1999 PLP 250 (PLC)

(vii) District Manager Karachi Transport Corporation v. Ghulam Younas and another (1992 PLC 761); It is a case decided by the Supreme Court of India wherein the age of superannuation was fixed by the management unilaterally. It was held as not applicable to workmen who had joined the service at a time when there was no age limit.

6. Having considered the case‑law cited by the learned counsel for the parties, as referred to above, there should be no cavil on the point that the unilateral act of the employer in finding certain age of retirement when there is no previous fixation of the age of retirement either by mutual settlement or Award, will not bind the workmen employed prior to unilateral fixation of the age of retirement by the employer. It may, however, be valid and binding on the workmen joining the service of employer subsequent to the fixation of age of retirement by the employer.

7. Reverting to the facts of the present appeals, it seems advantageous to reproduce para. 11 of the Agreement which is relevant to the point at issue:‑‑

11. RETIREMENT: (a) It is agreed that all such workers who, at the time of employment did not give a specific date of birth and only mentioned the year of birth, shall be retired from Company employment on 30th June of the year of retirement. It is agreed that for the purpose of determining retirement age, the date of birth recorded at the time of commencing employment shall be taken to be conclusive and final. However, such employees who were to be retired in 1983 shall be retired by 31st August, 1983. (b) Workers will be retired from Company employment when they complete the age of 60 years or have completed 40 years of employment which ever is earlier."

8. As to the binding effect of the Agreement quoted above, section 39 has been rightly relied upon by the learned counsel for the appellant to support his contention that the said Agreement will be binding on all workmen including the respondent. The provisions of law reads under:‑‑ "(39) Settlement and awards on whom binding.‑‑‑(1) A settlement arrived at in the course a conciliation proceedings or otherwise between the employer and the collective bargaining agent yr any award of arbitrator published under section 31, or an award or decision of a Labour Court delivered under section 37 or the decision of a Tribunal under section 38. (a) be binding on all parties to the industrial dispute. (b) be binding on all parties summoned to appear in any proceeding before a Labour Court as parties to the industrial dispute, unless the Court specifically otherwise directs in respect of any such party. (c) be binding on the heirs, successors or assignees of the employer in respect of the establishment to which the industrial dispute relates where an employer is one of the parties to that dispute, and (d) where a collective bargaining agent is one of the parties to the dispute, be binding on all workmen who were employed in the establishment or industry to which the dispute first arose or who are employed therein after that date;"

9. In view of the legal position, as stated above, the contention as advanced by the learned counsel for the respondent that retrospective effect cannot be given to the agreement so as to affect the rights of the respondents is fallacious, untenable in law and stands repelled. Now to decide the question of the enforcibility of clause (11) of the Agreement/settlement for retiring the respondents as it already stood expired, remains to be considered. Dealing with the question, besides the case‑law cited at the Bar, reliance may be placed 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 (as referred to in 1986 PLC 113) on the interpretation of section 14(2) of the industrial Disputes Ordinance, 1959, (analogous to subsection (2) 'of section 40 of I.R.O.) rendered by Hamoodur Rehman, J. (A.R. Cornelius, C.J. S.A. Rahman, Fazl‑e‑Akbar 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. Rut where this is not done the Legislature steps in and fixes a minimum duration subject to the right of the parties to determine thereafter by notice. The Legislature had 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 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, 1 am unable to agree with the interpretations put upon the words of subsection (2) of section 14 of the Industrial Dispute Ordinance, 1959, by the High Court."

10. Reliance may also be placed on several other cases reported as (i) Trading Corporation of Pakistan Ltd., Karachi v. Employees Union 1974 PLC Note 76 at page 42; (ii) Workers Union v. The Trans Occeanic Steamship Co. Ltd. (1969 PLC 341) and (iii) Avalene Silk Mills v. Second Labour Court Karachi and 7 others 1981 PLC 4. (i) In the first case; named above, Mr. Inamullah Khan, J., who had been Chief Justice of the erstwhile High Court of West Pakistan, as a Chairman of Sindh 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 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. (ii) In the second named case. Industrial Court 9f 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. (iii) In the third 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.

11. 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. Siemens (Pakistan) Engineering Co. Ltd., 1966 PLC 274 was challenged in appeal in the Supreme Court and was set aside by the aforesaid unreported judgment of the Supreme Court supra as referred to the 1986 PLC 113.

12. Here, the provisions of section 40(2) of I.R.O. 1969, as relied on by learned counsel for respondents seems to be relevant to the instant case. In order to appreciate its interpretation, the whole section 40 is reproduced below; (40) Effective date of settlement, award, etc.‑‑(1) 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 dates from which the award on various demands shall be effective and the time limit 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 said 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. "

13. It is thus 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 section (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 more to be bound by the award. It may further be stated that 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) dealt 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.

14. And lastly I may now make a mention of a D.B. Judgment of the High Court of Sindh rendered by Tanzilur Rehman, J. (as he then was) reported as the Karachi Stevedores Conference Ltd. v. Sindh Labour Appellate Tribunal Karachi and 2 others (1986 PLC 113), for holding the view that a settlement, if period has been fixed therein, would come to an end on expiry of the said period.

15. I am therefore, of the firm view that the Agreement arrived at by and between the parties i.e. the appellant company and C.B.A. of its employees union on 2‑8‑1983 was no more in force on the expiry of the period of 2 years fixed therein. As a result thereof clause 11 of the Agreement relating to retirement was no more available .to the appellant company and, therefore, the action of the appellant ins retiring the respondents herein, was not in accordance with law, discussed above.

16. In result, the decision of the learned Labour Court No.III impugned in the above appeals is maintained. The appeals are consequently dismissed.

17. Before parting with the matter, I would like to add that the Government concerned may considered the advisability of initiating legislation to provide a fixed age of retirement, say, sixty years, of the workers/workmen of an Industrial/Commercial establishment/undertaking. In this respect, a proviso may be added in Standing Order No.12 of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968, which relates to termination of employment, as retirement in a sense is termination of employment. The above amendment is aimed at to bring uniformity and certainty in the matter. It will also curtail litigation. Let a copy of this judgment be sent to the Governor of Sindh, as the Governor's rule is currently in force in the Province.' H.B.T./248/Lb.S????????????????????????????????????????????????????????????????????? ??????????? Appeal dismissed.