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.O -1/74, dated 2^th March, 1975 referred an Industrial Dispute [between Al-Muitaza Workers' Union and Management of Al-Murtaza Textile Mills, Hyderabad for adjudication and determination as set out in the table given in the Notification which is reproduced below:-- Table "Payment of bonus equal to 150 days* wages". Immediately on re9eipt of this reference from the Federal Government, I directed th9 parties to appear at Karachi on 5th April 1975. On that date it was brought to my notice that tne President of the Union namely Muhammad Hayee 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 tne papers lying therein. I accordingly directed the Deputy Commissioner, Hyderabad to arrange to get Muhammad Hayee produced before the Commission on 11th April 1975 at Circuit House, Hyderabad. I also directed the Deputy Commissioner, Hyderabad to allow Bashir Ahmed, General Secretary of the Union to have access to his office to collect certain papers which he required for production before the Commission.
2. On 11th April 1975 I issued an order directing the workers to discontinue strike from 12th April 1975 which was accordingly called off on that date.
3. The Union produced Mr. Bashir Ahmed, General Secretary, Al- Murtaza Textile Woikers' Union who stated that the number of workers employed in the Mills is 1,400 and that there being only one Union in the Mills, it was demeed to be the CBA. Mr. Bashir stated that the Union has claimed 6 months* wages as bonus from the Management, which the Management has refused to pay. According to Mr. Bashir, the Mill comprises of 25,000 spindles and that out of these 22,000 spindles are being worked. He further stated that the balance-sheet prepared by the Management for the year 1973-74 shows a loss of Rs. 64,40,167. He, however, pointed out that stocks worth Rs. 1,50,02,538 were lying with the Management on 30th September, 1974. According to Mr. Bashir, the workers were given bonus during the previous years as under:-- 1970- 71 1971- 72 1972- 73 60 days* salary. 90 days* salary. 110 days* salary.
4. He claimed that during the year 1970-71 there was a loss of Rs. 2,94,207 to the Management but the workers have always been receiving bonus continuously even prior to 1971. Mr. Bashir stated that they had never demanded profit bonus, ln cross-examination he has admitted that bonus for the year 1972-73 was given under Standing Order 10-C of the Standing Orders Ordinance. Mr. Bashir Ahmed repudiated the suggestion that the workers were responsible for adopting 'Go-Slow' tactics or that they manufactured poor quality of yarn because on the other hand the Director of the Mill had appreciated the output of the workers.
5. The respondent produced Mr. S.A. Rahim, Chief Accountant, Al- Murtaza Textile Mills, Hyderabad who produced audited balance-sheets pertaining to the years 1970-71, 1971-72, 1972-73 and 1973-74. According to these balance-sheets the Mill suffered a loss to the tune of Rs. 2,94,207 and 64,40,167 during the years 1970-71 and 1973-74 respectively. Mr. Rahim admitted that the manufactured yarn worth Rs.
1,50,02,528 was in stock on 30th September 1974. He was asked to clarify as to whether the loss would be converted into profit if the amount of loss is deducted from the cost of the stock lying in the Mill. He stated that no such presumption could be raised for the simple reason that the value of the stock is "at cost" and if the Mill had sold it, it would have got less price tfian the cost. He further stated that the Mill has already raised a loan of Rs. 31,00,000 from the Habib Bank Limited, Karachi besides Rs. 1,55,85,552.87 as overdraft. Mr. Rahim also stated that the Mill had further suffered a loss of Rs. 21,00,000 from lst January, 1975 to 31st March, 1975. Mr. Rahim admitted that the loss whiffy has been carried to the balance-sheet pertaining to the year ending 30th September 1974 is Rs.
16,13,62b and that previously they had an amount of Rs. 48,26,541 as un-appropriated profit which was adjusted against loss and thereby they showed Rs. 16,13,626 as loss carried forward. He admitted that the Mill has always been giving bonus to the workers except this year when it has shown a loss and that the Mill had also suffered loss once before i.e, during the year 1970-71.
6. The respondent also produced Mr. Obedullah, Manager, Al-Murtaza Textile Mills, Hyderabad who deposed that he was not satisfied with the production or quality of the yarn manufactured by the workers as they had received complaints from outside regarding inferior quality of the yarn because of improper winding. He produced photostat copies of the letters received in this connection where importers had claimed damages. Mr. Obedullah stated that the Management had been reprimanding the workers and writing letters to the Union inviting their attention to the inferior quality of yarn. They have also been complaining to the Labour Department due to which the workers resorted to hooting. Mr. Khan stated that the main reason for accumulation of stock of yarn was that it was of inferior quality and for which the workers were entirely responsible. He pointed out that some of the workers were charge-sheeted for spoiling the quality but they were allowed to go scot free through the help of the Union. The learned counsel for the Management has quoted Supreme Court of Pakistan ruling reported in PLD 1960 SC 14 wherein it has been held that the employees' claim to bonus founded on alleged big profits arrived at mainly by disallowing deduction on account of depreciation, was not acceptable as depreciation fund was an absolute necessity for industrialists.
7. I do not think any amount on account of depreciation has been deducted in any year to convert losses into profit by this Mill and the ruling is, therefore, irrelevant in this matter. The Union's main contention is that the workers have been receiving bonus for the past so many years in spite of the fact that the Mill had suffered a loss during one year and on analogy of that one year have demanded bonus for the year 1973-74 as well, although the Mill had suffered a loss.
8. The learned counsel for the respondent has not been able to advance any cogent reason for entitling the workers to bonus equivalent to 60 days* salary in the year 1970-71 when the Mills had incurred a loss of Rs. 2,94,207. The audited balance-sheet (Exh. R/6) for the year 1973-74, shows a loss of Rs. 16,13,626. It also shows that on 30th September, 1975, the value of stocks was Rs.
1,24,89,889 while the General Secretary of the Union has in his statement asserted that stock (yarn) worth Rs. 1,50,02,538 was lying with the Management. This fact has been admitted by witness for the respondent Mr. S. Rahim, Chief Accountant of the Mills. Here I would like to reproduce the statement of the witness. "To Court". I admit that the manufactured yarn worth Rs. 1,50,02,538 was in stock on 30th September 1974. The accounting year 1973-74 was from lst October, 1973 to 30th September, 1974. Q. If we deduct the loss incurred by the Mills from the stock then the presumption would be that profit has accrued to the Mills. What have you to say in this connection? A. No such presumption could be raised for the simple reason that the value of the stock is ''at cost" and if the Mills had sold it, it would have got less price than the cost.
9. In my opinion it is unfair to show the value of the stock at cost value. A nominal profit of 5% would increase the assets to about Rs.
7,50,000. However, I am not taking into consideration any profit on stock.
10. All the same, as it has been admitted that stock worth Rs. 1,50,02,538 was lying on 30th September, 1974 while stock worth Rs. 1,24,89,889 has been shown in the assets of balance-sheet the difference of Rs. 25,12,649 has not been shown in audited balance- sheet if the loss of Rs. 16,13,626 is deducted from Rs. 25,12,649 there would be a profit of Rs. 8,99,023 and the workers would become entitled to profit bonus. However, since the Management has been paying bonus over an unbroken series of years and even in the events of loss, I see no reason why they should not pay bonus to the workers foi the year 1973-74, ,
11. 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' wages to which the workers were entitled on 30 September 1^74 is paid to the workers at pro rata basis in the same manner as was paid in the years 1970-71 and 1971-72 and I award accordingly and direct the respondent to pay bonus by 15th May, 1975 at the " latest. The daily-rated workers would receive'the bonus 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 diys. The basic wage shall not include Cost of Living Allowance. l2. Finally I would like to observe that if the workers in future contribute towards losses by adopting go-slow or, remaining on illegal strike, they would be disentitled from receiving bonus and that this award should not form a precedent for future.