DECISION This is an appeal against the award given by the learned Presiding Officer of Labour Court No. I on the 22nd of June 1974, in an application under section 32(1-A) of the Industrial Relations Ordinance, 1969 (hereinafter called the 'Ordinance'). The facts giving rise to the appeal briefly put are these. The appellant is a Textile Mills, carries on the business of spinning, and does not manufacture textile goods. The respondeat is the 'Collective Bargaining Agent' of the workers employed by the appellant Mills.
2. Prior to 1968, the appellant owned two units, known as Crescent Textile Mills No. 1 and Crescent Textile Mills No. 2. Crescent Textile Mills No. 1 ceased to operate from the year 1968 and Appellants Crescent Textile Mills No. 2 continues to operate. In the years preceding the year in dispute (1972-73), the workers of the appellant were represented by various Trade Unions. The present Union of the respondent was formed some time in the end of 1969 and they elected Mr. Muhammad Hilal as General Secretary.
3. The respondent-Union had raised 17 demands. Of these demands, Demands Nos. 7, 11 and 13 were partly allowed and the rest were allowed as prayed for.
4. The learned Labour Court granted the demands having come to the conclusion that the Company is worth many lacs of rupees. Mr. M. A. Khan has challenged the reasoning of the learned Labour Court. I have gone through the reasoning of the learned Court at page 4 of the award. I failed to appreciate the same. Mr. Qureshi, the learned Representative for the Union made no serious attempt to explain the reasoning of the learned Labour Court.
5. I propose to dispose of Demands Nos. 1 and 5 together as they both relate to wages. The appellant-company has Daily Wages, Piece-rated and Monthly Wages workers.
6. The learned Court has relied upon the instances of comparable concerns. The first question is whether they can be said to be comparable concerns. 1 have come to the conclusion for the reasons which I would presently mention that these cannot be said to be comparable concerns. Of these five concerns four concerns namely (1) Abdul Ghani Textile Mills, (2) Nishat Textile Mills, (3) Jaffer Ebrahim ancC(4) J & P Coats, cannot be said to be comparable concerns at all. They are not doing the same business as thej appellant-company namely, spinning. These mills also manufacture clothp and they are also very much larger in size. Only New Era Textile Mills which can be said to be comparable concern as it is almost equal in size and doing the same business as that of the appellant- company namely Spinning only but this one also cannot be said to be a comparable concern for the purposes of increase in wages for two reasons, (a) the working condition in this mill was all along very peaceful and (b) it has always been earning profits. In the final analysis none of the concerns relied upon by the learned Labour Court as 'comparable concerns', could be said to be 'comparable concern*. Moreover the appellant-company has as many as 67 categories of daily- rated workers. These so-called 'comparable concerns' have not given the details of the daily-rated workers. In the absence of similar categories in the comparable concerns it is not possible to judge if the appellant-company is paying more or less.
7. The settlement dated lst of January 1972 would disclose as under :-- "This settlement has been arrived at in order to maintain goodwill and better results in efficiently running of the mill although the mill was not in financial position to bear the so heavy financial commitments as made hereinunder." The settlement was binding on the parties up to 31st of December 1972, and the Union had agreed not to raise any demand of financial implications during the operative period of the settlement.
8. The next settlement to which a reference in this connection can be made is dated 13th of September 1972. Under that Settlement the Company had agreed to pay 2|% participation payment although in 1971-72 it had suffered losses. That this was so is clear from the fact that it made ex gratia payment towards participation up to 30th September 1971 to 20th of September 1972. This follows from the final term of the settlement which runs as under :-- "The 2\% Companies Participation Fund as declared in the accounts of Management for the years ending 30-9-1969 is actually Rs. 7,790 including interest.
The Management has, however, agreed to make ex gratia payment on account of workers participation up to 30-9-1971 to the workers on roll on 20-9-1972." Had the Company earned profit the question of ex gratia payment could not have arisen. In this connection a reference may also be made to the certificate given by the Chartered Accountants. It is at page 1531 of the record of the Labour Court in file No. 3. This certificate was filed by Mr. Khalid Umer. The relevant portion reads as under :-- "We have gone through the final accounts of M/s. Sultan Textile Mills (Karachi) Limited, Karachi for the years ended 30-9-1970, 30-9-1971, 30-9-1972 and 30-9-1973, and after giving our most careful consideration we have come to the conclusion that the financial position of the Company has remained weak although on account of heavy losses suferred by the Company in previous years. The results of the past four years may be stated as under :-- Rs. 2.31.919.45 2.12.997.45 3,82,222.82 4,50,475.65 Carry forward of previous losses Loss sufferred during 1969-70 Loss sufferred during 1970-71 Loss sufferred during 1971-72 12,77,615.37." The concluding portion of the certificate read as under :-- "With sizeable profits during the year 1972-73 the Company has still not been able to wipe up its previous losses totally. Even the paltry General Reserve of Rs. 1,00,000 has been liquidated." The only cross-examination of Mr. Khalid Umer in respect of certificate would disclose that it is directed as regards its admissibility. This is, however, not very material. In the first place Rule of Evidence is strictly not applicable to the Labour Courts. In the second place admittedly the balance-sheets for every year used to be supplied to the Union and, therefore, it cannot be said that the contents of the certificate were not in the knowledge of the Union.
9. In fixing the Wage Structure, Increment etc., Industrial adjudication has to take a long range view and it has to determine and examine very carefully the impact on the Wage Structure of the financial position of the establishment. Where there is indication that the business is on the decline and the conditions in which the factory was dealing were not likely to improve soon, the Court has to be very cautious in increasing the liability of the , Company simply because some concerns which cannot be said to be comparable concerns as they are much bigger in size and one concern though of same size but where, as I have already mentioned, working conditions were peaceful as the Union was very co-operative and the Company made profits is no ground for increasing the Wage structure so as to burden the appellant-company.
10. Mr. Shafiq Qureshi, the learned Representative for the respondent- Union submitted that one is not concerned with what happened in the past. The appellant-company admittedly made profit of over Rs. 9,00,000 in 1972-
73. What has to be seen, however, is as to whether the Company will keep on making this profit in future. Mr. M. A. Khan, the learned Representative of the appellant, doubted that the Company would continue a profit of rupees nine lacs in future also. He submitted that the Company made this substantial profit in 1972-73 because of two factors namely (1) that thec Company had stored stock purchased at lower cost and which was sold in 1972-73 and (2) that the world market was very favourable in 1972-73 There is no reason to take a different view than what has been submitted by the appellant-company. I can take judicial notice of the present cotton! crisis in the country. One does not know what will be the market price# of cotton. The learned Court was not correct in awarding all the demands! on the ground that the financial position of the Company was excellent and, therefore, can afford to meet the demands granted by the Court. Demand No 2.--11. I have in several cases accepted the demand of Conveyance Allowance relying on the observation of Mr. Khurshid Zaman, Chairman, Central Industrial Court in Employees* Union v. Pakistan Battery Manufacturing Company, Karachi, 1962 PLC 869 at page 880. The observation runs as under :-- "It is also an established practice in most of the industrial establishments that some conveyance allowance is paid to those workers who live at a distance of more than 3 miles from the place of their work. This is because most of the workers have to come to their place of work from distant localities and have to pay transport fare, which may range from Re. 0-4-0 to Re. 0-8-0 per trip, out of their wages. This is a pretty big slice out of a poor man's wages." The position today appears to me that the fare charges are not the same which were in 1962. They have been at least doubled. I would, therefore, increase it to paisas fifty per day from paisas twenty-five. The appellant- company will have no difficulty in calculating the distance beyond three miles as the addresses of all the workmen should be with it. Demand No. 3.--"The Company shall pay Rs. 15 as Attendance Allowance fortnightly to all the workers". l2. The demand, on the face of it, appears to me unreasonable. The workers had to be regular in attendance except for holiday allowed under the Factories Act. Moreover, Attendance Allowance of Rs. 15 per fortnight (two weeks) is not reasonable, I have, however, considered this demand sympathetically for the Labour and I consider that it will serve the Management also if the workers are regular in attendance and do not absent themselves without leave. They should be paid Rs. 15 for attendance of 26 days in a month. They would be entitled, however, to three days 'authorised absence' in a month with permission. I may observe here that the learned Court under Demand No. 3 has cited the example of New Era Textile Mills who give Attendance Allowance at the rate of Rs. 15 per month and yet has accepted the demand as prayed for. It should have granted the demand for per month and not for two weeks as it would work out to be Rs. 30 per month. F Demand No. 4.--13. It was stated at the bar by Mr. M. A. Khan that after his appeal against Interim Award was allowed and the case remanded the appellants have paid bonus for 26 days* wages as bonus to the workers on one month's wages to monthly-rated workers under Standing Order 10-C of the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. As Standing Order 10-C stands today the workers aie not entitled to get more than one month's wages. The workers cannot claim ninety days* wages as claimed by them under Standing Order 10-C of the Industrial and Commercial Employment (Standing Orders)
Ordinance, 1968. The award as for bonus is, therefore, set aside as the same cannot be granted under Standing Order 10-C. Demand No. 6.--14. This demand relates to Annual Leave of 25 days per year in respect of Sick Leave 15 days every year, Casual Leave 15 days every year. Every worker under the Factories Act is entitled to Annual Leave, Sick Leave and Casual Leave. The workers cannot claim more than what has been prescribed under the Factories Act. The Legislature has fixed certain amount of leave after considering all the relevant circumstances. The 1975 175award, as for Annual Leave, -Sick Leave and Casual Leave, is set aside and the workers would get leaves as prescribed under the Factories Act. Demand No. 7.--15. Demand No. 7 relates to Uniforms. The learned Labour Court has allowed one Woollen Uniform every year to the Watchmen and Rs. 5 per month as Washing Allowance. On the other hand the company admittedly, was, as would appear from the Statement of Claim, supplying old over-coats and two pairs of Summer Uniforms. The learned Court granted one woollen uniform every year. One woollen uniform every year is not reasonable. Woollen goods last from two to three years. I would consider it reasonable to allow one woollen uniform (long coat) to Chowkidars after every two years and allow the Summer Uniforms that they are getting and Rs. 5 per month as Washing Allowance. Peons and Drivers do not require Woollen uniforms. They require only Summer uniforms. They will continue to get what they are getting and Rs. 5 per month as Washing Allowance. Demand No. 8.--16. Demand No. 8 relates to Provident Fund. The learned Court had been influenced in granting Provident Fund by the Policy of the Government. In Government Departments it is true Provident Fund has been provided but the case of workmen is governed by the Standing Orders Ordinance. In this connection a reference may be made to the Standing Order l2, as Gratuity is payable by the appellant-Com- H pany, Provident Fund should not have been allowed. I would, therefore, set aside the award as to Provident Fund. Demand No. 9.--17. Demand No. 9 relates to supply of certain yards of cloth free of charge as a gesture of goodwill. The learned Court has granted the same. The demand should not have been accepted as the Company is not a cloth manufacturing Company. It is only a spinning Company. The award, therefore, as to the supply of certain yards of cloth free of charge as a gesture of woodwill is set aside. Demand No. 10.--18. Demand No. 10 relates to Canteen. The demand is for running the Canteen by the Company itself and supplying the food at the rates suggested by the Union. The learned Court has accepted the demand. Under the West Pakistan Factories Canteen Rules, 1959, the occupier of every factory in which more than 250 persons are ordinarily employed has to provide a canteen according to the standard prescribed in the said Rules. The learned Court should not have fixed prices of the food and drinks itself. It should have left'it to the Managing Committee to be formed under the said Rules. I would order the appellant- company to run the canteen with the help of a Managing Committee. The Managing Committee would fix the rates of the articles to be supplied by the canteen. Demand No. 11.--19. Demand No. 11 relates to appointment and removal. The learned Court has refused the appointment and preference to the relatives of the workers. The demand is in two parts, one is about appointments and the other is about pay on appointment to the new enterants. The leamed Court has granted the same pay to the new entrants which is payable to permanent workers. This should not have been done. It is not reasonable to give the same pay to a probationer who will get this pay as on being confirmed. The award that tiie new entrants should get the same pay as the permanent ones is set aside. Demand No. l2.--20. Demand No. l2 relates to coolers in every Department and Canteen. The demand is too general and should not have been granted and prayed for. I would modify the award as to demand No. l2 and limit it only to canteen. The Management would supply a cooler at the canteen. Demand No. 13.--21. Demand No. 13 relates to the appointment of fitters, assistant fitters, oil man in each shift. This is also in two parts. The one is for appointment only and the other is to provide two pairs of uniforms to Maintenance and Workshop Electrical Employees and to supply rubber shoes and rubber gloves to Electrical Department Workers. So far as demand for appointment is concerned this would depend upon the need of the factory whether they need extra hands or not. So far as the question of uniform is concerned it is reasonable to supply two pairs of Militia cloths, or any other cloth that the Management may choose, uniform to the persons working in the Maintenance, Workshop and Electrical Department and also to pay Rs. 5 per month as Washing Charges. The workers would be entitled to get one pair of rubber sole shoes every year which could be used while working in the Electrical Department of the Factory and would not be allowed to take home for private use. Demand No. 14.--22. It is for 20 seers of cardfly No. I to each worker every year. The learned Court has granted the demand of 20 seers. I think 15 seers of Cardfly No.-l every year would meet ends of justice. Demand No. 15.--23. Demand No. 15 relates to raising of loan fund tc Rs. 40,000. I would maintain the award on this demand. Demand No. I6.--24. Demand No. I6 runs as under:-- "The Company shall engage two jobbers in each shift in the Ring Department. The Company shall also increase the strength of Helpers and Piecers by one and six respectively in each shift." The learned Court should not have granted this demand as prayed for. It is for the Company itself to see as to whether they need these people or not. Demand No. 17.--25.
Demand No. 17 relates to wages for the strike period. The learned Court has granted full wages for the strike period, lt would, however, depend upon the circumstances of each case as to whether the wages for the strike period should or should not be granted.! There may be cases where on the facts it may be established that theu workers were justified in going on strike. In the present case! I do not think that the workers were justified to go on strike and resume work only when ordered by the Government. The past conduct of the Company did not entitle the workers to go on strike. In this connection reference may be made to the two settlements which show how ready and willing the appellants were to meet i the demands of the workers.
26. In the result, for the reasons given above, the award is partly set aside, partly confirmed and partly modified. The award will be effective from the date of Demand Notice, i,e., the lst of January 1974.