DECISION ' This is an application under section 50 of the Industrial Relations Ordinance for interpretation of settlement dated 20th of June 1974.
2. The Union sent a letter dated 14-1-1974 to the Management asking for certain allowances on account of the increase in the cost of living but it seems that no step was taken by the Management. Consequently a Charter of Demands dated 22-1-1974 was served asking for various kinds of enhanced reliefs. One of the demands included a grant of Re. 25 per month as special allowance due to high cost of living in Karachi. Subsequently a settlement dated 22.26-1974 was arrived at whereby certain reliefs were granted in addition to Re. 20 per month as special allowance due to high cost of living in Karachi. The settlement came into effect from 1-1-1974. It was agreed that the parties would abide by the terms of the Dearness Allowance announced by the Finance Minister. It was also agreed that if by virtue of any law any benefit was compulsorily conferred on the workmen such benefit would be allowed by the Company provided the law was applicable to the Company subject to the condition that if by virtue of any law the benefit was improved or enhanced by the settlement the workmen would be entitled to receive such improved or enhanced benefits and not that granted by the settlement.
3. When Employees Cost of Living (Amendment) Act, 1974, was passed granting further allowance on account of rise in the cost of living, the Union approached the Management but it was refused on the ground that the benefit had already been granted on account of the rise in the cost of living and no further relief would be granted.
4. In view of the refusal the Union Made an application to the Labour Court under section 34 of I. R.
0. And the prayer was granted. Against that decision a writ was filed in the High Court challenging the jurisdiction of Labour Court. The writ petition was accepted on the ground that the Labour Court bad no jurisdiction and it was a question of interpretation of settlement and this could only be done by this Tribunal. In view of that decision the present application was made.
5. On the perusal of the records and proceedings and hearing of the arguments I am clearly of the view that the Management is bound to implement the provisions relating to the additional cost of living allowance granted by the Cost of Living Allowance Relief (Amendment) Act, 1974. There is no substance in the contention that the cost of living allowance of Rs, 20 per month granted in pursuance of the settlement was liable to be adjusted or other reliefs were granted for the same reason. A grant of Rs, 20 p.m. Was granted specially for the higher cost of living in Karachi and not in respect of the general cost of living prevailing in the country whereas the Act of 1974 was based on the rise in the cost of living in the entire country. Consequently the special allowance granted for Karachi only could not be intended to cover the general rise in the cost of living in the entire country and could not be treated as part of the benefit granted under the aforesaid Act.
Consequently it was not liable to the adjustment nor the Management was justified to deprive the employees from the benefits granted under the Act of 1974.
6. Indeed, some increase was made in the allowances but the explanation clearly lays down that an allowance not specifically given to provide relief due to the rite in the cost of living shall not be deemed to be intended due to the rise in the cost of living. Thus this explanation clearly excluded any increase in the allowances not specifically intended for the purpose of the rise In the cost of living. The settlement itself does not say that the increase in the various allowances was allowed due to the rise in the cost of living. Even the Charter of Demands does not say so and the demand with regard to the Increase by way of rise in the cost of living was confined to Karachi only.
Reliance, on behalf of the Management, was placed on the letter dated 14-1-1974 written by the Union but this letter could not be taken into consideration for the simple reason that no action was taken on this letter. This did not form the basis of the negotiations. Even otherwise as I have already stated that the allowance by way of relief in respect of rise in the cost of living allowance must be specifically stated in view of explanation and there is no such indication in the settlement itself.
7. In the result I hold that the Employees are entitled to receive the cost of living allowance granted under the provisions of Employees' Cost of Living Relief (Amendment) Act, 1974 with retrospective effect and this decision must be implemented by the Management.