1. DECISION This is an appeal against the Award of the Labour Court No.III, Karachi, on a petition at the instance of the Employees'. Union. It arose in the following circumstances: On the 30th of August, 1986 the union gave a notice under section 26(1) of the IRO which was accompanied by a charter of demands. There being no response from the Employers, the notice of strike followed on the 21st of September, 1986. The conciliation proceedings before the Conciliator also having fizzled out a failure certificate was issued by the Conciliator and a petition under section 32(1-A) of the I.R.O. Was presented before the Labour Court.
2. The respondents in their written statement contended that the office they were having in Pakistan was only a Liaison Office and the respondents did not undertake any industrial or commercial activity. The fact of the matter was that they were not allowed to do any business of any sort in Pakistan. Their local expenses were met out of the funds received from the Head Office in Japan. The only role of this office was to do the liaison work between the respondents and the Pakistani businessm en. Under the circumstances there was no question of any profit-making. They also did not receive any commission for the aforesaid work in terms of the permission granted by the Government of Pakistan. As it was doing no business the respondent could not be treated as an industry within the meaning of section 2(xiv) of I.R.O. As the matter stood, the petition was not maintainable. They also resisted the demands as put forward by the Union.
3. The petitioners examined Muhammad Younus their Joint Secretary, Zainul Abedin from Sumitome Corporation. Aliullah Kazmi, Assistant General Manager, Toyo Manka Kaisha Limited, John David, Mirza Sadiq Ali, Manager, General Affairs Department of Mitsubishi and S. Hara of Mitsubishi while the respondent examined Y. Tamura their Assistant General Manager.
4. The Labour Court found that the petition was maintainable but rejected most of the demands culminating in this appeal.
5. It is true that the respondents are registered with the Bureau of Investment Promotion and Supply Ministry of Industrial and Foreign Resources, Government of Pakistan as a Liaison Office and they are not allowed to undertake any business activities in Pakistan. Tamura further testified that the expenses of the Office were met by the remittances from Japan. Mr. Mehmood Abdul Ghani learned counsel for the respondents, on the basis of the principles laid down in Rawalpindi Club Rawalpindi v. Registrar of Trade Unions and 2 others 1989 PLC 760, K.G. Old, Principal, Christian Technical Training Centre, Gujranwala v. Presiding Officer, Punjab Labour Court and 6 others reported in PLD 1976 Lahore 1097 and A.F. Ferguson v. Sindh Labour Court and others reported in PLD 1985 Supreme Court 425 maintained that the respondents were not an industry. Mr. Abdul Majeed the learned representative for the appellant, however, urged that the last two mentioned cases supported his stand. We must therefore advert to the same.
6. The brochure of trade delegation of C. Itoh & Company Japan to Pakistan, which was here from December 15 to December 20, 1987, to put it in their words, assured that the items for export demands from Pakistan were cotton yarn, wool etc. And the imports from Japan were trucks, machinery, construction machinery, medical equipment boilers Marine engineering refrigerators etc. At page No. 11 thereof Karachi Office has been shown as a Representative Office of C. Itoh & Company Limited. The genuineness of the brochure is not under dispute.
7. The company has a worldwide net work and it is one of the top-drawer Companies of Japan. The only explanation given is that it was just a misprint.
8. It is an admitted position that they did documentation for and on behalf of the Head Office, and it was thereafter that the customer and the Head Office entered into negotiations. It is also an admitted position that the Karachi Office used to send the report to the Head Office in respect of the contracts showing the aggregate and target in respect of the items mentioned above. Mr. Tamura has also admitted that the trade enquiries were being received by Karachi Office and that pro forma invoices were being prepared here on behalf of C. Itoh & Company Japan. There are also some 35 members from different categories from the local staff, employed by the company.
2. All this goes on to show that the company was engaged in business activity which was of a very sophisticated nature being an adjunct of its parent company.
3. What is more, the respondents have themselves filed a petition against the appellants under section 32(1-A), I.R.O. You cannot approbate and reprobate in the same breath. The respondent being an industry we now advert to as to whether the demand put forward can be sustained.
4. DEMAND NO. 1(ANNUAL BONUS)
5. This demand pertains to annual bonus. As would be evident the appellants had claimed 5 gross annual bonuses on the basis of what they describe as global earnings.
6. It is nobody's case that there were any profits which accrued to the respondents locally and the concept of bonus is that the same is to be paid from the profits an employer makes. All that has been attempted to show is that C. Itoh & Company sells throughout world to the extent of 14.256 Yen (Billion). It does not show the profits earned from these sales. As held in the case of Lipton India v. Their Employees reported in 1989 LLJ 421 global profits cannot be the basis of payment of bonus, if the different units were so separated and unconnected that the trade activity of and the contribution of labour made in the profits thereof has no necessary connection with the trade and profits of the other units. The record also shows that the respondents have paid an ex gratia payment at the rate of 2.5 months gross salary in the year 1990 and they have been paying some bonus in the earlier years also. Mitsubishi and Mitsui Company are trading companies. The comparable concerns will be Somotomo Corporation, Toyo Manka Kaisha Limited and it cannot be said that the respondents have not been fair-minded in their grant. The demand of 5 bonuses in the circumstances of the case is not only high pitched but misconceived.
7. DEMANDS NOS. 2 and 3 (GRATUITY AND PROVIDENT FUND)
8. These demands pertain to Gratuity and Provident Fund, The Proviso to Standing Order 12(6) reads as under:-- "(6)Where a workman resigns from service or his services are terminated by the employer for any reason other than misconduct, he shall, in addition to any other benefit to which he may be entitled under this Ordinance or in accordance with the terms of his employment or any custom, usage or any settlement or an award of a Labour Court under the Industrial Relations Ordinance, 1969 (XXIII of 1969), be paid gratuity equivalent to (twenty) days wages, calculated on the basis of the wages admissible to him in the last month of service if he is a fixed-rated workman or the highest pay drawn by him during the last twelve months if he is a piece-rated workman, for every completed year of service or any part thereof in excess of six months: Provided that, where the employer has established a Provident Fund to which the workman is a contributor the contribution of the employer to which is not less than the contribution made by the workman, -no such gratuity, shall be payable for the period during which such Provident Fund has been in existence."
9. It has been stated by Mr. Tamura that the respondents have two retirement benefits namely Provident Fund and gratuity. They have also a separate Provident Fund Scheme where 7.5% of the basic wage is contributed by the employer. This is more than what the law contemplates, and the demand as put forward has only to be repelled.
10. DEMAND NO. 4 (HOUSE RENT)
11. The demand on this count is for the grant of 50% of the salary. It appears that 50% is being given in one of the Japanese concerns. In the evidence it has been admitted that apart from the House Rent which is 40% of the wages they are also paying 10% towards Utility Allowance to defray the demand of electricity, water and gas. This is also borne out from the Annexure R/6 pertaining to the salary. True that this 10% by way of Utility Allowance is not being given by any other comparable concern, but looking to the stagflation and the rise in the rent throughout the town, I will increase it by 5%, i.e. 45% as against 40% of the salary, as at present.
12. DEMAND NO. 5 (MEDICAL ALLOWANCE)
13. 10,000 Rupees per annum had been claimed as Medical Allowance for the workers and their families along-with arrangement for admission, hospitalization and treatment in a centrally located and fully equipped hospital. From the evidence of Mr. Tamura it appears that special facilities had been provided to the staff through hospitalization. Internal Policy in a sum of Rs.15,000 per year for peons and drivers, and Rs.30,000 for other staff. Apart from the above facilities, there is also the reimbursement of medical expenses to the extent of Rs.5,000 in a year subject to submission of cash memos. Looking to the facilities granted by Toyo Manka Kaisha Limited and Somotomo Corporation, the facilities given by the respondents appear to be more favourable.
14. DEMAND NO 6 (TRAVELLING ALLOWANCE)
15. Traveling Allowance and Dearness Allowance has been claimed for Sales Staff at the rate charged by Five Star Hotels plus Rs.400 as Traveling Allowance per day and for the drivers performing duties outside Karachi at Rs.150 per day plus basic facilities of living in a Five Star Hotel. Annexure R/4 deals with the facilities as being provided with effect from 1990: Case Class D & E ClassA, B & C ClassDrivers Peons Daily Allowance Incl. Hotel Charged (on Holiday)Rs.1,000 (Rs.1,300)Rs.900 Rs.1,100Rs.400 (Rs.400)
16. Daily Allowance= Hotel actual plus (on holiday)Rs.500 Rs.800Rs.500 Rs.600Rs.200 Rs.200 Returning day = after 8 p.m.
17. (on holiday)Rs.500 Rs.600 Rs.800Rs.400 Rs.500 Rs.600Rs.200 Rs.200 Rs.200 One day trip over 150 K.M. one way (on holiday)Rs.500 Rs.800Rs.400 Rs.600Rs.200 Rs.200 One day trip over 50, K.M. one way and over 10 hours (on holiday)Rs.500 Rs.800Rs.400 Rs.600Rs.200 Rs.200 Balochistan trip during Lunch hours (13.00 -15.00)Rs.100 (for Karachi Office only)
18. 1.Only one rate of above is applicable for one day.
19. 2.Only Drivers and Peons will be paid overtime for actual working hours of overtime during official trip along-with daily allowance. and the same appear to be more favourable as compared to the other comparable concerns and therefore there is no room for any further increase.
20. DEMAND NO. 7 (LUNCH AND DINNER ALLOWANCE)
21. It appears that Rs.50 is being paid to the senior staff who remain on duty on working days and the Labour Court had already said that the same amount be paid to other staff irrespective of their cadre. That is being fair.
22. DEMAND NO. 8(AGE OF RETIREMENT)
23. Different concerns have different ages and it could not be said, as borne out from the record that the respondents are out of step with the other concerns. The demand was rejected by the Labour Court and there is no occasion for me to interfere. '
24. DEMAND NO. 9 (PRIVILEGE LEAVE)
25. Under the provisions of section 49-B of the Factories Act, a worker who has completed a period of 12 months of service is entitled to 14 days Annual Leave. Accumulation of leave is for two years only.
26. The respondents have given 21 days annual leave with the accumulation of 2 years which is encashable. The workers have some other leaves also granted to them. The respondent concern works for 5 days a week with actual 35 working hours. Looking to all this, the demand as presented is indefensible.
27. DEMAND NO 10 (PROPER DESIGNATION AND PAY)
28. The demand was made but no evidence has. Been led in support thereof and the matter would rest at that.
29. DEMAND NO. 11 (FREE TRANSPORT)
30. It is alleged that free transport should be provided to all the members of the staff including Telex Operators and the female workers. The drivers and the peons should be provided with motor- cycles at the expense of the company.
31. The company, as to be expected has no arrangement to lodge their employees in any accommodation of their own. They live scattered in different parts of the town. In the circumstances a fleet of vehicles will be needed and there will also be running costs. They are already being paid Conveyance Allowance at the rate of 10% with a limit of Rs.200. However, there is no transport given to those employees who are provided free accommodation. The demand was properly rejected.
32. DEMAND NO. 12 (UNIFORMS)
33. At present the peons and the drivers are provided with 3 shirts and two pants in summer. They are also provided with 2 coats, once in two years, 2 ties, two pairs of socks and one belt with two pairs of shoes in two years. They do not get any winter uniform. However, it appears that comparable concerns like Toyo Manka Kaisha Limited and Sumitomo Corporation are also providing one winter uniform every year. The Labour Court had therefore considered the demand of the union for the grant of one winter uniform in 2 years both to the peons and the drivers. That should satisfy them.
34. DEMAND NO. 13 OMPREHENSIVE GROUP INSURANCE COVER It appears that the respondent as stated by Mr. Tamura have already arranged a Comprehensive Group Insurance to all its employees amounting to Rs.75,000 in relation to peons and drivers and Rs.1,00,000 in relation to others. In case of death as a result of accident the insurance of -the drivers is double the amount. That is enough to conclude the matter.
35. DEMAND NO 14 (ANNUAL RECREATION)
36. The record shows that the facilities as claimed have not been provided in any other comparable concern. According to the affidavit of Mr. Tamura Rs.3,000 is being paid to every employee on the birth of every child and Rs.5,000 in case of marriage of the employee. They are being given Rs.5,000 on the marriage of a son or a daughter and Rs.1,00,000 on the death of an employee, Rs.7,000 on the death of a son or a daughter, wife or parents, Rs.2,000 on the death of a newly born child and Rs.5,000 in case of still born. These are benefits which are not being given by any other comparable concern. The demand in the circumstances is without any merit.
37. DEMAND NO 15 (REVISION OF PAY SCALE)
38. No evidence has been led to justify the demand. The respondents are already giving the Special Allowance of Rs.200 per month to each employee in terms of section 3-A under Sindh Employees Allowance (Payment) Act, 1986. The demand is therefore untenable and has been properly rejected.
39. DEMAND NO 15 OFFICE ACCOMMODATION)
40. This demand for Office Accommodation was not pressed before the Labour Court and even here.
41. DEMAND NO 17 (DATE OF EFFECT)
42. Proper reason has been given by the Labour Court as to why it was to be ineffective from 1st April, 1991 for a period of two years. That is in consonance with the language of section 32(1-A)(5).