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Petitioner: THE KARACHI STEVEDORES CONFERENCE Ltd. VS Respondent: SIND LABOUR APPELLATE JUDGMENT
Court Name: Sindh High Court Judge(s): Tanzil-ur-Rehman, S. Abdur Rehman Title:THE KARACHI STEVEDORES CONFERENCE Ltd. vs SIND LABOUR APPELLATE
JUDGMENT
Reported As: 1986 PLC 113 Result: Petition dismissed Judgment JUDGMENT TANZIL-UR-REHMAN, J.--This is a Constitutional Petition under Article 199 of the Constitution of Pakistan, 1973 challenging the decision, dated 8th November, 1979 of the Sind Labour Appellate Tribunal, Karachi. 2. The facts leading to this petition, briefly stated, are that the petitioner is the representative body of Stevedores in Karachi. Respondent No. 2 is the Karachi Harbour and Dock Workers Union (hereinafter referred to as the Union) and respondent No. 3 is the Karachi Dock Labour Board (hereinafter referred to as the Board), which is a statutory body established under the Karachi Dock Workers Regulation of Employment Scheme, 1973 entrusted with duties towards regulating of work of Dock Workers with the loading and unloading of vessel. 3. The Union made certain demands to the Board in relation to their work and ultimately or. 13-3- 1974 served a notice of strike on it. The conciliation proceedings started and a settlement was arrived at on 23-6-1974 (hereinafter referred to as 'First Settlement'). The First Settlement, inter alia, provided for an Incentive Scheme in respect of extra work, that any additional tonnage done over and above the standard tonnage, as specified in the said settlement, upto overtime period, will be remunerated at the rate per ton payable during overtime. The Incentive Scheme was applicable during the usual day and night shift work only and was not applied in the event of Dock Worker doing overtime, It was also provided in the said settlement and that it shall be binding for a period of two years commencing from 26-3-1974, on which date the settlement was signed. 4. On the expiry of the said settlement, the Union served another notice of strike on the Board. It was amicably settled and another Settlement was signed on 23rd July, 1976 (hereinafter referred to as
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'the Second Settlement') which was also binding for a period of two years. On expiry of the Second Settlement, an industrial dispute was again raised by the Union which was also settled amicably and a Settlement, dated 3rd December, 1978 was entered into (hereinafter referred to as 'the Third Settlement'). The Third Settlement was to continue for another period of two years. 5. On 25-1-1977, the Employees' Cost of Living (Relief) (Amendment) Act, 1977 was passed which, for the first time, made cost of living allowance as part of wages. The Union demanded from the Board that the cost of living allowance be included in the wages for the purpose of the payment of Incentive Allowance to the workers. The Board, on 28-8-1978 decided to refer the dispute to respondent No. 1, Sind, Labour Appellate Tribunal (hereinafter referred to as 'the Tribunal'). Accordingly, on 23-4-1979 a petition under section 50 of the Industrial Relations Ordinance, 1969 (hereinafter referred to as the I.R.O.) was filed for seeking interpretation of the clause relating to the Incentive Scheme as contained in the First Settlement. On 1-10-1979, the Board moved an application for seeking amendment of the petition and also filed the Second and the Third Settlement alongwith the said application. The said amendment application as well as main petition, in spite of a number of objections raised by the petitioner, were allowed by the learned Tribunal, by its decision, dated 8-11-1979, whereby it was held that the payment in relation to the Incentive Scheme in the Settlement of 1974, as continued in the Settlement of 1976 and 1978 (referred to herein as Second and Third Settlement, respectively), for the extra work done during a normal shift, above the minimum output laid down per shift, required to be made for such extra work at the rate payable for overtime work, which will include the cost of living allowance payable under the Cost of Living (Relief) (Amendment) Act, 1977. Being aggrieved with the said decision, the petitioner has filed the above Constitutional Petition. 6. Mr. Iqbal Kazi, learned counsel for the petitioner raised the following contentions:- (1) The learned Tribunal had no jurisdiction to entertain the petition under section 50 of the I.R.O., 1969, as there was no settlement in writing, in existence on that date. (2) On 86-3-1974 when the settlement was signed, the cost of living allowance did not form part of wages. It cannot, therefore, form part of wages for the purpose of incentive allowance on any subsequent date. (3) The proviso to section 7 of the Cost of Living (Relief) (Amendment) Act of 1977, having excluded the application thereof to the I.R.O., resort to the Tribunal under section 50 of the I.R.O., was not competent. (4) Even if it is assumed that the First Settlement continues to exist and section 7 of Cost of Living (Relief) (Amendment) Act, 1977 is applicable to the case, the remedy was under section 6 of the said Act and not under section 50 of the I.R.O. 7. In support of his first contention, Mr. Iqbal Kazi, submitted that the period of two years was provided for the First Settlement which expired on 25-3-1976 and this settlement was not renewed. The other two settlements though referred to the Incentive Scheme in relation to certain other commodities having been included for purpose of the Incentive Scheme but both the settlements are silent on the quantum of payment to be made to the Dock Workers. Section 2(xxiv) of the I.R.O., requires that settlement must be in writing and signed by the parties. Section 50 requires that there must be a settlement before the jurisdiction of the Tribunal is invoked. Since there was no settlement in writing in existence so a: to invoke the jurisdiction of the Tribunal, it was not competent to entertain the petition under section 50 of the I.R.O., as filed by the respondent No. 2. 8. Mr. Obaidur Rehman learned counsel for respondent No. 2, the union, in reply to the above said contention submitted that under section 40 of the I.R.O., the first settlement still continues to be in force as no notice of termination of the said settlement was served by the petitioner on the respondent. Section 40 reads as under:--
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"Effective date of settlement, award, etc.--(1) A settlement shall become effective - (a) if a date is agreed upon by the parties to the dispute to which it relates, on such date; and (b) if a date is not so agreed upon, on the date on which the memorandum of the settlement is signed by the parties. (2) A settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of one year from the date on which the memorandum of settlement is signed by the parties to the dispute and shall continue to be binding on the parties after the expiry of the aforesaid period until the expiry of two months from the date on which either party informs the other party in writing of its intention no longer to be bound by the settlement. (3) An award given under subsection (1) of section 37 shall, unless an appeal against it is preferred to the Tribunal, become effective on such date and remain effective for such period, not exceeding two years, as may be specified therein. The arbitrator, the Labour Court, or as the case may be the Tribunal, shall specify date from which the award on various demands shall be effective and the limits by which it shall be implemented in each case. Provided that if, at any time before the expiry of the said period any party bound by an award applies to the Labour Court which made the award for reduction of the period on the ground that the circumstances in which the award was made have materially changed, the Labour Court may, by order made after giving to the other party an opportunity of being heard, terminate the said period on a date specified in the order. (4) A decision of the Tribunal in appeal under subsection (3) of section 38 shall be effective from the date of award. (5) Notwithstanding the expiry of the period for which an award is to be effective under subsection (3) the award shall continue to be binding on the parties until the expiry of two months from the date on which either party informs the other party in writing of its intention no longer to be bound by the award." In support of his contention, he placed reliance on Pakistan Tobacco Co. Ltd., Chittagong v. The Chairman, Second Labour Court of East Pakistan and 18 others 1972 PLC 190; Siemens (Pakistan) Employees' Union v. Siemens (Pakistan) Engineering Co., Ltd., and 2 others 1966 PLC 274; Messrs National Embroidery Mills Ltd., v. Punjab Employees Social Security Institution, Lahore and others PLD 1978 Lah. 955 and Province of West Pakistan through the Vice-Chairman, P.W.R., Lahore v. Syed Moharram Ali and others 1970 P SCR 328. 9. In the first named case A Division Bench of Dacca (Pakistan) High Court while interpreting section 40(2) of the I.R.O., observed as under:- "It, therefore, remains to be seen what is the true interpretation of subsection (2) of section 40 of the Industrial Relations Ordinance, 1969. From a reading of the section, it appears that a provision has been made that during the period of settlement which has been agreed upon by the parties it will remain binding on the parties and after the expiry of the period it shall also continue to remain binding on the parties until notice is given by either party to the settlement expressing that intention no longer to be bound by the settlement. The latter clause of section 40(2) of the Ordinance provides that either party can give notice expressing its intention not to be bound by the settlement." 10. In the second name case, there were two settlements arrived at between the parties. The first settlement was arrived at on 12th December, 1959, and the Second Settlement on 14th December, 1962. By the First Settlement the parties had agreed that the employees' would be entitled to full wages and allowances during the period when a workman is absent on account of any injury caused to him during the course of his employment in the respondent-company. Under the Second Settlement, however, this term was modified. Under its term only 40 days' full wages in a calendar year were to be allowed to a workman for work injury. The appellant's contention was that the last settlement came into force on 14th December, 1962 and so the compensation to an employee for work injury from 11th December, 1961 to 30th December, 1962 was not covered by the
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Second Settlement. A learned Single Judge of Karachi Bench of the erstwhile High Court of West Pakistan observed that 'admittedly the terms of the first agreement remained in operation as it was not terminated in terms of section 14(2) of Industrial Dispute Ordinance, 1959 as amended'. It may be mentioned by' us that the provisions of section 14(2) of the Industrial Disputes Ordinance, 1959 are similar to the provisions of section 40(2) of the Industrial Relations Ordinance, 1969. 9. In the, third named case, a learned Single Judge of the Lahore High Court, interpreting section 40 of the I.R.O., observed that 'it may be mentioned here that the position of a settlement for a specified period is not different from the one where no period is agreed upon'. 10. In the fourth named case, the Supreme Court, while interpreting section 14(5) of the Industrial Disputes Ordinance, 1959, which is analogous to the provisions of section 40(5) of 1.R.0., 1969 held that subsection (5) of section 14 makes it abundantly clear, that notwithstanding the expiry of the period of the operation of the award under subsection (3) continues to be binding on the parties until the expiry of two months from the date on which a notice in writing of an intention to terminate the award is given by one of the parties to other party to the award, which in the present case was not as required by the provisions of the Ordinance and consequently the original award continued to be binding. 11. Mr. Iqbal Kazi, on the other hand, first placed his reliance on an unreported decision, dated 27th February, 1968, of the Supreme Court, in Civil Appeals Nos. K-33 and K-34 of 1966, Siemens (Pakistan) Employees' Union v. Siemens (Pakistan) Engineering Co., Limited. The relevant observations, on the interpretation of section 14(2) of the Industrial Disputes Ordinance, 1959, in the said judgment delivered by Hamoodur Rahman, J. (A.R. Cornelius, C.J., S.A. Rahman, Fazlae-Akber and Muhammad Yaqub Ali, JJ. Concurring), disagreeing with the view taken by the High Court that even where the period of subsistence of a settlement is agreed upon between the parties it would continue to be binding on the parties even after the expiry of the said period, until the expiry of two months from the date of a notice in writing of the intention to terminate the settlement, has been given by one of the parties to other party, observed that:- "Upon the wording of the Legislation itself it is manifest that the Legislature was clearly making a distinction between the duration fixed by contract and the duration fixed by statute. In the case of a contract, it is open to the parties to fix as long a period as they like as, indeed, the agreement of 1962 as in the present case done. It is to continue for period of ten years. But where this is not done the Legislature steps in and fixes a minimum duration subject to the right of the parties to determine it thereafter by notice. The Legislature has in doing so acted equally consistently with another well-accepted principle that the right of the employer and employee to regulate their relationship by contract should be interfered with as little as possible. Thus, the law steps in only where the parties have failed to take provision by contract." It was thus held that:- "Upon a plain reading of subsection (2) it appears to me that the intention of the Legislature clearly was to leave the parties to decide by themselves the period during which the settlement should be binding upon them but only where no such period had been fixed the Legislature thought it proper to fix a minimum period of duration for the subsistence of the settlement so that during this minimum period some certainty is established and in the latter event since the Legislature had fixed only a minimum period, it was considered proper that the settlement should continue to be binding even after the expiry of that period until determined by a party unilaterally by the service of a notice. An agreement cannot be altered unilaterally. In the circumstances, I am unable to agree with the interpretation put upon the words of subsection (2) of section 14 of the Industrial Disputes Ordinance, 1959, by the High Court." 13. Mr. Iqbal Kazi, also placed his reliance on several other cases reported as Trading Corporation of Pakistan Ltd.,` Karachi v. Employees' Union 1974 PLC Note 76 at page 42; Workers Union v. The Trans
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Oceanic Steamship Co. Ltd., 1969 PLC 341 and Avalene Silk Mills v. Second Labour Court, Karachi and 7 others 1981 PLC 4. 14. In the first case, named above, Mr. Inamullah Khan, J., who had been Chief Justice of the estwhile High Court of West Pakistan, as a Chairman of Sind Labour Appellate Tribunal, Karachi, agreeing with the submission of the learned counsel appearing in the said case observed that 'where the operation period of the settlement had been fixed by the settlement itself, no notice to determine the same is necessary. It is only in case where no period is fixed by operation of law under section 40 of the Ordinance that it would be necessary, to give a notice by the party who wishes not to be bound by it. 15. In the second named case, Industrial Court of West Pakistan relying on the unreported decision of the Supreme Court, already referred to above, held that the settlement arrived at between the parties lapses automatically after the expiry of the period mentioned therein and that no notice is required for its termination. 16. In the 3rd named case, the parties had entered into a settlement for a period of one year. A learned Single Judge of this Court, as he then was, thus, observed that 'the agreement between petitioners and the workers' union has provided for gratuity to be given to the workers on resignation or in the event of death of any one of them to his heirs, was in force for, only one year from 4-9-1972 to 3-9-1973. Under subsection (2) of section 40 of the Industrial Relations Ordinance, 1969 this settlement was only binding till 3rd September, 1973. 17. The cases cited by Mr. Kazi fully support his contention, whereas the cases relied on by Mr. Obaidur Rahman are either not applicable to the facts of the present case or that the contrary view holds the field. The decision of the Dacca (Pakistan) High Court, 1972 PLC 190 stands overruled by the unreported decision of the Supreme Court of Pakistan in Siemen's case to the extent that it relates to section 40(2) of the Ordinance about mutual settlement fixing a period therein, as in the present case. The judgment reported in Siemens (Pakistan) Employees' Union v. Seimens (Pakistan) Engineering Co., Ltd., 1966 PLC 274 was challenged in appeal in the Supreme Court and was set aside. The decision of a learned Single Judge of Lahore High Court PLD 1978 Lah. 955 also stands overruled by the unreported judgment of the Supreme Court, referred to above, in so far as the observation of the learned Judge relates to the decision on a 'settlement for a specified period'. As regards the judgment of the Supreme Court in Moharram Ali's case 1970 P SCR 328, it is distinguishable as it relates to an award under subsection (5) of section 14 and not to a settlement of the parties fixing a period. It is also pertinent to note that the phraseology used in subsection (5) of section 14 of Industrial Disputes Ordinance, 1959 (corresponding to subsection (5) of section 40 of the I.R.O. Of 1969) is quite similar to subsection (2) of section 40. Subsection (5), provides that 'notwithstanding the expiry of the period for which an award is to be effective under subsection (3), the award shall continue to be binding on the parties until the expiry of two months from the date on which either party informs the other party in writing of its intention no lover to be bound by the award.' 18. Section 40 of the I.R.O. Is a composite section dealing with a number of things, namely, the commencement of settlement subsection (1), termination of settlement subsection (2). Again, the termination of settlement speaks of two situations (i) where the period is fixed by the settlement itself and (ii) where no period is fixed therein. Subsections (3) to (5) deal with the effective date of an award and its expiry Settlement and award belong to two different categories. Settlement is arrived at by free volition of the parties themselves, whereas an award is the decision of a third person imposed on the parties by statute. Subsections (1) and (2) deal with settlement whereas subsections (3) to (5) dealing with an award are entirely different and of no avail to the facts of the present case.
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19. The contention of Mr. Obaidur Rahman that under subsection (2) of section 40 a notice of termination of settlement in both the cases, where a period has been fixed in the settlement or not, will be necessary is entirely misconceived. We are clear in our minds that subsection (2) envisages two different situations. The settlement, if some period has been fixed therein, will come to an end on expiry of the said period, and if it is not so fixed, then it will remain effective for a period of one year from the date of settlement and for a period until the expiry of two months after a notice of termination of the settlement has been given, by either party. It is noticeable that the second part of this subsection mentions the word 'period aforesaid' in the singular and not in the plural. It can only be referred to the statutory period of one year, as mentioned later, as fixed by statute and not a period fixed by the parties themselves as mentioned earlier. Thus, there is a clear indication that the latter provision where a notice of termination has been provided applies only to those cases where no period has been fixed by the parties in the settlement. Subsection (2) of section 40 of the I.R.O. Cannot, therefore, be pressed into service for continuation of the First Settlement in the present case. 20. Faced with this legal position, Mr. Obaidur Rahman took the plea that the First Settlement, on factual plane, was in force. In this respect, he referred to the second settlement wherein the Incentive Scheme was intended to be kept in vogue with a modification that it was extended to several other commodities of the cargo. He also referred to the settlement under Demands Nos. 20, 20-A and 21-C of the Third Settlement which, inter alia, provided that the Incentive Scheme shall be extended to handling different types of palleted cargo and incentive norms as per existing rules which may be fixed by the Karachi Dock Labour Board. It was further agreed that on incentive work double detention will be paid. It was also agreed that when wage has been double due to handling of double wage cargo, if incentive work is also done, the incentive money and overtime wage will be paid at the rate calculated at double wage. Mr. S.S. Sarwana, learned counsel for respondent No. 3, the Board, referred to us the agreed term appearing under the Third Settlement which provided that 'all existing facilities/ benefits will remain effective until amended or changed through agreement'. It was further submitted that the First Settlement continued during the subsistence of the Second and Third Settlement and the Dock Workers were paid regularly. There is no cavil between the learned counsel on either side that the term of agreement with regard to the rate of payment as per First Settlement was acted upon by the petitioner not only under the First Settlement but it continued after the expiry of the period fixed therein, without any objection. A dispute, however, arose after the enforcement of Act XXVI of 1977 which, for the first time, provided that cost of living allowance will form part of wages. The petitioner is, however, paying under protest, the incentive allowance after calculating the wages in terms of section 7 of the said Act, as demanded by the respondent. On the basis of this unchallenged material placed on record, we are of the view that work done by Dock Labour Workers was in accord with the First Settlement, as stood modified by the Second and Third Settlements. The payments made by the petitioners were in pursuance of the said settlements. In the present case, the First Settlement arrived at for a specified period continued to be in force and remained binding upon the parties in the face of the modified terms read with general clause as to the continuity of the existing benefits stipulated in the Third Settlement. It is not, therefore, open to the petitioner to urge that there was no settlement in writing so as to give jurisdiction to the Tribunal to interpret the clause in dispute of the settlement. It is manifest that the payment for the work done undue the Incentive Scheme was made at the rate as agreed in the First Settlement, except as modified by the two subsequent settlements which, in fact, were honoured by the petitioner, as it continued to pay for the work done by the workers at the settled rate, even upto the time the matter was decided by the learned Tribunal and thereafter, the petitioner is paying the Incentive allowance, in accordance with the said decision, of course, under protest.
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21. Mr. Iqbal Kazi, however, contended that the reference was made to the Tribunal to interpret the clause in dispute of the First Settlement of 1974 and not the other two subsequent Settlement. The contention might have some force, had there been no amendment application by respondent No. 3, and the subsequent two settlements were not brought on record. Since the amendment application was allowed by the learned Tribunal and the two subsequent settlements were brought on record the contention has no force. 22. In this view of the matter that the First Settlement of 1974 continued to be effective as modified by the Second and Third Settlement of 1976 and 1978, respectively, the second contention of Mr. Iqbal Kazi is of little significance. We may observe that the incentive allowance under the First Settlement with the Dock Workers was to be remunerated at the rate of per ton payable during overtime. The overtime is normally payable at double the rate of the normal duty hour. It is correct that at the time of entering into the First or the Second Settlement, cost of living allowance was not to be included for the…
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