AWARD The Federal Government in exercise of the powers conferred by clause (c) of subsection (8) of section 22-A of the I. R. O., 1969, vide Notification No. S. R. 0.-1/74, dated 25th March, 1975 referred an Industrial Dispute between Cofcot Textile Mazdoor Union, Hyderabad and Management of Cofcot Textile Mills, Hyderabad for adjudication and determination as set out in the table given in the Notification which is reproduced below:-- All Amjad and Dr. Eizaz Nazir for the Union. Ghulam Hussain for the Management. Table "Payment of 5 months' wages as Bonus to the workers".
Immediately on receipt of this reference from the Federal Government, I directed the parties to appear at Karachi on 5th April, 1975. Od that date it was brought to my notice that the General Secretary of the Union namely Khushi Muhammad was in the lock-up in connection with some case. It was also pointed out by the applicants that the police had locked the office of the Union and as such they had no access to the papers lying therein. I accordingly directed the Deputy Commissioner, Hyderabad to arrange to get Khushi Muhammad produced before the Commission on 11th April 1975 at Circuit House, Hyderabad. I also directed the Deputy Commissioner, Hyderabad to allow Muhammad All Shah, President of tue Union to have access to his office to collect certain papers which he required for production before the Commission.
2. The learned counsel for the Management, however, pointed out that there was a lacuna in the reference made by the Federal Government as the year, for which 5 months' bonus has been claimed by the Union, has not been specifically mentioned in the Notification. I, however, repelled the contention for the reason that it was a matter of common knowledge that the bonus was being claimed for the year, 1973-74. N 3.
On 11th April 1975, 1 issued an order directing the workers to discontinue the strike from 12th April 1975 which was accordingly called off on that date. Mr. Bashir Ahmed, Joint Secretary of the Union stated that the number of workers employed in the Cofcot Textile Mills is 1,300 and that these workers were members of the two Unions. Of these Cofcot Textile Mazdoor Union is the CBA. He stated that the Union had submitted a Charter of Demands on the Management whereby five months wages as bonus were demanded. He, further stated that he had received the baiance- sbeet for the year ending 30th September 1974, only last night and as the time was short he could not examine it. He stated that the Managment have been clamouring for the last four years that they are suffering losses. He also pointed that the Management paid bonus equal to 95 days' wages to the workers for the year 1972-73 and 68 days' wages for the year 1971-72 and 2 months* wages were paid as bonus for the year 1970-71. He deposed that 12,500 spindles work daily in the Mills as a result of which average production per month comes to between 22,000 to 23,000 lbs.
The stock has not been piled up and the entire yarn has been sold out. Mr. Bashir Ahmad admitted that in the year 1973, the Management had made an application to Labour Court for closure of the Mills on the following grounds :-- (1) Chaotic conditions prevailing in the Mills. (2) Non-cooperation by the workers. (3) Go-slow.
4. He also admitted that a memorandum of settlement was signed between the Union ard the Management on 12th March, 1973 as a result of which the application for closure of the Mill was withdrawn by the Management. Mr. Bashir stated that he being an outsider had no knowledge qua the production. As far as he could recollect he had asked the Management to supply a copy of the balance-sheet for the year 1972-73. He also pointed out that the Union to which he belongs is CBA since 1970 and that referenda have always been held after every 2 years to determine CBA.
5. The learned counsel for the Union, however, raised an objection that the office-bearers of >he Union have not been afforded the opportunity to have an access to the record despite the order of the Commission and as such they were not in a position to pursue their case. I, therefore, directed the Additional Director, Labour Welfare, Hyderabad to accompany them to make necessary arrangements where by they may be able to peruse the record said to be lying in the office of the Union which has been sealed.
6. Mr. Z. M. Ibrahim, Chief Accountant, Cofcot Textile Mills, Hyderabad deposed that he has been working as Chief Accountant in the Mills for the last 13 years. He stated that the Mill was installed in 1952 and that the authorised capital of the Mill is Rs. 1,25,00,000 while Paid-Up Issue and Subscribed Capital is Rs. 1,20,00.000. According to Mr. Ibrahim the Special Reserve amounts to Rs. 75,49,421 and the General Reserve is Rs. 36,00,000. He stated that due to losses the amounts of General Reserve and Special Reserve have been consumed and that apart from this Rs. 35,00,000 have been consumed out of the Capital. He also stated that the Mills was indebted to the Habib Bank, Hyderabad and Karachi to the tune of Rs.
1,72,00,000 and that the Banks have been issuing notices asking them to repay the loan. He stated that the Mills has been suffering losses since 1971. According to the audited balance-sheet produced by Mr. Ibrahim the Mills suffered a loss of Rs. 53,35,896 for the year 1973*74. Mr. Ibrahim produced copies of the settlement arrived at betveen the Management and the Union on 27th February 1971; 21st March 1972 and 3rd August 1974 and also a production chart showing no increase in production. Mr Ibrahim also pointed out that the financial position of the Mills has deteriorated and as such the Management was not in a position to pay any bonus to the workers.
He further deposed that in spite of suffering losses since 1970-71 they have been paying bonus to the workers by consuming the General and Special Reserves. As such they were not in a position to pay bonus this year. Mr. Ibrahim, however, admitted that only one application was made to the Labour Court for closure of Mills and that the fixed assets have not been disposed of for the reason that the Management got loan from the Bank. Mr. Ibrahim admitted that inspite of losses they have been paying bonus to the workers in the past as under:-- 1970- 71 ... ... ... ... 60 days* wages 1971- 72 ... ... ... ... 68 days* wages 1972- 73 ... ... ... ... 95 days* wages 7. He also stated that production has not increased during 1973-74 which was round about 79,00,000 lbs. He added that the Union have demanded bonus equal to 5 months* wages but they have not demanded profit bonus. Stand taken by respondent is as under: - (1) The payment of bonus equal to 5 months* wages raised by the Union does not relate to profit bonus. (2) The demand of 5 months' bonus can be enforced as a matter of right guaranteed to the Union under Clause 4 of Standing Order 10-C of West Pakistan (Standing Orders) Ordinance, 1968. The demand does not constitute an industrial dispute. (3) The reference by the Federal Government to the Commission for adjudication as a dispute of national importance under section 22-A(8)(c) is illegal as the said dispute does not come within the definition of the industrial dispute as defined under section 2{xIii) of the Industrial Relations Ordinance, 1969. (4) The workers are not entitled to bonus by way of usage or customary bonus. 8, Since it is a common ground between the parties that the demand of -nion does not relate to profit bonus, I will confine my findings on the other objections raised by the respondent. In my opinion the contentions of the Management are untenable for various considerations. Clauses 1-2 of Standing Orders 10-C of West Pakistan (Standing Orders) Ordinance, 1968 lay down the amount of bonus payable to workers by the employer in case a profit is made by the employer. Clause 3 lays down the proportion that the bonus would bear in relation to the monthly wages of workers. Clause 4 reads as under :-- "Nothing in this section shall be deemed to affect the right of any workman to receive any bonus other than that payable under clause I to which he may be entitled in accordance with terms of his employment or usage or a settlement or an award of a Labour Court established under the IRO."
9. A careful perusal of Standing Orders 10-C would reveal that this Standing Order relates to profit bonus and that clause 4 of the said Standing Order does not create any right on the part of the workers to seek bouns other than profit bonus. Tne words *'to which he may be entitled in accordance with the terms of his employment or a usage or a settlement or award of a Labour Court" make it clear that this Standing Order creates a right in favour of workers only to the extent of receiving profit bonus in addition to receiving any bonus which he may be entitled to receive in accordance with the terms of his employment, or a usage or a settlement or Award of a Labour Court establisaed under the Industrial Relations Ordinance, 1969. The only test for deciding this issue would be as to whether the Union can invoke the provisions of section 34 of the said Ordinance and get the right of receiving bonus by way of usage adjudicated by a Labour Court. Section 34 reads as under:-- "Any Collective Bargaining Agent or any employer may apply to the Labour Court for the enforcement of any right guaranteed or secured to it or him by or under any law or any settlement or award of the Court."
10. Receiving bonus by way of usage is not a pre- determined right guaranteed or secured to a worker. The right to receive as amount of bonus has to be first determined and then provisions of section 34 can be successfully invoked to enforce the right so secured. Section 34 does not determine or adjudicate upon the rights of the parries. This section merely provides for enforcement of pre-existing rights and not determination or adjudication of rights between the parties. In tnis view I am supported by judgment of Sind & Baluchistan High Court reported in 1974 P L CB 194. I, therefore, do not agree with the contention of the respondent and hold that the demand of bonus by way of usage is an industrial dispute as defined under section 2{xiii) of ihe Industrial Relations Ordinance, 1969 and as such the reference of the said dispute for adjudication to the Commission is valid under law.
11. I may add that the respondent has taken two contradictory stands viz, (*) that the demand of bonus by way of usage being covered under Standing Order 10-C (4) of the West Pakistan (Standing Orders) Ordinance, 1968 does not constitute an industrial dispute as defined under section 2{xiii) of the Industrial Relations Ordinance, 1969 and that consequently the reference by the Federal Government of the dispute to the Commission under section 22-A (8) (c) is illegal ; (ii) that the workers are not entitled to receive bonus by way of usage as all the conditions precedent entitling the workers to receive bonus by way of usage are not made out.
12. The first contention renders the workers entitled to receive bonus by way cf usage and the second enables the Commission to adjudicate upon the demand as an industrial dispute.
13. In support of their contention that the workers are not entitled to bonus by way of usage, the respondent has placed reliance on a Supreme Court of India ruling reported in AIR 1959 SC 1147, wherein it has been observed that while determining the issue of customary bonus, the following points must be considered :-- (1) The payment of bonus has been made over for an un-broken series of the years. (2) It has been made for a sufficiently long period.
(3) Payment of bonus was not made in the years of profit. (4) Payment must have been made at a uniform rate. 14. ln the instant case it has been pointed out that the conditions set out in the principle laid down for determining the customary bonus have not been fulfilled and as such the payment of bonus in case of loss cannot be held as an implied term of conditions of service.
Commenting upon this ruling, a Full Bench of Supreme Court of lndia in another case reported in 1962 PLC l48y made the following observations:-- "ln our opinion, this contention is not acceptable for several reasons. Firstly, the four so-ealled conditions are not really in the nature of conditions precedent but are circumstances which have been taken into account by this Court in The Grahams Trading Co. (India) Ltd. v. Thtir Workmen, for coming to a conclusion as to whether or not a claim to customary or traditional bonus had been made out. In the case just referred to, this Court pointed out that the I ribunal has to consider those four ciicumstances. That those are circumstances, and not conditions precedent, is shown by the fact that this Court has pointed out that the length of the period will depend upon the circumstances of each case."
15. In view of the above, I therefore, have no hesitation to hold thati the respondent who has been paying 95 days', 68 days' and 2 months' wages'c as bonus to the workers in the years of losses is liable to pay bonus to the) workers for the year 1973-74.
16. Keeping in view the fact that bonus was not paid at a uniform rate and that the respondent is facing financial difficulties, I am of the opinion that ends of justice would meet if bonus equivalent to one and a quarter months' (1 { months) wages which after excluding Sundays is equal to 33 days'i wages to which the workers were entitled un 30th September 1974 is paid to /> the workers at pro rata basis in the same manner as was paid in tne years! 1970-71 and 1971-72 and l award accordingly and direct the respondent to pay bonus by 15th May, 1975 at the latest. The daily-rated workers would leceive the b>nus at the rate of their daily wages while one day's wages of the monthly-rated workers would be calculated by dividing their monthly wages on 26 days. The basic wages shall not include Cost of Living Allowance.
17. Finally I would like to observe that if the workers in future contri-j bute towards losses by adopting go-slow or remaining on illegal strike, theyU would be disentitled from receiving any bonus. |