1993 PLP 630 (PLC)

MAMOON KAZI, J.‑‑‑The petitioners have called in question the demand received from the respondent, dated 16‑5‑1982, requiring them to pay contributions under section 9 of Employees' Old‑Age Benefits Act, 1976 (hereinafter referred to as "the Act") on wages received by their employees including Cost of Living Allowance payable to them under Employees' Cost of Living (Relief) Act, 1973. It may be pointed out that contributions are payable by the employees to the respondent in respect of every such person at the rate of five per cent of his wages. The term "wages" was originally defined by section 2(p) of the Act as follows:‑‑ "2(p). Wages means wages as defined in clause (vi) of section 2 of Payment of Wages Act, 1936 (Act IV of 1936)." The definition of "wages" in section 2(vi) of the Payment of Wages Act is as follows:‑‑ "Section 2(vi).`Wages' means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or otherwise, to a person employed in respect of his employment or of work done in such employment, and includes his bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment, but does not include‑‑ (a) The value of any house accommodation, supply of light, water, medical attendance or other amenity or of any service excluded by general or special order of the (Provincial Government); (b) Any contribution paid by the employer to any pension fund or provident fund; (c) any travelling allowance of the value of travelling concession; (d) Any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (e) Any gratuity payable on discharge." However, by an amendment introduced on 26‑6‑1983, the above definition of wages in section 2(p) of the Act was amended as follows: "(p) `wages' means remuneration for services paid or payable in cash or in kind to an insured person, not being less than the remuneration based on the minimum rates of wages declared under the Minimum Wages Ordinance, 1961 (XXXIX of 1961), without taking account of deductions for any purpose, under a contract of service or apprenticeship, express or implied and shall he deemed to include any dearness allowance or other addition in respect of cost of living, and any payment by the employer to an insured person in respect of any period of authorised leave, illegal lock‑out or legal strike; but does not include‑‑ (i) Any payment for overtime; or (ii) any sum paid to the employee to defray special expenses entailed by the nature of his employment; or (iii) any gratuity payable on discharge; or (iv) any sum paid as bonus; and" As is evident from the above amendment, the effect of the amendment was to expressly include Cost of Living Allowance into the definition of wages by virtue of the deeming clause incorporated in the above definition. Although so far as the liability of the petitioners to pay contributions m accordance with the new definition of "wages" after the said amendment is concerned, no controversy has been raised in respect thereof. However, the main contention of Mr. Obaidur Rahman, learned counsel for the petitioners is that before the said amendment of section 2(p) of the Act, the Cost of Living Allowance was not included in the definition of wages given in the Payment of Wages Act. It may be pointed out in this regard that there is no controversy on the point that the provisions of section 2(vi) of the Payment of Wages Act were incorporated into the Act by reference by virtue of section 2(p) of the Act as it Originally was before the said amendment. Mr. Obaidur Rahman has also referred to section 7 of the Employees' Cost of Living (Relief) Act, 1973, which is also pertinent for resolving the present controversy, which provides as follows:‑ "

7. Cost of living allowance 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 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 and calculating wages for overtime work: Provided that, for the purposes of the Workmen's Compensation Act, 1923 (VIII of 1923), except section 4 thereof, the Payment of Wages Act, 1936 (IV of 1936), the Companies' Profit (Workers' Participation) Act, 1968 (XII of 1968), or the Industrial Relations Ordinance, 1969 (XXIII of 1969)), the cost of living allowance shall not form part of the wages of a worker." As is evident from the definition of wages given in the Payment of Wages Act, "wages" means all remuneration, capable of being expressed in terms of money and it also includes any bonus or other additional remuneration of similar nature or any other sum which would be payable to a person by reason of the termination of his employment. However, the above definition further indicates that certain remunerations, payments or other benefits received by an employee, which are enumerated in clauses (a) to (e) of the said definition, have been expressly excluded from the definition of "wages". If the above definition of "wages" is made the criterion for calculating contributions for the purpose of the Act, then, in our opinion, since there is nothing to indicate that Cost of Living Allowance is to be excluded from the definition of wages given in the Payment of Wages Act, the same would be deemed to be included therein for the purposes of the Act. It is also pertinent to refer to section 7 of the Employees' Cost of Living (Relief) Act, 1973 as it shows that, Cost of Living Allowance shall also form part of wages in certain cases. The said section indicates that "the Cost of Living Allowance shall form part of 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 overtime work". However, the said section excludes certain laws from its purview such as Workmen's Compensation Act the Payment of Wages Act, the Companies' Profits (Workers' Participation) Act, 1968 or the Industrial Relations Ordinance, 1969. But, as is clearly indicated by the said section, no express reference can be found therein to the provisions of the Act. The main contention of Mr. Obaidur Rahman has been that since Payment of Wages Act has been expressly excluded from the purview of section 7, Cost of Living Allowance, therefore, could not form part of "wages" under the Act before amendment of the definition of "wages" therein, because of the reason of incorporation of the definition of "wages" given in the Payment of Wages Act into the Act. In our opinion, the contention has no force because in case of legislation by incorporation or reference, the provisions of the former Act are incorporated into the subsequent Act as if they were re‑enacted therein and reference thereafter to the former Act would not be necessary. Mr. M.A.M. Namazi, learned counsel for the respondent has invited our attention to In re Wood's Estate Ex parte Her Majesty's Commissioners of Works and Buildings, 31 Ch. D. 607, 615, wherein with reference to legislation by incorporation it has been observed thus: "If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act, just as if they had been actually written in it with the pen, or printed in it, and, the moment you have those clauses in the later Act, you had no occasion to refer to the former Act at all". Consequently, although there is no doubt that Cost of Living Allowance cannot form part of wages for the purpose of Payment of Wages Act, 1936, but while applying the above principle, merely because the same definition of "wages" for the purpose of the Act was incorporated therein, the Cost of Living Allowance could not be excluded from the purview of the provisions of the Act. Since the same was also not excluded either expressly or by implication from the definition of "wages" in the Payment of Wages Act which was adopted by the Act, the same could be included in the wages of employees for the purpose of contributions under the Act even before the amendment of the definition of "wages" in the Act. 2r, In view of the above legal position. Mr. Obaidur kahman contended that the case may be remanded for adjudication to the authority under section 33 of the Act as it had proceeded on an erroneous assumption that proceedings instituted earlier before it by the petitioner were time‑barred. However, our attention has been invited to the appellate order passed by the Board of Trustees, Employees' Old‑Age Benefits Institution, which was the Appellate Authority under the Act, whereby the entire case of the petitioner was considered on merits, although no relief could be provided by it to the petitioners on account of the above legal position. In view of the circumstances, since the case of the petitioners has been re‑considered in appeal by the Appellate Authority which exercised jurisdiction under the provisions of the Act; in our opinion, no prejudice has been caused to the petitioner in any case. Therefore, it is not necessary to refer the matter to the Adjudicating Authority for reconsideration. Since no other question has been raised and we are of the view that the petitioners are liable under the law to make contributions as demanded by the respondent. H.B.T./M-1795/K ?????????????????????????????????????????????????????????????????? ??????????? Petition dismissed.