext that their demands have been accepted. This paper was signed in July 1972. But later on it was found that signatures were obtained under misrepresentation on a document written in English containing such agreements which were never agreed upon. In fact under the said so-called agreement dated 9th July 1972, the respondent Management did not concede any demand whatsoever. However the Management failed to record it as a Settlement and as such the said so-called Agreement dated 9-7-1972, was neither binding nor effective on the parties."
10. On the other hand, it was stated by the Management that the terms of the settlement were discussed in Urdu and that Mr. Muhammad Aslam Awan and Mr. Abdul Hameed both knew English. They read the settlement and thereafter affixed their signatures thereto. The settlement of 9th July 1972, is on the record. It is signed by Mr. Muhammad Aslam Awan and Mr. Abdul Hameed in English. Mr. Muhammad Aslam Awan was admittedly the General Secretary of the Union in July 1972, while Mr. Abdul Hameed was only a member of the Union. He is now the General Secretary of the Union. Moreover, it is noteworthy that Mr. Kakalia, who has filed his affidavit in support of the written statement, has not been cross-examined in respect of his statement that Mr. Abdul Hameed and Mr. Muhammad Aslam Awan know English and they had read the contents of the agreement. If the settlement had been obtained through fraud on the part of the Management, the Union would not have kept quiet for a period of three and a half months.
They must have had a copy of the settlement. I would hold that the agreement dated 9th July 1972, was voluntarily entered into, after fully understanding the contents thereof between the Union and the Management. It can be taken into consideration as any piece of documentary evidence.
11. In the next place, Mr. Virjee contended that the strike-notice was given after a period of 40 days, much beyond the period mentioned under section 26 (2) of the Ordinance. He contended that the strike-notice, therefore, was bad in law and, therefore, the conciliation proceedings and the application under section 32 (1-A) of the Ordinance was not maintainable. There is no force in the contention. In the first place, there is no positive evidence to show that the period of 10 days during which through bilateral negotiations, settlement could be reached, was not extended. The period for negotiations could be extended by consent of the parties. In the second place, there is nothing in section 26 of the Ordinance to indicate that if the notice of strike has been given after the period of 10 days, it will be bad in law. The objection of Mr. Virjee, the learned Representative for the appellant, is overruled. 13. l2. I will now proceed to consider the objection of Mr. Virjee in respect of the various demands'allowed by the learned Labour Court. It may be mentioned at the very outset that the learned Labour Court granted 10 of the demands out of I6 demands on the following grounds; "The other point to be considered is whether there is total bar from raising any further demands during the pendency of the agreement. There are as many as I6 demands listed in the charter dated 20-10-1972 out of which some demands were discussed previously, while others were dropped, as such they can certainly call for the implementation according to the Labour Laws as they are the rights secured under amended provisions of Standing Orders, 1968. They are as under:" It follows from the above reasoning of the learned Labour Court that it has granted the 10 demands on the ground that they are provided under the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (hereinafter called the Standing Orders Ordinance).
14. The learned Labour Court granted bonus on the following ground: "This demand was dropped previously. The respondents have not led evidence that the Co. has not earned profits and therefore the Statutory Bonus is payable. Similarly the Gratuity is also their secured right, which be paid to them."
15. The Jearned Labour Court has not given any other reason for granting bonus and gratuity than what is reproduced above. Under the proviso to section 1 of the Standing Orders Ordinance, "the provisions of Standing Orders 10-B and 11, clauses (6) and (8) of Standing Order l2 and Standing Order 15 shall not apply, in the first instance, to any industrial establishment wherein not more than forty-nine persons were employed on any day during the preceding twelve months.......................................... " It follows that Standing Order 10-C, which relates to bonus would apply to the appellant establishment, though admittedly it employs not more than forty- nine persons. The provisions of clauses (6) and (8) relating to gratuity will not apply to the appellant establishment as it employs not more than forty- nine persons, Jn the {Statement of Claim filed by the Union, it did not claim that the Management was not paying bonus in accordance with Standing Order 10-C of the Standing Orders Ordinance. In fact the case of the respondent Union in the Statement of Claim was as under: "However, from 1954 till 1969 without any interruption and as a normal practice and custom the bonus was paid. But since January 1970 bonus has been withheld for the years 1970 and 1971. The respondent Management is making huge profits. It is extending and enlarging the factory but the workmen have been denied tlieir shares in the earnings. The demand is fully justified and may be awarded."
16. In respect of bonus it was further stated that it was an uninterrupted practice of the Management till 1969 to pay bonus each year in January, equal to one month's salary. On the other hand, the case of the Management is, as stated by Mr. Kakalia that after the separation of East Pakistan there has been shortage of paper supply and the Management was obliged to close some of the Enveloping Machines. Mr. Kakalia in cross- examination stated that they had in 1969, seven Enveloping Machines and four Printing Machines, but in 1970 only three Enveloping Machines were working and no Printing Machine. At present, he stated, that three to four Enveloping Machines and two to three Paper Slitting Machines are working. It is noteworthy that Mr. Kakalia did not disclose in his reply statement, which is part of his affidavit, that they suffered loss in 1970 and 1971. All that is stated in the reply statement is as under: "November and December, 1971 were the years that India waged War against Pakistan and during this period there was hardly any business. That for the above reasons Bonus could not be paid for 1970 and 1971 as business was very slack."
17. It was very easy for the Management to contradict the statement of Union that the Management had made huge profits. All the balance- sheets and the relevant documents were in possession of the Management. It is not denied by the Management that they were not paying one month's salary as bonus for the years prior to 1970. I would hold that the workers are entitled to only one year's bonus, i.e. for 1971. If the Union had slept over its right, the Management should not be penalized for paying bonus for past years. The claim for bonus must be made immediately after it becomes due and the Management does not pay the same. The balance-sheets of a public concern or private concern are closed yearly. Whatever profit is made it is distributed or utilized as the need of the concern may require. It is easy for the workmen to raise the demand immediately on the failure of the Management to pay bonus. If a demand for bonus is not made immediately, it may be concluded that the workers were satisfied that no profit had been made for that particular year, so as to raise a claim for bonus I would, however, hold in the absence of any evidence on behalf of the Management, that they did not earn profit in 1970, so as to justify payment of one month's salary as bonus to the workers. I would, therefore, award one month's salary as bonus to the workers for 1971. While disposing of this demand, I must observe that the learned Labour Court must apply his mind to contentions raised by the parties and not pass an order according to his own conjecture and surmise.
18. So far as the question of gratuity is concerned, it is conceded by Mr. Obaidurrehman that the provision relating to gratuity dees not apply to the appellant concern, as they do not employ more than forty-nine persons. Moreover, in the statement of claim no claim for gratuity had been made. The learned Labour Court should not have awarded gratuity ia the absence of any claim for the same by the Union. Mr. Obaidurrehmau however, relied on the settlement arrived at between the parties on 9th July 1972 and contended that the Union be allowed gratuity. There is no force in this contention in the absence of any claim in the statement of claim filed by the Union. There is no justification to consider this submission. I would hold that the Union is not entitled to any gratuity. Demand No. 2.-- The two employees Muhammad Ismail and Rashid who have completed their probation period should be made Permanent.
19. It was the case of the Management that these two persons were not in the employment of the Company, but were the workers of the Contractor, Abdul Qudus, and that they continue to be in his service. Mr. Abdul Hameed, General Secretary of the Union, admitted in cross-examination that Ismail and Rashid were formerly employees of the Contractor, Abdul Qudus. He, however, stated that now they are employees of the Company and get pay from the Company. In this connection, his statement is noteworthy. It reads as under: We sign on register when we get pay. We have Attendance Cards. The Company has not given cards to Ismail and Rashid. They obtain leave on applications. They do not get reply of leave applications. 20. The above statement makes it quite clear that Ismail and Rashid are not in the employment of the Company. The demand of the Union in respect of these two persons is, therefore, rejected. Demand No. 3.--Minimum wages of unskilled worker be fixed at Rs. 140 per month according to Minimum Wages Ordinance.
21. Mr. Obaid- urrehman, the learned Representative for the respondent Union, candidly admitted that the Minimum Wages Ordinance does not apply to the appellant concern. I would hold that the respondent Union is not entitled to the above demand. Demand No. 4.--The Annual Increment at Rs. 20 % be allowed to every worker.
22. On the face of it, such an award is fantastic. However big ai concern may be if the workers are allowed 20% Annual Increment in their] E salary, the concern cannot bear such a burden. The demand is, therefore,! rejected. Demand No. 5.--No outside worker be imported in case of over-work, but the overtime work from the permanent workman be taken at double rate.
23. Under the Factories Act of 1934, the workers cannot be made to work for more than 48 hours in a week. If the Management were to take work from the workers for more than 48 hours, it will be a contravention of the Factories Act and the Management will be liable to prosecution. This demand, therefore, cannot be granted. Demands Nos. 6 and 7.-- Provident fund Scheme and Social Security Scheme are the basic rights of the workers which be introduced.
24. Social Security Scheme is not applicable to appellant concern. This demand is rejected. So far as the Provident Fund Scheme is concerned, there is no such scheme. If under Standing Order l2 (5) of the Standing Orders Ordinance, the Management has not established a Provident Fund to which such workman is a contributor, and the contribution of the employer to such Fund is not less than the contribution made by the workman, the employer in case of termination of service of a workman for reasons other than misconduct, will have to pay gratuity equivalent to 15 day's wages for every completed year of service. It is, therefore, not necessary to make any order for Provident Fund. Demand No. 8.--Every worker be provided 2 Uniforms during the year.
25. No case for providing uniforms had been made out by the Union for all the workers. It has not been established that their work is such thatl^ their ordinary clothes get soiled. * Demand No. 9. --The Management should provide laterines in the factory premises.
26. It is stated by Mr. Kakalia that there are already two laterines in the factory premises. The question of providing any more laterines does not arise. The demand is rejected. Demand No. 10.--The Management should also increase Bus fare by 5%.
27. In the statement of the General Secretary, Mr. Abdul Hameed, no case for payment of Conveyance Allowance is made out. There is nothing in the statement of claim to justify any payment of Conveyance Allowance. It is not stated by the General Secretary that the workers have to come from far off places to the factory. In these circumstances, they are not entitled to any Conveyance Allowance.
28. In the result, the workmen are entitled to one month's salary as bonus for the year 1971. The award of the learned Labour Court in respect of other demands is set aside. k