1993 PLC(CS) 515

DADABHOY CERAMIC INDUSTRIES LTD., KARACHI Versus DADABHOY CERAMICINDUSTRIES LABOUR UNION, KARACHI

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Citation1993 PLC(CS) 515

CourtSindh Labour Appellate Tribunal

Case No.Old Application No. KAR‑335 of 1985

Date1993-02-28

Judge(s)Agha Ali Hyder, Appellate Tribunal

ResultOrder accordingly

DECISION

Succinctly stated, there are 2 applications from M/s. Dadabhoy Ceramic Industries for seeking of interpretation under section 50 of the Industrial Relations Ordinance, 1969. In Application No. 335 of 1985 the prayer was couched in the following terms:‑‑

"It is humbly prayed that this Hon'ble Court be pleased to interpret the provisions of the settlement mentioned above and be pleased to hold that the increase that has been made either by way of increase in the wages and or increase in conveyance allowance were given to the workers due to rise in the cost of living and that these amounts are liable to be set‑off and or adjusted against the increase of 13.5% which is liable to be paid under the Employees' Cost of Living (Relief) (Amendment) Act, 1985 and only difference, if any, it to be paid to the workers."

2. In Application No. KAR‑356 of 1986 the set‑off in regard to the increases in the same clauses of the settlement is sought to be adjusted against the increase allowed on the 26th of June, 1986. The two‑ applications are being dealt with together.

3. It appears that the General Secretary of Dadabhoy Ceramic Industries Limited Labour Union by their letter dated 1‑1‑1985 had served a Notice of Demand under section 26(1) of the Industrial Relations Ordinance, 1969 on their employers, the respondents. There were bilateral negotiations which broke down. Thereupon the union had served the notice of strike on 15‑1‑1985, as a result of which conciliation proceedings were initiated by the Conciliator and ultimately a settlement was arrived at which was signed on the 16th of July, 1985.

4. The Demand No. 2 was in regard to the increase in the wages and the Demand No. 7 was in regard to the conveyance allowance. The settlement in regard to the Demand No. 2 was in the following terms:‑‑

DEMAND NO. 2 INCREASE IN WAGES

"It is agreed between the management and the Union that all the permanent daily‑rated workers in service on the date of signing of this settlement be allowed wage increase w.e.f. 1‑1‑1985 on the following schedule and subject to the following conditions:‑‑

(a) (i) Workers having wage rates up to Rs.15.00 per day @ Rs.2.69 per day.

(ii) Workers having wage rates over Rs.15.00 up to Rs.20.00 per day ..@ Rs.3.31 per day.

(iii) Workers having wage rates over Rs.20.00 up to Rs.25.00 per day .@ Rs.3.86 per day.

(iv) Workers having wage rates over Rs.25.00 up to Rs.30.00 per day..........@ Rs.4.30 per day.

(v) Workers having wage rates over Rs.30.00 up to Rs.35.00 per day @ Rs.5.23 per day.

(vi) Workers having wage rates over Rs.35.00 @ Rs.5.80 per day.

(b) The wage rates mentioned hereinabove shall consist of basic plus C.LA. but does not include last special C.LA. of Rs.40.00 per month.

(c) That in order toy promote good industrial relations between the management and the workers, it is agreed that workers will be paid arrears on account of wage rate difference calculated on actual number of days worked by respective workers including overtime and leave payment from 1‑1‑1985.

(d) Those confirmed in service on and after 1‑1‑1985 till the date of signing of this settlement will be allowed the benefit under clause (1) (a) and (c) above from their respective date of confirmation.

(e) It is further agreed that the permanent daily‑rated workers in service on 1‑1‑1986 will be allowed wage increase w.e.f. 1‑1‑1986 on the same wage classification and terms and conditions on the following schedule:‑‑

(1) Workers having wage rates up to Rs.15.00 per day ..@ Rs.2.75 per day.

(2) Workers having wage rates over Rs.15.00 up to Rs.20.00 per day .@ Rs.3.40 per day.

(3) Workers having wage rates over Rs.20.00 up to Rs.25.00 per day .@ Rs.4.00 per day.

(4) Workers having wage rates over Rs.25.00 up to Rs.30.00 per day .@ Rs.5.30 per day.

(5) Workers having wage rates over Rs.30.00 up to Rs.35.00 per day @ Rs.5.30 per day.

(6) Workers having wage rates over Rs.35.00 @ Rs.6.25 per day."

5. The settlement in regard to the Conveyance Allowance was as follows:‑

DEMAND NO. 7 CONVEYANCE ALLOWANCE

"The management has agreed to allow increase in conveyance allowance by Re.0.50 per day attended w.e.f. 1‑1‑1985 to all the permanent daily‑rated workers in service on the date of signing of this settlement."

6. Admittedly the Charter of Demands has not a word to say that the same were on account of the rise in the Cost of Living. Nor is there anything that way in the Memorandum of Settlement itself. The question that falls for consideration is as to whether the increases on the two counts in the settlement will be subject to adjustment under the proviso to subsection (6) of the Cost of Living (Relief) Act.

7. Mr. Riaz Hussain Baloch for the applicant and Mr. Ali Amjad for the respondent in support of their arguments had referred among others to the following authorities namely: Borroughs Wellcome (Pak.) Limited Employees' Union v. Borroughs Wellcome (Pak.) Limited 1982 PLC page 868; Employees' Union v. M /s. New Jubilee Insurance Company Limited 1981 PLC 705; Elite Textile Mills Ltd. v. Workers' Union 1974 PLC 240; Prince Glass Works Limited v. Workers' Welfare Union 1982 PLC 984; Cynamide (Pak.) Employees' Union v. Sindh Labour Appellate tribunal 1989 PLC 482; R.B. Industries v. Employees' Welfare Union PLD 1983 SC 15.

8. The guideline for the resolution of this problem has been laid down in the Supreme Court's case R.B. Industries Ltd. v. Employees' Welfare Union referred to above. It has been observed therein that text of the demand and the settlement and the surrounding circumstances should be scrutinised, to reach the conclusion whether the rise in the wages and allowances was given by way of relief to face the amounting cost of living? It went on to say that "if after taking the considerations of these factors, the conclusion is reached by the authority concerned that the increases were really given to provide such relief, then case would squarely fall within the ambit of the proviso and the financial benefits granted under the settlement should be adjustable against the additional Cost of Living Allowance granted by the Amendment Act."

9. Muhammad Yusuf, the Secretary of the Union has produced copies of some settlements arrived at between the parties. These pertain to the years 1976 to 1983. The short recital of the settlement in 1976 was in the following words:‑‑

"The General Secretary, Dadabhoy Ceramic Industries Labour Union, the Collective Bargaining Agent within the meaning of section 22 of I.R.O. 1969, vide his letter dated 1‑1‑1976 raised demands of the workers under section 26(1) of I.R.O., 1969. The management in the larger interests of good industrial relations resumed bilateral negotiations with the Union. Series of meetings were held and as a result of goodwill and understanding shown by both the parties the following settlement has been concluded."

10. As for the demand in regard to the wages, audit was increased by 12%. The recital in 1977 remains as before the increase in the wages is 15% and the Conveyance Allowance is increased to 80 paisa per day. The increase in 1978 was 11% + C.LA. It is in the following terms:‑‑

"(2) WAGES INCREASE:

That the management has agreed to allow wage increase to all the permanent daily‑rated workers in service on 30‑1‑1978 at the rate of 11% (eleven per cent.) of their respective wages (basic + C.LA.) w.e.f.1‑1‑1978."

11. In 1979 the recital shows that the industry had suffered heavy losses, but in spite of this, there was an increase of wages by 12% + C.L.A. It is as follows:‑‑

"(4) DEMAND NO. 4: WAGE INCREASE

That the management has agreed to allow wage increase to all permanent daily‑rated workers in service on 31‑1‑1979 at the rate of 12 (twelve) per cent. of their respective wages (basic + CIA) excluding all other allowances with effect from 1st January, 1979."

12. The settlement in regard to the year 1980 shows that in spite of losses the increase in the wages was 14% + C.LA. and the Conveyance Allowance was increased to 1.40 per day for the year 1981, the Conveyance Allowance was increased from Rs.1.40 to Rs.1.50 daily.

13. In the year F1982 the settlement in regard to the wages was as follows:‑‑

(a) (i) Workers having wage rate up to Rs.15.16 per day ..@ Rs.2.11 per day.

(ii) Workers having wage rate over Rs.15.16 up to Rs.21.22 per day @ Rs.2.77 per day.

(iii) Workers having wage rate over Rs.21.22 up to Rs.26.27 per day............ @ Rs.3.27 per day.

(iv) Workers having wage rate over Rs.26.27 up to Rs.32.33 per day..........@ Rs.3.85 per day.

(v) Workers having wage rate over Rs.32.33 up to Rs.44.00 per day .@ Rs.4.61 per day.

(b) The wage rate mentioned hereinabove shall consist of basic plus C.LA. but does not include last special C.LA. of Rs.40.00 per month.

(c) That in order to promote good industrial relations between the management and the workers, it is agreed that workers will be paid arrears on account of wage rate difference calculated on actual number of days worked by respective workers including overtime and leave payment from 1‑1‑1982.

(d) Those confirmed in service on and after 1‑1‑1982 till the date of signing of this settlement will be allowed the benefit under clause (1)(a) and (c) above from their respective date of confirmation.

14. For the year 1983 the increase of wages was as follows:‑‑

"DEMAND NO.1 INCREASE IN WA ES

It is agreed between the management and the Union that all the permanent daily‑rated workers in service on the date of signing of‑this‑ settlement be allowed wage increase w.e.f. 1‑1‑1983 on the following schedule and subject to the following conditions:‑

(a) (i) Workers having wage rates up to Rs.15.00 per day @ Rs.2.40 per day.

(ii) Workers having wage rates over Rs.15.o0 up to Rs.20.o0 per day @ Rs.2.97 per day.

(iii) Workers having wage rates over Rs.20.00 up to Rs.25.00 per day @ Rs.3.43 per day.

(iv) Workers having wage rate over Rs.25.o0 up to Rs.30.00 per day @ Rs.4.10 per day.

(v) Workers having wage rates over Rs.30.00 up to Rs.35.00 per day @ Rs.4.83 per day.

(vi) Workers having wage rates over Rs.35.00 .@ Rs.5.25 per day.

(b) The wage rate mentioned hereinabove shall consist of basic plus C.LA. but does not include last special C.LA. of Rs.40.00 per month.

(c) That in order to promote good industrial relations between the management and the workers, it is agreed that workers will be paid arrears on account of wage rate difference calculated on actual number days worked by respective workers including overtime and leave payment from 1‑1‑1983.

(d) These confirmed in service on and after 1‑1‑1983 till the date of signing of this settlement will be allowed the benefit under clause (1)(a) and (c) above from their respective date of confirmation.

(e) It is further agreed that the permanent daily‑rated workers in service on 1‑1‑1984 will be allowed wage increase w.e.f. 1‑1‑1984 on the same wage classification and terms and conditions on the following schedule:‑‑

(1) Workers having wage rates up to Rs.15.00 per day .@ Rs.6.65 per day.

(2) Workers having wage rates over Rs.15.00 up to Rs.20.00 per day .@ Rs.3.25 per day.

(3) Workers having wage rates over Rs.20.00 up to Rs.25.00 per day @ Rs.3.75 per day.

(4) Workers having wage rates over Rs.25.00 up to Rs.30.00 per day ..@ Rs.4.25 per day.

(5) Workers having wage rates over Rs.30.00 up to Rs.35.00 per day ..@ Rs.5.20 per day.

(6) Workers having wage rates over Rs.35.00 ..@ Rs.5.75 per day.

14‑A. And as for the conveyance there was an increase of 1.25 paisas w.e.f. 1‑1‑1983.

15. In regard to the year 1985 the increase in wages was as follows:‑‑

"DEMAND NO. 2 INCREASE IN WAGES

It is agreed between the management and the Union that all the permanent daily‑rated workers in service on the date of signing of this settlement be allowed wage increase w.e.f. 1‑1‑1985 on the following schedule and subject to the following conditions:‑‑

(a) (i) Workers having wage rate up to Rs.15.00 per day ..@ Rs.2.69 per day.

(ii) Workers having wage rates over Rs.15.00 up to Rs.20.00 per day .@ Rs.3.31 per day.

(iii) Workers having wage rates over Rs.20.00 up to Rs.25.00 per day .@ Rs.3.86 per day.

(iv) Workers having wage rates over Rs.25.00 up toRs.35.00 per day @ Rs.4.30 per day.

(v) Workers having wage rates over Rs.30.00 up to Rs.35.00 per day @ Rs.5.23 per day.

(vi) Workers having wage rates over Rs.35.00 .@ Rs.5.80 per day.

(b) The wage rates mentioned hereinabove shall consist of basic plus C.LA. but does not include last special C.L.A. of Rs.40.00 per month.

(d) Those confirmed in service on and after 1‑1‑1985 till the date of signing of this settlement will be allowed the benefit under clause (1)(a) and (c) above from their respective date of confirmation.

(1) Workers having wage rate up to Rs.15.00 per day .@ Rs.2.75 per day.

(2) Workers having wage rates over Rs.15.00 up to Rs.20.00 per day @ Rs3.40 per day.

(3) Workers having wage rates over Rs.20.00 up to Rs.25.00 per day @ Rs.4.00 per day.

(4) Workers having wage rates over Rs.25.00 up to Rs.30.00 per day ..@ Rs.4.40 per day.

(5) Workers having wage rates over Rs.30.00 up to Rs.35.00 per day @ Rs.5.30 per day.

(6) Workers having wage rates over Rs.35.00 ..@ Rs.6.25 per day."

16. There is also an affidavit which has been filed by Shakir Ibrahim Dadabhoy who is a Director of the Company. After mentioning that the increase in the wages in the settlement in dispute was not byway of normal annual increment, but was an increase "given to provide cushion to the workers due to rise in the Cost of Living:" it has the following to say in paras.10 and 11 of the aforesaid Affidavit in Rejoinder:‑‑

"10. That in the earlier memorandum of settlement that was concluded between the management and Union, increase in the wages was not given due to the rise in the Cost of Living but in view of the fact that the workers at their own had claimed that their wages were less than other comparable concerns and the managements on their part had ascertained this from other comparable concerns and it is for this reason, the management had increased the wages of the workers earlier and had not effected set‑off in the Cost of Living Allowance.

11. That the reference to Exh. R/3 made by Muhammad Yusuf, General Secretary of the Union is again out of context and is misleading. Without prejudice to the above, reference to Exh. R/3, it will be revealed that the increase in the wages given under the settlements dated 21‑1‑1976, 26‑1‑1977, 23‑2‑1978, 31‑1‑1979, 13‑2‑1980 and 31‑3‑1981 was not on uniform basis but varying from year to year. This further goes to show that variation was in view of the fact that the management earlier was trying to fill up the gap between their wages and the wages of other comparable concerns."

17. The settlement and this counter‑affidavit read in juxtaposition, clearly make out that the increase was not to meet the rise in Cost of Living but was in line with the pattern of increase in the wage structure and allowances, a system which was prevalent in this company for a number of years.

18. I am therefore of the opinion that increase in the Cost of Living Allowances is not to be adjusted in the wages and the Conveyance Allowance under clauses 2 and 7 of the settlement referred to earlier.

H.B.T./2167/Lb.S Order accordingly.