MAHMOOD AKHTAR (SENIOR MEMBER).---This order shall dispose of Appeals Nos. 12(70)/90 and 12(92)/92 as they substantially arise on the same questions of law and facts.
2. The facts in Appeal No. 12(70)/90 are that appellant, Boots Pharmaceuticals Ltd., Karachi signed a settlement on 9-5-1990 with respondent Boots Employees' Union, which expired on the 31st December, 1991. The appellant had intimated the respondent Boots Employees' Union on the 27th November, 1991 in writing that both parties would not be obliged to follow the provisions specifically stated in the said settlement (dated 9-5-1990) after the 31st December, 1991. On the 1st January, 1992, both parties served each other with their respective charters of demands. The appellant served the respondent-union with the notice of lock-out dated the 7th January, 1992 and the respondent-union served the appellant with notice of strike on the 12th January, 1992. The settlement dated 9-5-1990 stipulated among others, a holiday on Shab-i-Barat, attendance allowance @ Rs.195 p.m. And distribution of 2% of the Net Profits of the Company to its workers. The appellant displayed a notice on the 18th February, 1992 that (settlement dated 9-5-1990 having come to an end) the 20th February, 1992 (being Shab-i-Barat) shall be a working day. They also filed a Petition No. 24(33)/92-K before learned Member Karachi, and obtained a prohibitory order dated 19-2-1992 requiring their staff not to remain absent en masse on 20th February, 1992. When the officers and members of the respondent-union and other workers (respondent No. 2) remained absent on the 20th February, 1992 on a mass scale, the appellant displayed a notice on' the Notice Board, that the wages of the absentee workers shall be deducted in consequence of the prohibitory orders of learned Member, NIRC, Karachi (respondent No. 1) dated the 19th February, 1992. On that respondent-union filed an Application No.24(51)/92-K before learned Member, Karachi (respondent No.1) and obtained a prohibitory order dated the 25th March, 1992, directing the present appellants to refrain from deducting wages of workers for the 20th February, 1992 and from deduction attendance allowance for the month of February 1992 and thereafter till the final disposal of the case.
3. It was the case of respondent No. 2 before the learned Member, Karachi (respondent No. 1) that these facilities and benefits are threatened to be withdrawn by the management (appellant before us) so as to compel it to arrive at a settlement in accordance with the demands put forward by the present appellant through their charter of demands, respondent No. 2, therefore sought a prohibitory order, which, as has been earlier stated, was issued on 25-3-1992. Learned Member confirmed this order on 23-5-19r whereby besides confirming the said order he also allowed the main petition of respondent No. 2 the union.
4.The facts in Appeal No. 12(92)/92-K are that-respondent United Workers Front of Pakistan filed an application under section 22A(8)(g) read with section 15 of Industrial Relations Ordinance, 1969 and Regulation 32(2)(c)(d) and (e) of National Industrial Relations Commission (Procedure and Functions) Regulations, 1973 stating that on the expiry of previous settlement dated 17-10-1990 on 22-4-1992 the respondent-union, in its capacity as CBA, submitted a charter of demands but the appellant Pakistan Steel Mill Corporation refused to recognise it as CBA and did not negotiate with it. It was interfering with and affecting the balloting process (the application of the union for determination of CBA was pending before RTU Sindh), the management was also pressurising the union officers, diminishing withdrawing or altering the terms and conditions of employment and work to lower the position of the union in the eyes of its electorate, and compelling the union to accept the terms of the present appellant in connection with industrial dispute. The Management (present appellant) had challenged union's registration, ceased to recognise it as CBA, flouted the settlement dated the 17th October, 1990, besides disputing the status of workmen and influencing the balloting process and requesting the RTU to suspend the referendum.
5. The learned Member fixed the main petition for notice to the present appellant for comments on 30-5-199'2 and ordered as follows on 3-5-1992: Present: M/s. Muhammad Tasneem and Ch. Muhammad Ashraf, Advocates for applicant.
Notice to other side for comments, if any. To 30-5-1992.
Order on miscellaneous application Heard counsel. Notice. Meanwhile respondents and persons connected with them arc directed to refrain from interfering with or in any way influencing the referendum proceedings, compelling or attempting to compel the officers of Collective Bargaining Agent to arrive at a settlement of their choice, diminishing benefits available to workers under expired settlement and altering the terms of employment and conditions of work available to the workers under the settlement to their disadvantage till a new settlement is signed or till further orders, It is argued that the management is not recognising the present CBA as CBA on the ground that its term has expired. The learned counsel for the applicant submits that CBA shall continue as such until a new CBA is certified. I think the contention is prima facie correct. I therefore direct the respondents to treat the applicant as CBA till further orders. The respondents are also directed to conduct their affairs in a manner calculated to avoid occurrence of unfair labour practice."
The preliminary objections and counter-affidavits were filed on 30-5-1992 and the case was adjourned to 6-6-1992. When no one turned up for the petitioners, the learned Member dismissed the petition for non-prosecution. The counsel for present respondents filed application for restoration under Order IX, Rule 9 on 8-6-1992 on which notice was directed to be issued to the other side.
The counsel also filed an application under Regulation 32(2)(c)(d) and (e) of N.I.R.C. (P & F)
Regulations, 1973, the learned Member passed the following impugned order:-- Present: Mr. Muhammad Tasneem, Advocate for applicant.
Mr. Tasneem files application under Order IX, Rule 9, C.P.C. Read with section 151. Notice to other side for objections, if any. He also files application under Regulation 32(2)(c)(d) and (e) of NIRC (P&F)
Regulations, 1973. In the meanwhile prohibitory interim order passed on 3-5-1992 shall continue.
The implementation of order dated 7-6-1992 in respect of vehicles and main office opposite conference hall (old process yard transport) in the use of CBA is stayed".
6. The learned counsel and representative in both these appeals have been heard at length.
7. Before the major issue common to both the appeals is taken up I would like to deal with some preliminary issues raised in each case.
8. In Boot's case, the respondent had urged before the learned Member that the benefits and facilities under the settlement had been threatened to be withdrawn by the management (appellants before us) so as to compel the union to arrive at a settlement in accordance with demands put forward by the present appellant through their charter of demands, which according to the petitioners before him (respondents before us) amounted to illegal lock-out and unfair labour practice.
9. The settlement, it is admitted, had come to expire on 31-12-1991, after having subsisted for its normal and stipulated term of operation. The union itself gave the notice of strike on 12-1-1992, to the present appellants. Thus even on the basis of admitted facts, the allegation that facilities and benefits of settlement were withdrawn to compel the union to sign a settlement according to the wishes of the management had no force because the settlement had expired when the notice of strike was given.
9-A. But whether the benefits of a settlement persist after the settlement has expired? This is the question common to both appeals to which I shall revert after taking up the few preliminary matters raised:
10. In the appeal of Pakistan Steel Mills Mr. Ashraf Khan the learned counsel for the respondent raised the question of jurisdiction of this Bench, as he said that the appeal was not maintainable, being an appeal against an interim order and not against a final order. He cited a number of rulings in support such as those in the cases of Capt. (Retd.) Abdul Wajid and 2 others v. Sher Muhammad 1980 PLC 800(a), Muhammad Ramzan v. Trustees of Port of Karachi 1990 CLC 1086 @ pages 1093 and 1094, General Secretary, Karachi Electric Supply Ltd. Corporation Labour Union v.
Registrar NIRC and 2 others 1987 PLC 340 at page 345 and Mian Manzar Bashir and others v. MA.
Asghar Co. PLD 1978 SC 231 at 233 A + B. The former three judgments dilate upon word "decision" while the last judgment viz. That of the Hon'ble Supreme Court lays down that the orders embracing whole gamut of dispute are alone appeal-able. The former three judgments also lay down that it is only a final order which is appeal-able and that decision means act of deciding a dispute finally.
11. This is a very elegant argument at first sight. However the position in this case is that the impugned order dated 8-6-1992 which on the face of it looks like an interim order has the effect of a final order. The respondent-union was in no doubt about its final and decisive effect. They were quick to reap its harvest of benefit not due, and lost no time in serving the notice of strike on the appellant. They served the notice of strike on the very date i.e. 8-6-1992 when the order of the learned Member vested them with the status of CBA. This notice of strike could not have been otherwise served by them on the appellant, as the CBA was yet to be determined by the Registrar of Trade Unions, and no less than 15 trade unions were contesting that office. None of the above citations are therefore, relevant to the situation, as the order appealed against was not an interim order in effect.
12. The learned Member could not confer the office of CBA on one of the trade unions contesting that office because when law requires, something to be done in a particular manner, it has to be done in that and that manner alone or not at all. Although this cardinal principle of law does not need support of authorities yet I would like to cite the following passage from Corpus Juris Secundum pages 894-985, Vol. LIX: "In accordance with the maxim, "expressio unius est exclusio alterius", where a statute enumerates the things upon which it is to operates or forbids certain things, it is to be construed as excluding from its effect all those not expressly mentioned; and where it directs the performance of certain things in a particular manner or by a particular person it implies that it shall not be done otherwise nor by a different person. So where it prescribes certain conditions, compliance with which is necessary to the existence of a rights no other conditions need be fulfilled; but the maxim should be applied only as a means of discovering the legislative intent, and should never be permitted to defeat the plainly indicated purpose of the Legislature, nor will it, generally exclude the application of the statute to things of the same class as those expressly mentioned which have come into existence since the passage of the statute."
13. Section 22(2) of IRO, 1969 provides that where there are more unions than one, the CBA shall be determined through ballot and provides an elaborate procedure to determine CBA. The CBA could not be determines: otherwise than by holding secret ballot and following that procedure. To construe that CBA could be determined not by election but by order of the Court, even for a short duration, would be absurd, because following the election process prescribed under section 22(2) of IRO, 1969 in the condition precedent for determination of CBA and unless what is prescribed by law has been done in that and that manner alone and by the RITU, no CBA could be constituted.
Similarly, it would be absurd, if some Court, in the event of dispute between two candidates for membership of, say National Assembly, were to direct that one of them shall be MNA pending elections of the National Assembly, because, winning the election and that too in a particular manner, is prescribed as the condition precedent for that office and what is prescribed by law must be done in that and that manner alone.
14. An injunction is a preventive remedy for purposes of preserving status quo as held in Gul Hassan and 2 others v. Asmatullah and 6 others PLD 1978 Quetta page 164 at page 172. It must not create a totally new state of things Muhammad Idrees v. Collector of Customs, Karachi PLD 1971. Karachi 736 at page 739. The impugned order, by constituting the respondent-union as CBA, without any election of CBA having been held, and without hearing 14 other unions contesting CBA ship in the elections between unions, created completely a different situation which is not permitted by law.
15. The impugned order constituting respondent as CBA in Pakistan Steel Mill by a temporary injunction conferred an undue advantage of holding the office of CBA during the interregnum, while its 14 rivals were yet, contesting the office of CBA. It allowed the leadership of respondent union, at its will, either to sign settlement with the employer for its own benefits, or for that of workers, as it was answerable to none and did not have mandate of workers. The respondent- union was placed in a legal position to sign settlement even for 10 years and thus steal the wind out of the sails of any union which may succeed it for the main function of a union is to sign a settlement the grand concord on the terms and conditions of employment, between workers and employer. A settlement or grand concord of an employer with a union which does not enjoy mandate of workers could obviously lead to industrial anarchy and strife.
16. Further the impugned order could also not be sustained as it restores the respondent-union to its previous position of CBA through an interim order which is not the function of an interim order.
An interim order cannot be used to restore status quo ante. Reliance is placed on PLD 1970 SC page 139; Imam Bux v. Province of West Pakistan 1970 SCMR 491; Chiragh Din v. Chairman Thal Development Authority 1970 SCMR 29.
17. This principle that status quo ante could not be restored hits the impugned orders in both these appeals. In the Boot's case as well as in Pakistan Steels the learned Member could not legally restore status quo ante and give new life to the settlements which had expired and restore attendance allowance, 2% of the net profit and Shab-e-Birat in Boot's case and require the Pakistan Steel Mills to treat the respondent as CBA till further orders and stay "the implementation of order dated 7-6-1992 in respect of vehicles and main office in front of Conference Hall (old process yard transport) in the use of CBA" which had already been passed and implemented.
18. Further, there was a lack of jurisdiction involved, because NIRC is empowered under Regulation 32(2) of NIRC (Procedure and Functions) Regulations, 1973 only to prohibit an act likely to constitute unfair labour practice and not the act of alleged unfair labour practice which has already taken place. In Pakistan Steel Mills case, it was alleged in the very petition before the learned Member that the mill had termed the union as "ex CBA", ceased to recognise it as CBA union" made declaration not to be bound by the settlement and has flouted settlement dated 17-10-1990, and has curtailed benefit flowing therefrom and has influenced ballotting. Since these `unfair labour practices', if at all they were unfair labour practices, had already taken place, they could not be prohibited. Same principle would apply in Boot's case. If 2% profit and attendance allowance etc. Having become due, were not distributed, no prohibitory order could be issued because unfair labour practice, if any, had already been committed. Reliance is placed on Allied Bank of Pakistan v. Chairman, NIRC 1984 PLC 1342 at 1347; Saeed Ahmad Kazi v. NIRC 1984 PLC 397 and Hotel Intercontinental, Rawalpindi v. NIRC and 6 others 1980 PLC 752.
19. In both these cases before learned Member Karachi, the respondent---unions had espoused the case of (and restoration of rights of) individual workers, like Shab-i-Birat holiday, distribution of 2% net profit and attendance allowance to each worker in case of Boots and restoration of diminished rights of each workman, use of Company vehicles by workers etc. In case of Pakistan Steel. The petition by respondent-unions in case of both Boots and Pakistan Steel before the learned Member Karachi under section 34, were not maintainable, as held by the Supreme Court in the case of Karachi Pipe Mills 1992 SCMR page 36 and in Metro Garments Industries v. Labour Union KMC Building 1988 PLC 91; Crescent Jute Products Ltd., Jaranwala v. Workers' Union 1982 PLC 483; Karachi Pipe Mills v. Sindh Labour Appellate Tribunal 1984 PLC 1359, Bolan Textile Mill v. Labour Union Bolan Textile Mill 1988 PLC 751 and Allied Bank of Pakistan v. Labour Appellate Tribunal, Lahore 1982 PLC 1 at pages 15 and 16.
20. In view of this settled position of law, both the petitions by the unions were not even maintainable before the learned Single Bench.
21. The main issue which was hotly contested in both these appeals was, the proposition in the words of learned Member whether "-----after expiry of the last settlement its terms were no longer binding upon the company with the result that the parties can revert back to the date of settlement or for that matter even the minimum terms and conditions of service provided in the Schedule by the Standing Orders-----".
22. Mr. S.P. Lodhi, learned Labour Representative for the respondents in the Boots' case adopted the arguments of Mr. Ashraf Ltd. Counsel for respondents in Pakistan Steel who was of the view, that the benefits of a settlement continued to flow even after the period of operation of settlement has come to end. He stated that this view was expressed by the Indian Supreme Court in the case of South Indian Bank Ltd. v. A.R. Chacko AIR 1964 SC 1522 (V 51 C 202). It was observed by Mr. Das Gupta, J. While expressing the opinion of Indian Supreme Court: " .... This makes it clear that after the operation of an award has expired, the award does not cease to be effective. For it continues to be binding thereafter on the parties until notice has been given by one of the parties of the intention to terminate it and two months have elapsed from the date of such notice -----".
23. The learned counsel then cited the case of Pakistan Tobacco Company Limited, Chittagong v.
Chairman, 2nd Labour Court of East Pakistan PLD 1971 Dacca p. 262. This was the case where a Division Bench of the Dacca High Court had to decide as to what was the legal effect of the revocation of a settlement under section 40(2) of the IRO, 1969. In this case it was held that: "The interpretation sought to be given on the provisions of section 40(2) of the Ordinance that after the service of notice by either party to the settlement the parties are placed into the position of status quo ante to the settlement cannot be accepted as it will be contrary to the well-recognised principle of law that once a contract or settlement is arrived at and acted upon mere passage of time of its operation or any expression of intention unilaterally by one of the parties to the contract or settlement to terminate its binding effect does not and cannot put to an end to the obligations flowing there from nor are they revert back to the position of status quo ante. As it is physically impossible for a man to go back in point of time to the period ante or to the date of settlement, similarly it is against all principles of law and contrary to equity and justice that a party to a contract or settlement should be allowed unilaterally to change' his position to his advantage and to the disadvantage of the other party and simply because the period of settlement has expired, even though the settlement was acted upon. This interpretation is in accord with the purpose of maintaining industrial peace and the growth of industrial production, it will also avoid social friction between the workers and the employers to a great extent."
24. But the fact that when two parties expressedly agree to be bound by a contract or settlement for particular and specified period, they or any of them cannot, obviously, be compelled to observe it in perpetuity was too much for learned Punjab Labour Appellate Tribunal (then headed by Sardar Muhammad Ghafoor Khan Lodhi, Retd. J.) who in Workers' Union (CBA-- Regd.) Shakarganj Mills, Jhang v. Shakar Ganj Mills Ltd. 1990 PLC page 686 at page 687 held that: "On the expiry of the period of settlement agreed to between the parties, the settlement comes to an end but the benefits derived from the settlement continue till the parties entered into negotiations and reach a conclusion but so far as the settlement itself is concerned it expires on the date on which the period for which it was made comes to an end-------".
25. The learned counsel for the respondents cited two such cases which were relied upon also by the counsel for the appellant namely Karachi Stevedores Conference Ltd. v. Sindh Appellate Tribunal, Karachi 1986 PLC page 113 and Inayatullah v. Telephone Industries of Pakistan 1991 SCMR page 138, which I proposed to take up shortly.
26. A bare reading of section 40(2) of IRO, 1969 which is reproduced below:-- "A settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon; for a period of one year from the date on which the memorandum of settlement is signed by the parties to the dispute and shall continue to be binding on the parties after the expiry of the aforesaid period until 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." will show that law-giver intended a settlement to be binding for such period as is agreed upon between the parties to that settlement. It cannot be stretched beyond the period specified when it is clearly stipulated in the Memorandum of Settlement that the `agreement' shall exist only for two years. But where the parties do not specify any period, the law steps in and fixes the period.
27. In the case of Siemens Pakistan Employees' Union v. Siemens Pakistan Engineering Company Limited, Honourable Supreme Court in Civil Appeals Nos. K-33 and K-34 of 1964 (unreported case) while interpreting section 14(2) of Industrial Disputes Ordinance, 1959 which is analogous to section 40(2) in the Industrial Relations Ordinance, 1969 Honourable Supreme Court observed: "Upon the wording of the legislation itself it is manifest that the legislature was clearly making a distinction between the duration fixed by contract and the duration fixed by statute. In the case of a contract it is open to the parties to fix as long a period as they like as indeed, the agreement of 1962 has in the present case done. It is to continue for a period of ten years. But where this is not done, the legislature steps in and fixes a minimum duration subject to the right of the parties to determine it thereafter by notice. The legislature has in doing so acted equally consistently with another well-accepted principle that the right of the employer and employee to regulate their relationship by contract should be interfered with as little as possible. Thus the law steps in only where the parties have failed to make provision by contract."
It was further held that:-- "Upon a plain reading of subsection (2) it appears to me that the intention of the legislature clearly was to leave the parties to decide by themselves the period during which the settlement should be binding upon them but only where no such period had been fixed the legislature thought it proper to fix a minimum period of duration for the subsistence of the settlement so that during this minimum period some certainty is established and in the latter event since the legislature has fixed only a minimum period it was considered proper that the settlement should continue to be binding even after the expire of that period until determined by a party unilaterally by the service of a notice, as agreement cannot be altered unilaterally."
In the circumstances I am unable to agree with the interpretation put upon the words of subsection L2) of section 14 of the Industrial Disputes Ordinance 1959 by the High Court.
This controversy had thus been settled conclusively. But it was again raised before a Division Bench of Karachi High Court, Karachi in Stevedores Conference Ltd. v. Sindh Appellate Tribunal, Karachi 1986 PLC 113, wherein the learned Justice Tanzil-ur-Rehman considered the available precedents including the above-cited cases of Pakistan Tobacco Company and the Siemens case and ruled as follows after quoting the above-stated extract from the judgment of Honourable Supreme Court in Civil Appeals Nos. K-33 and K-34 of 1966 Siemen (Pakistan) Employees' Union v. Siemens (Pakistan) Engineering Company Ltd: "... Mr. Iqbal Qazi, also placed his reliance on several other cases reported as Trading Corporation of Pakistan Ltd., Karachi v. Employees' Union 1974 PLC Note 76 at page 42; Workers' Union v. The Trans Oceanic Steamship Co. Ltd. 1969 PLC 341 and Avalene Silk Mills v. Second Labour Court, Karachi and 7 others 1981 PLC 4.
In the first case, named above, Mr. Inamullah Khan, J., who had been Chief Justice of the erstwhile High Court of West Pakistan, as a Chairman of Sindh Labour Appellate Tribunal, Karachi, agreeing with the submission of the learned counsel appearing in the said case observed that "where the operation period of the settlement had been fixed by the settlement itself. No notice to determine the same is necessary. It is only in case where no period is fixed by operation of law under section 40 of the Ordinance that it would be necessary to give a notice by the party who wishes not to be bound by it.
In the second named case, Industrial Court of West Pakistan relying on the unreported decision of the Supreme Court, already referred to above, held that the settlement arrived at between the parties lapses automatically after the expiry of the period mentioned therein and that no notice is required for its termination.
In the 3rd named case, the parties had entered into a settlement for a period of one year. A learned Single Judge of this Court, as he then was, thus, observed that `the agreement between petitioners and the workers' union has provided for gratuity to be given to the workers on resignation or in the event of death of any one of them to his heirs was in force for only one year from 4-9-1972 to 3-9- 1973 Under subsection (2) of section 40 of the Industrial Relations Ordinance 1969 this settlement was only binding till 3rd September. 1973.
The cases cited by Mr. Kazi fully support his contention, whereas the cases relied on by Mr. Obaidur Rehman are either not applicable to the facts of the present case or that contrary view holds the field. The decision of the Dacca (Pakistan) High Court 1972 PLC 190 stands overruled by the unreported decision of the Supreme Court of Pakistan in Sicmen's case to the extent that it relates to section 40 (2) of the Ordinance about mutual settlement fixing a period therein, as in the present case. The judgment reported in Siemens (Pakistan) Employees' Union v. Siemens (Pakistan)
Engineering Co. Ltd. 1966 PLC 274 was challenged in appeal in the Supreme Court and was set aside. The decision of a learned Single Judge of Lahore High Court PLD 1978 Lah 955 also stands overruled by the unreported 'of the Supreme Court, referred to above, in so far at the observation of the learned Judge relates to the decision on a settlement for a specified period' As regards the Judgment of the Supreme Court in Moharram Ali' case PLD 1970 SC 292=1970 PLC 408 it is distinguishable as it relates to an award under subsection (5) of section 14 and not to a settlement of the parties fixing a period. It is also pertinent to note that the phraseology used in subsection (5) of section 14 of Industrial Disputes Ordinance, 1959 (corresponding to subsection (5) of section 40 of the I.R.O. Of 1969) is quite similar to subsection (2) of section 40. Subsection (5) provides that `nothwithstanding the expiry of the period for which an award is to be effective under subsection (3), the award shall continue to be binding on the parties until 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 award.'
Section 40 of the I.R.O. Is a composite section dealing with a number of things, namely, the commencement of settlement subsection (1), termination of settlement subsection (2). Again, the termination of settlement speaks of two situations (i) where the period is fixed by the settlement itself and (ii) where no period is fixed therein. Subsections (3) to (5) deal with the effective date on an award and its expiry. Settlement and award belong to two different categories. Settlement is arrived at by free volition of the parties themselves, whereas an award is the decision of a third person imposed on the parties by statute. Subsections (1) and (2) deal with settlement whereas subsections (3) to (5) dealing with an award are entirely different and of no avail to the facts of the present case.
The contention of Mr. Obaidur Rahman that under subsection (2,) of section 40 a notice of termination of settlement in both the cases where a period has been fixed in the settlement or not will be necessary is entirely misconceived. We are clear in our minds that subsection (2) envisages two different situations. The settlement if some period has been fixed therein will come to an end on expiry of the said period, and if it is not so fixed, then it will remain effective for a period of one year from the date of settlement and for a period until the expiry of two months after a noticed of termination of the settlement has been given, by either party. It is noticeable that the second part of this subsection mentions the word `period aforesaid' in the singular and not in the plural. It can only be referred to the statutory period of one year, as mentioned later, as fixed by statute and not a period fixed by the parties themselves as mentioned earlier. Thus there is a clear indication that the latter provision where a notice of termination has been provided applies only to those cases where no period has been fixed by the parties in the settlement. Subsection (2) of section 40 of the I.R.O. Cannot, therefore be pressed into service for continuation of the First Settlement in the present case..."
28. The case of TCP, Karachi v. Employees' Union 1974 PLC Note 76 at page 42; Workers' Union v.
Trans Oceanic Steamship Co. Ltd. 1969 PLC 341 and Avalene Silk Mills v. Second Labour Court, Karachi and 7 others 1981 PLC 4 which have also been cited by the counsel for appellants in the instant appeal, were also cited before and considered by learned Sindh High Court.
29. It is thus clear that the decision of the Dacca (Pakistan) High Court 1972 PLC 190, PLD 1978 Lahore 955 National Embroider Mills v. Punjab Employees' Social Security Institution, Lahore stood overruled by the judgment of Honourable Supreme Court in Civil Appeals Nos. K-33 and K-34 of 1966. Same is the case with the Workers' Union Shakar Ganj Mills, Jhang v. Shakar Ganj Mills Ltd. 1990 PLC page 686 at 687 and the citation from the judgment of Mr. Das Gupta, J., a learned Judge of Indian Supreme Court in the case cited as AIR 1964 SC 1522 was irrelevant because it related to an award and not settlement.
30. Both the parties laid stress on the ruling of Honourable Supreme Court in 1991 SCMR 138. The facts in that case were that the two petitioners working in T.I.P., Hazara, rack assembly Shop No. 336 as piece rated workmen were transferred to Shop No. 335. Instead of paying wages as they were being paid in Shop No. 336 they were paid wages according to wages payable in Shop No. 335.
They approached Labour Court which allowed the claim in terms of settlement dated 12-9-1977 (first settlement). In 1980 another settlement (hereinafter referred to as Second Settlement) came into being. They insisted for wages according to 1977 of first settlement. When refused they filed applications for Rs. 25,462.25. They were allowed to the extent of Rs. 10,388. On that the respondent- Company filed appeal which was dismissed. Company filed Writ Petitions No. 30 of 1985 and No. 31 of 1985 which were allowed. On that the petitioners filed petitions for leave to appeal. The operative portion of the judgment of Honourable Supreme Court is reproduced below: "...In support of the above petitions Mian Inamul Haq, learned A.S.C. Appearing for the petitioners, has contended that the High Court was not justified in remanding the case to consider inter alia the `second settlement' which could not have nullified the `first settlement' for the purpose of payment of wages to the petitioners as per judgment of the Labour Court. In our view the above contention seems to be devoid of any force. A settlement between an employer and the C.BA.
Remains operative for the period mentioned in the settlement or in the absence of any agreed period, for the period provided under the relevant law. In the instant case, it has not been denied that the respondent and the C.BA. Had entered into a `second settlement' with effect from 10-4- 1980 and, therefore, the learned Labour ('curt and the learned Labour Appellate Tribunal should have taken into consideration the effect of the above `second settlement' on the petitioners' claim.
Then it was contended by Mian Inamul Haq, learned A.S.C. For the petitioners, that even the `second settlement' ceased to operate with effect from April'1982. If this is so, it would be open to the parties to rely upon the same. The petitions have therefore, no merits. Leave is accordingly refused with the above observations."
31. This also reiterates the position that a settlement is operative between the parties to the settlement for the period stated in the settlement and not beyond that period. We have therefore nothing more to add to this clear and unequivocal position.
32. The argument of learned Member that:-- "...Standing orders prescribe minimum terms and conditions of service of workmen and that the same can be modified by a collective agreement subject to the condition that benefits provided for in the Standing Orders cannot be taken away or diminished by such an agreement. These provisions further show that when a settlement or collective agreement takes place between parties, the terms thereof became part of Standing Orders which have statutory protection and cannot be modified except in the manner laid down in the Ordinance.
Thus on the expiry of settlement terms of previous settlement become open for further negotiations. This interpretation finds further support from section 7 of the Ordinance which provides punishment for an employer who modifies the Standing Orders `as applicable to his establishment', otherwise than in accordance with section 4. It would be seen further that the Standing Orders in relation to an Industrial or Commercial establishment vary from establishment to establishment on the basis of settlements signed between parties."
33. If this interpretation is accepted then it would mean that although the settlement which amends the Standing Orders, was to exist with the express stipulation of the parties, say for two years, yet its operation would continue despite the expiry of settlement and the stipulation regarding the operative period of settlement to the contrary which is against reason and good sense.
34. This reason for anxiety to stretch the period of operation of settlement is due to the fact that it is generally considered that after the expiry of settlement so legal vacuum shall ensue. This is not the case. The law given desired the trade unions and employers to put their faith in due process of law and promotion of collective bargaining process. It was therefore envisaged that as soon as a settlement was about to end the C.BA. Or the employer as the case may be shall take recourse to the procedure under section 26. As soon as a notice of strike or lock-out would be given the provisions of section 47 would become applicable. The terms and conditions of employment would then stand as they were at the time of giving that notice i.e. More undertaking conciliation process unless of course, changed by settlement or award as the case may be. Therefore the law giver did not envisage any legal vacuum.
35. In view of what has been stated above we accept both these appeals and set aside the impugned orders.