ZAIN PACKAGING INDUSTRIES LIMITED, KARACHI Versus ABDUL RASHID

1. SAEEDUZZAMAN SIDDIQUI, J.‑‑ ‑The above appeal with the leave of this Court is filed against the judgment of a learned Judge in Chambers of the High Court of Sindh dated 21‑4‑1981, passed in Constitution Petition No.S‑89 of 1980. Leave was granted in the case to consider the following questions of law:‑‑

2. "In seeking leave to appeal the counsel for the petitioner contends that the word 'wages' does not include house rent, conveyance and tea allowances; and as this word is not defined in the Standing Orders Ordinance, its definition in the Payment of Wages Act should be taken into consideration for it is under that Act that the payment of wages is enforced.

3. The High Court has adopted the meaning given to it in the Payment of Wages Act in addition to the meaning given to it in the Law Lexicon and upheld the orders of the Courts below. As to how the word 'wages' in Standing Order 12(6) should be construed requires consideration, Accordingly we should grant leave to appeal to the petitioner. "

4. The first respondent in the case was employed by the appellant as a Helper on 1‑3‑1969. He resigned from service on 15‑12‑1978 which was accepted on 16‑12‑1978. On the date first respondent resigned from service, he was receiving a salary of Rs.490 per month, details whereof were as under:‑‑

(i) Basic Pay. Rs.290

(ii) Cost of Living Allowance. Rs.110

(iii) House Rent Allowance. Rs.40

(iv) Conveyance Allowance. Rs.35

(v) Tea Allowance. Rs.15

5. _________

6. Rs.490

7. _________

8. The first respondent claimed gratuity in accordance with the provisions of Standing Order No. 12(6) (S. O. 12(6)) of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (hereinafter to be called as 'the Ordinance' only), calculated on the basis of his pay of Rs.490 per month, which was disputed by the appellant. This led to the filing of an application by the first respondent before the Authority under the Payment of Wages Act, 1936 (hereinafter to be referred as 'the Act' only) for recovery of the amount of gratuity. The Authority under the Act, by its order dated 24‑2‑1980, directed the appellant to pay gratuity to respondent No. 1 after calculating the same on the basis of his last pay of Rs.400 per month, which included his basic pay and cost of living allowance only. Dissatisfied with the above order of the Authority, the first respondent filed an appeal before the Sindh Labour Court No. III, Karachi; which was accepted and the claim of gratuity was allowed on the basis of the last pay of Rs.490 drew by the first respondent which included his basic pay, cost of living allowance, house rent, conveyance allowance and tea allowance. The appellant filed Constitution Petition No. S‑89 of 1980 before the High Court of Sindh to challenge the order of Sindh Labour Court No. III, Karachi, dated 26‑7‑1980 and contended that the word 'wages' in its ordinary meaning did not include, house rent, conveyance allowance and other allowances paid to an employee. It was contended by the appellant before the High Court that the calculation of gratuity payable to the first respondent on the basis of his last salary of Rs.490 per month was totally erroneous, as this sum also included the house rent, conveyance allowance and tea allowance paid to first respondent, which did not form part of his wages. The learned Judge in Chambers, however, did not agree with the contention of the appellant and relying on the definition of 'wages' as given in the Act held that the calculation of gratuity on the basis of last pay of Rs.490 per month drawn by the first respondent was legally justified and dismissed the writ petition. Leave was granted by this Court against the judgment of the learned Judge in Chambers dated 21‑4‑1981, as aforesaid.

9. Mr. Abdul Hafeez Pirzada, the learned counsel for the appellant, has raised the following contentions in support of the above appeal:‑‑

(i) That the learned Judge in Chambers could not refer to the definition of ' wages' given in the Act while interpreting S.O. 12(6) of the Ordinance as neither the Act and the Ordinance were statutes in pari materia nor the definition of words and expression given in the Act were extended to the Ordinance. In the alternative the learned counsel contended that the learned Judge while relying on the definition of 'wages' given in the Act failed to take note of sub‑clauses (a) to (e) of clause (vi) of section 2 of the Act, which excluded from the definition of 'wages' the house rent, conveyance allowance and the allowances of like nature;

(ii) that the learned Judge in Chambers failed to notice that in view of the proviso to section 7 of the Employees' Cost of Living (Relief) Act, 1973, the cost of living allowance was declared not to form part of ' wages' of a worker for the purposes of the Act and as such the application filed by respondent No. 1 before the Authority under the Act for recovery of gratuity was incompetent; and

(iii) that the term wages' includes only those payments which are made to a workman on permanent basis and do not include allowances of various nature which are variable according to the circumstances of the case and as such calculation of gratuity payable to first respondent by the Courts and Tribunals below taking into account the conveyance allowance, house rent and tea allowances, as part of the wages of first respondent was illegal.

10. The learned counsel for respondent No. 1 on the other hand supported the impugned judgment and contended that the cost of living allowance, house rent, conveyance allowance and tea allowance were‑ being paid to the first respondent on regular and permanent basis and as such they were rightly treated as part of his wages' and, therefore. no error was committed by the High Court or the tribunal below in calculating the gratuity payable to the first respondent on the basis of his wages of Rs.490 per month, which included besides his basic pay, cost of living allowance, house rent, conveyance allowance and tea allowance. We have heard the learned counsel for the parties at length and our conclusions are as follows.

11. The real question which requires consideration in the case is, as to what constituted 'wages' of the first respondent within the meaning of Standing Order 12(6) of the Ordinance. Standing Order 1206) of the Ordinance provides that when a worker 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 found entitled under the Ordinance or in terms of his employment or any custom, usage or any settlement or an award of a Labour Court under the I.R.O., 1969, be paid gratuity equivalent to 30 days' wages, calculated on the basis of the wages admissible to him during the last month of his service if he is a fixed‑rated workman or the highest pay drawn by him during the last 12 months if he is 'a piece‑rated workman, for every completed year of service or any part thereof in excess of six months. It is not disputed that the first respondent was a fixed rated worker. Therefore, he was entitled to the payment of gratuity calculated on the basis of the wages admissible to him in the last month of his service. The word 'wages', however, is not defined in the Ordinance. The learned Judge in Chambers after referring to the definitions of 'wages' as given in the Act and in Law Lexicon reached the conclusion that these definitions are wide enough to include all other allowances paid in cash to an employee as part of wages. The learned counsel for the appellant contended that the learned Judge in Chambers while referring to the definition of wages as given in section 2(vi) of the Act, failed to take into account sub‑clauses (a) to (e) of clause (vi) of section 2 of the Act which excluded allowances like house rent, conveyance allowance etc. being treated as part of the 'wages'. It is also contended by the learned counsel that the Act and the Ordinance not being statutes in pari materia the definition of 'wages' given in the Act could not be referred for interpreting the provisions of the Ordinance.

12. In the case of Pak Cigarette Labour Union v. Pakistan Tobacco Co. Ltd., Karachi and another (PLD 1981 SC 495) S.O. 10‑C of the Ordinance was sought to be interpreted with the help of definition of 'wages' given in the Act. This Court did not accept the argument and repelled it, as follows:‑‑

13. "Mr. Minto then attempted to defend the view taken by the learned Judges of the Peshawar High Court on the basis of the definition of wages in the Payment of Wages Act, because the definition of wages in clause (vi) of section 2 of this Act expressly states that wages mean 'all remuneration and includes any bonus . . . " And, the learned counsel placed great reliance on this definition, because this statute was, so to say, part of our Labour Court. Now, although the definition of wages in this statute has been extended to include bonus, this is by an express provision. Secondly, this statute is not in pari materia with the Ordinance, and, on other hand, the definition of wages in some of other statutes in our Labour Code, such as the Social Security Ordinance and the Minimum Wages Ordinance, expressly clarify that wages do not include any bonus paid to workman. Obviously, therefore, the definitions of wages in the various statutes constituting our Labour Code have reference to the objects of those statutes, and the definition of wages in one statute should not, so to say, be transplanted into another statute unless the Legislature has so prescribed. And, for example, in the West Pakistan Shops and Establishments Ordinance, 1969., the Legislature has made an express provision that wages under this Ordinance mean wages as defined in the Payment of Wages Act."

14. In view of the above observations of this Court in the case of Pak Cigarette Labour Union (supra) we are inclined to hold that the word 'wages' used in Standing Order 12 of the Ordinance could not be interpreted with the help of the definition of 'wages' given in the Act. What then the 'wages' mean in Standing Order 12(6)? In the case of Pak Cigarette Labour Union (supra) though this Court held that reference cannot be made to the definition of wages' in the Act while interpreting Standing Order 10‑C of the Ordinance, but it also made the following further observation, jest after the above‑quoted passage:‑‑

15. "But, as there is no such provision in the Ordinance, I am unable to accept Mr. Minto's submission, and, as pointed out by Lord Halsbury long ago, wages mean 'that part of pay which was intended to remain permanently'. "

16. Similarly, in the case of Secretary, Labour Department, N.W‑F.P. Government, Peshawar and :2 others v. Colony Sarhad Textile Mills and others (PLD 1978 SC 29), this Court while interpreting the provisions of Standing Order 12(6) of the Ordinance observed as follows:‑‑

17. "As the direction that a workman 'shall in addition to any other benefit to which he may be entitled .... be paid gratuity equivalent to twenty days' wages ....' is clear beyond any doubt, I would again quote here a passage from Maxwell (p. 28):‑‑

18. 'The first and most elementary, 'rule of construction is that it is to be assumed that the words and phrases of technical legislation are used in their technical meaning if they have acquired one, and otherwise in their ordinary meaning, and the second is that the phrases and sentences are to be construed according to the rules of grammar.'

19. As the words 'to be construed" in Standing Order 12, as it now stands, are not technical words, we must construe them according to their ordinary meaning, and the ordinary meaning of the words 'shall . . . be paid gratuity equivalent to twenty days' wages ...:.' is very clear. They mean that a gratuity has to be paid at the rate of twenty days' wages for every year of service. There is no ambiguity about these words, therefore, we cannot curtail or modify their ordinary meaning by reference to presumptions for construing ambiguities in Statutes. Accordingly, with the utmost respect, I am unable to agree with the view of the Peshawar High Court, and I would accept the contention of Mr. Akbarji and of Mr. Safdar Hussain that all workmen whose services are terminated after the promulgation of the amending Ordinance are entitled to a gratuity at the rate of twenty days' wages for every completed year of service as prescribed in clause (6)."

20. In the case of Annoor Textile Mills Ltd. and another v. Federation of Pakistan and another (PLD 1994 SC 568) this Court while interpreting the word ' wages' which is defined in West Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969, as all cash remunerations payable to a workman including dearness allowance, house rent, conveyance allowance, cost of living allowance, special allowance and any other fixed allowance, but does not include travelling allowance, bonus and gratuity, observed as follows:‑‑

21. "3. The literal meaning of 'wages' is the remuneration payable to a worker. It also includes other benefits provided it is so agreed or payable as wages under the law. Under various legislative enactments term ' wages' has been given wide meaning by including in it allowances of various nature, bonus, house rent and cost of living allowances.

4. The learned counsel has referred to the meanings of the word 'wages' given by various law dictionaries, which are reproduced as follows:

22. Stroud's Judicial Dictionary:

23. 'Wages': Though this word might be said to include payment for any services, yet, in general, the word 'salary' is used for payment of services of a higher class, and 'wages' confined to the earnings of labourers and artisans. "

24. Wharton's Law Lexicon:

25. "Wages: the compensation agreed upon by master to be paid to a servant, or any other person hired to do work or business for him. "

26. Black's Law Dictionary:

27. "Wages: A compensation given to a hired person for his or her services; the compensation agreed upon by a master to be paid to a servant, or any other persons hired to do work or business for him... Every form of remuneration payable for a given period to an individual for personal services, including salaries, commissions, vacation pay, dismissal wages, bonuses and reasonable value of board, rent, housing, lodgings, payments in kind, tips, and any other similar advantage received from the individual's employer or directly with respect to work for him. "

28. Ballentine's Law Dictionary:

29. "Wages: Compensation for manual labour, skilled or unskilled, paid at stated times, and measured by the day, week, month, or season, sums paid as hire or reward to domestic or menial servants, artisans, mechanics, labourers, and other employees of like class, as distinguished from the compensation of clerks, officers of corporations, and public officers."

30. K.J. Aivar's Judicial Dictionary:

31. "Wages means remuneration, which an employer is liable to pay if the term of the contract of employment are fulfilled... Any wage fixed by the award of a tribunal or by a conciliation proceeding must necessarily mean the wages which, though not expressly agreed. upon between the parties, must be taken to have been impliedly agreed upon between the parties... The minimum wages fixed by the award or in conciliation proceedings are well within the definition of 'wages' given in the Act."

32. By referring to these definitions the learned counsel has contended that the increase given to the workers by the impugned Act cannot be termed as wages, but it is a bounty and it is not within the discretion of the respondents to award such bounty to the workers or anyone else. The word 'wage' has different meanings as given to it by the special legislations. Each labour legislation dealing with the wages of all categories of workers or persons has given its own meaning. In the said Act before amendment, 'wage' was defined as follows:‑‑

33. "Wages" means all cash remuneration payable to a workman, and includes dearness allowance, house rent, conveyance allowance, and any other fixed allowance, but does not include travelling allowance, gratuity or bonus."

34. Now after amendment the definition has been changed as follows:‑‑

35. "' Wages" means all cash remuneration payable to a workman, and includes dearness allowance, house rent, conveyance allowance, cost of living allowance, special allowances and any other fixed allowance, but does not include travelling allowance, gratuity or bonus. "

36. It is thus clear that the legislature intended‑to give more benefits to the unskilled workers and for that reason even the meaning and scope of the word "wages" have been extended.

37. From the preceding discussion, it follows that 'wages' have been defined differently in various statutes relating to labour matters keeping in view I the object of each legislation. Therefore, the definition of 'wages' given in one statute cannot be called in aid to interpret the provisions of another statute unless the two statutes are in pari materia or the legislature has expressly provided that the words and expressions defined in one statute shall have the same meaning in the other statute. The word ' wages' has not been defined in the Ordinance. The legislature has also not provided that the 'wages' will have the same meaning as defined in the Act. In these circumstances, the word 'wages' used in Standing Order 12(6) of the Ordinance could not be interpreted with the help of definition of 'wages' as given in the Act. The word 'wages' therefore, has to be interpreted according to its ordinary meaning. In its ordinary sense 'wages' would include all payments made to a workman by his employer on a regular and permanent basis periodically in lieu of his services. As a corollary, therefore, payments made to a workman which are contingent in nature would not form part of the 'wages'. Therefore, in order to determine whether a particular payment received by a workman is part of his wages, it is necessary to ascertain the nature of such payment. The fact that the payment made to a workman is described as an allowance of one kind or the other is not a determinative factor to make such payment or to exclude it from being treated as part of the 'wages'. If a workman is receiving certain payments on a permanent basis, regularly, not dependent upon any contingency or existence or otherwise of certain conditions, then notwithstanding the fact that such payment may be described as an allowance of some kind, will be treated as part of his wages.

38. However, if it can be shown that certain payments made to a workman are dependent on existence of certain contingency or conditions and such payments could be discontinued when the contingency or the condition disappear, the payment cannot be treated as part of the 'wages' of the workman. Therefore, the question whether a particular payment to the workman is part of his wages' or not is to be decided with reference to the facts and evidence in each case.

39. In the case before us, although the appellant contended before the High Court as well as the tribunals below that house rent, conveyance allowance and tea allowance paid to first respondent were not part of his wages, but no evidence was led to show that these payments were in the nature of a contingent payment or were dependent on the existence of certain conditions. Therefore, in the facts and circumstances of the present case, the conclusion of the High Court that the gratuity payable to respondent No. 1 was rightly calculated by the tribunals below on the bass of his salary of Rs.490 per month, did not suffer from any infirmity

40. To next contention of Mr. Abdul Hafeez Pirzada, the learned counsel for the appellant is, that the learned Judge in Chambers failed to notice that the application for recovery of gratuity filed 'by respondent No. 1 was incompetent in view of the proviso to section 7 of the Employees' Cost of Living (Relief) Act, 1973 (Act 1 of 1974). Section 7 of Act I of 1974 as it originally stood was as followings:‑

41. "7. Cost of living allowance [not] to form part of wages.‑ Notwithstanding anything contained in this Act or any other law for the time being in force, the cost of living allowance shall not form part of wages of a worker for the purposes of any other law, including the purposes of contribution to provident fund, gratuity, bonus, social security scheme indexation of wages and calculating wages for over time work:"

42. The above provision excluded the cost of living allowance from being treated as part of the wages of a worker for the purpose of any other law, including the purposes of contribution to provident fund, gratuity, bonus, social security scheme and calculating wages for over‑time. However, by Act XXVI of 1977, the word 'not' in section 7 between the words 'shall' and 'form' was omitted and the following proviso was added to section 7 ibid:

43. "Provided that, for the purposes of the Workman's Compensation Act, 1923 (VIII of 1923) except section 4 thereof, the Payment of Wages Act, 1936 (IV of 1936), the Companies' Profits (Workers' Participation) Act, 1968 (XII of 1968), or the Industrial Relations Ordinance, 1969 (XIII of 1969), the cost of living allowance shall not form part of the wages of a worker. "

44. As a result of amendment of section 7 of Act I of 1974 by Act XXVI of 1977, the cost of living allowance became part of 'wages' for purposes of all laws. However, the newly‑added proviso to section 7 ibid at the same time declared that for the purposes of Workman's Compensation Act, except section 4 thereof, the Payment of Wages Act, the Companies Profits (Workers' Participation) Act, or the Industrial Relations Ordinance, 1965, the cost of living allowance shall not form part of the 'wages' of a worker. The learned counsel for the appellant relying on the proviso to section 7 ibid contended that as the cost of living allowance was not to be treated as part of 'wages' for the purposes of the Act, the application filed by respondent No. I before the Authority under the Act was incompetent. The contention does not appear to be correct. Firstly, the application filed by respondent No. 1 before the Authority under the Act was not for recovery of cost of living allowance as part of wages but it was for recovery of gratuity payable to him. in accordance with the provisions of S.O. 12(6) of the Ordinance. Section 15 of the Act was amended by Ordinance IX of 1977. and as a result of this amendment dues relating to provident funds or gratuity payable under any law were specifically made recoverable under section 15 of the Act. Therefore, proviso to section 7 of the Act I of 1974 did not come in way of the application filed by the first respondent under the Act before the Authority, for recovering of gratuity payable to him under S.O. 12(6) of the Ordinance. Even otherwise, the application for recovery of delayed or withheld payment of cost of living allowance lies before the Authority appointed under section 15(1) of the Act by virtue of section 6(6) of Act I of 1974, in all cases except where recovery relates to an establishment to which the West Pakistan Shops and Establishments Ordinance, 1969 applied. Therefore, it could not be argued that the application filed by respondent No. 1 before the Authority under the Act was incompetent.

45. In view of the above discussion, the appeal fails which is, accordingly, dismissed with costs.

46. M.B.A./Z‑178/S Appeal dismissed.