DECISION This is an application under section 50 of the Industrial Relations Ordinance, 1969, made by Shafiq Textile Mills Ltd. for the interpretation of para. 2 of the Settlement relating to bonus.
2. An Industrial Dispute was raised by the respondent-Union raising certain demands. A Settlement was reached between the parties on the 30th of May, 1974 and it was reduced to writing duly signed by both the parties. On 1he basis of this Settlement the Union demanded Bonus for the year 1973-74 ending 30th of September, 1974 by the letter dated 9th of November, 1974. The Management by a letter dated 18th of November, 1974 informed the Union that the question of payment of bonus was premature as the accounts had not been finalised. According to the Management the payment of bonus depended upon the profit. This claim was resisted by the Union by letter dated 28th November, 1974 and it was pleaded that what was being demanded was not profit bonus but it was the bonus as agreed in the Settlement. This claim was refuted by the Management by letter dated 9th of December, 1974 to the effect that the bonus was linked with the profit of the Company and until the Auditors were able to settle the position with regard to the profit the demand was premature. Subsequently the Union was informed by letter dated 30th of December, 1974 that on the basis of the figures available there was a loss of Rs. 43,03,014 and if the bonus demanded amounting to Rs. 4,97,276 was paid, the total loss would be Rs. 48,00,290 and in view of the loss the workers were not entitled to receive any bonus. Since the Union insisted for the payment of bonus the present reference was made.
3. The term of the Settlement giving rise to the present reference reads as under:-- "2. Bonus.--(1) The Company shall pay to its workmen bonus for and in respect of the Company's twq accounting years to and on 30th September, 1974, and on 30th September, 1975, at the rates and in the manner detailed hereunder:-- I {a) At the rate of 51 (fifty-one) days's basic wages to all daily-rated workers and at the rate of two calendar month's basic salary to all monthly paid workers, who will have completed twelve continuous month's service at the close of each of the above two respective accounting years ; workers having put in less than tweleve months service but service of three months or more continuously as on the 30th September of each of the above two respective accounting years will be paid bonus on pro-rata basis. In the case of winders, bonus on the above basis shall be calculated on the basis of their average daily earnings during the last three months of respective accounting years; OR (6) Bonus at the rate and in the manner laid down in the relevant provisions of the West Pakistan Industrial and Commercial Employment (Standing Ordinance), 1968 whichever of the above two is higher. (2) No bonus whatsoever shall be payable to any workman who has put in service for a period of less than ninety days as at the close of each of the above two respective accounting years of the Company."
4. The aforesaid para of the Settlement consist of two. clauses with a proviso. It is Clause (1) which has been sought to be interpreted. In order to appreciate the contention it is necessary to reproduce Standing Order 10-C of the West Pakistan Industrial & Commercial Employment (Standing Orders)
Ordinance, 1968, referred to in Clause 1(6). It reads as under:-- "10-C. Payment of bonus.--(1) Every employer making profit in any year shall pay for that year within three months of the closing of that year to the workmen who have been in his employment in that year for a continuous period of not less than ninety days a bonus in addition to the wages payable to such workmen. (2) The amount of the bonus payable shall-- (?) if the amount of the profit, is not less than the aggregate of one month's wages of the workmen employed, but not less than amount of such aggregate, subject to the maximum of thirty per cent of such profit; Illustration 1.--If the profit is Rs. 1,20,000 and the aggregate of one month's wages of the workmen is Rs. 30.000, the amount of bonus payable shall he not less than the aggregate of one month's wages, that is to say, Rs. 30,000. Illustration 2.--If the profit is Rs. 30,000 and the aggregate of one month's wages of the workmen is also Rs. 30,000, the amount of bonus payable shall be not less than thirty per cent of the profit that rs to say Rs. 9,000).
(?) If the amount of profit is less than the aggregate referred to in paragraph (a), be not less than fifteen per cent or such profit. (3) The bonus payable to a workman entitled thereto under clause
(1) shall bear to his monthly wages the same proportion as the total bonus payable by the employer bears to the aggregate of the wages referred to in paragraph (a) of clause (2) and shall be paid either in cash or in NIT Units of equivalent value at the option of such workman. (4) Nothing in this section shall be deemed to affect the right of any workmen to receive any bonus other than that payable under Clause (1) to which he may be entitled in accordance with the terms of his employment or any usage or any settlement or an award of a Labour Court established under the Industrial Relations Ordinance, 1969 (XXIlI of 1969)." On comparison of Clause I (a) of the Settlement and Standing Order 10-C, it is evident that there are marked distinctive features. In Clause I (a) there is no reference to the profit whereas in the Standing Order, bonus is linked with the profit.
Again in Clause I (a) fixed rate of bonus had been provided without any ratio to the profit whereas Standing Order lays down the ratio which the bonus should bear to the profit earned by the Company subject to the prescribed limits. Then a proviso had been provided in the Settlement, thereby placing the workmen in an advantageous position. They are entitled to claim bonus admissible under any of the clauses whichever is beneficial to them. In my view, workmen by virtue of clause I (a) of the Settlement are entitled to claim bonus at the rate shown therein irrespective of gain or loss.
5. The learned counsel for the company, however, laid emphasis on the term 'bonus' and argued that as bad been consistently held by the superior Courts, bonus could not be granted unless there was profit. Thus, he pointed out that although the term had not been defined in the Ordinance but it bad been judicially interpreted and universally adopted over a long period and, therefore, it must be assumed that the term was used in the Settlement in the sense in which it had been judicially interoreted. According to him, the parties were fully conscious of the meaning and the implication of the termwhen they entered into Settlement and it was clearly understood that the entitlement of bonus depended on the profit to be earned by the Company. This was also sought to be supported by Clause 1 (b) which referred to Standing Order 10-C treating the profit as a condition precedent to the entitlement of bonus and it was urged that since the document embodying the two clauses referred to the same term, it must be presumed that the meaning given to the term in one position carried the same meaning and implication when used in another position.
6. The concept of bonus, as indicated by precedents falls under different mutually exclusive categories viz (a) Production Bonus (6) Festival Bonus (c) Customary Bonus and (d) Profit Bonus. Of course the primary meaning of the term bonus was gift and it was regarded as an act of charity and a matter of bounty gratuitously made by the employers, but in modern times the concept has changed and bonus has been regarded as a term of employment which may be claimed by them as of right. It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained as well as to maintain industrial peace. Now it has been accorded legal sanction by the Legislature by enacting Standing Order 10- C.
7. Apart from this, Bonus can be specifically granted under the term of contract of service or Settlement as in the presant case. When such is the case, the intention of the parties is to be collected from the document itself unless it is not possible to discover the intention without the aid of extrinsic evidence or judicial precedents.
8. Indeed, there can be no dispute that as a rule, bonus as understood in industrial sense, comes out of the available surplus of profits and cannot be granted unless there is a profit but this does not prevent the parties to come to a Settlement whereby the bonus is allowed irrespective of loss or gain The rule laid down by the superior Courts cannot be invoked in the present case for the simple reason that the claim to bonus by the employees of the Company is based on the Settlement duly made. The Settlement is binding on the parties and has to be enforced irrespective of other considerations. Distinctively, this case is a departure from the general rule and stands on different footings. If the parties deviate from the generally recognized rule, it cannot be renounced. In fact it assumes permanency and becomes part of the wages. In this connection I would like to refer to the pertinent observation made in the case of Messrs M. Tilak & Co. v. Third Industrial Tribunal and others (1) which reads as under:-- "Bonus is a concept of many connotations. It may be the term of the contract of employment in which event the question if such bonus is payable out of profit only when the wages fall below living standards will depend on the terms of such contract of employment. It is within the range of economic and legal possibility that in a particular contract of employment it is stipulated that bonus will be paid irrespective of profits or living standards. It may be a cash incentive to a greater efficiency and production even wnen there is no question of absence of living wage. Akin to this conception of bonus is the case of a bonus annexed to the employment by custom or social practices such as Customary bonus and Puja or Festival bonus. In case of such customary and traditional bonus, the question of profit may or may not arise at all and such customary and traditional bonus will depend on the content and terms of that custom or the tradition on which the claim for bonus is made. Each claim for bonus must depend on the facts of such claim. No doctrinaire view about bonus is possible or desirable. This much, however, is judicially settled that bonus is not deferred wages. It is a narrow and static view that considers bonus as always ex gratia payment or a glorified tip or Bakshish or a mere cash patronage payable at the pleasure of the employer. In the industrial jurisprudence of modern economic society, it is a legal claim and a legal category, whose potentialities are not as yet fully conceived, but struggling to formulate. It is a vital instrument of industrial peace and progress, dynamic in its implication and operation.'* 9.
Reverting to the Settlement the notable feature is that there is nothing in clause 1(a) indicating that the bonus was linked with the profit. It is a rule of interpretation of a document that it is to be presumed that where the parties have set down some stipulation in their document, they have set down all they required. It is, therefore, not possible to presume a term which does not form part of the Settlement. In case the parties intended to link the bonus with the profit nothing would have been easier and more appropriate than to have specifically provided as such. The absence of any such stipulation coupled with the absence of any ratio of bonus to the profit amply demonstrate the intention contrary to what has been canvassed by the learned counsel for the Company. It may be noted that in an earlier Settlement bonus was allowed, though a lesser sum, and it has not been pleaded that this was linked with the profit. t 10. During the course of arguments, I asked the learned counsel for the Company to reconcile his contention on the assumption that the Company had earned profit but not sufficient to cover the entire claim of bonus as allowed under clause 1(a) although it be more than permissible under Standing Order 10-C. He replied that in that case Clause 1(a) would be ignored an4 the bonus would be available only under the Standing Order. It is not possible to accept such an explanation. Evidently it renders the proviso nugatory and ineffective. It will not only do violence to the plain language of the document but will deprive the workmen of the benefits allowed to them. The workmen are entitled to claim bonus which is more advantageous to them. In order to give effect to the proviso the bonus under each clause has to be calculated and ascertained simultaneously and not what has been contended. A term which is repugnant to that to be found in a document cannot be implied. Additionally, as already indicated, no ratio had been fixed and, therefore, the amount of bonus as contemplated by Clause 1(a) cannot be limited to the profit earned by the Company. The parties must be taken to have intended to say what they have in fact said. It is not our function to conjecture or guess at the meaning contemplated by the parties and thereby replace the document under consideration or read in it a term which has not been mutually agreed upon or incorporated in the document.
11. In the result I hold that the Company is liable to pay bonus under clause 1(a) of the Settlement despite the loss as claimed. Reference is answered accordingly.