1976 PLP 439 (PLC)

"(a) those members of the staff still in the service of the Bank on 31st December each year, (b) those members of the staff, who had retired on pension during the year, on pro rata basis, (c) the representatives of those members of the staff, who have died during the year, on pro rata basis, (d) The Bank may, however, at its discretion, make payment of interim bonus in June each year, subject to the condition that the amount of any such interim bonus will be deducted from the final bonus payable at the end of the year, (e) It is agreed that tonus payable in terms of this agreement will be off-set against, or liquidate any bonus which might be payable in the future under any enactment, present or future."

2. According to clause 32, the settlement was to be effective for a period of three years and, even after its expiry, until the expiry of two months from the date on which either party thereto informed the other in writing, of its intention not to be bound by the settlement. It was further agreed that, during the subsistence of the settlement, the respondent No. 2 would not raise any demand having financial implications, or any of the demands expressly settled, withdrawn, or dropped down.

3. It is alleged that notwithstanding this settlement, on the 22nd of November 1972, the petitioner received a letter from the General Secre tary of the respondent No. 2 that, in view of the announcement of the Government in regard to the payment of bonus, gratuity, etc., a readjust ment of the financial claims settled in the agreement, referred to earlier, was called for. It was replied to by the petitioner by letter dated 24th Nove mber 1972, and any further claims were repudiated. The respondent No. 2, thereafter, filed an application under section 34 of the Industrial Relations Ordinance, 1969, before the Sind Labour Court, with a prayer that the petitioner-Bank be directed to make payment of additional statutory bonus to the workers as enjoined under clause 10 (c) of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (hereinafter called the Ordinance). The application was resisted mainly on the ground of the terms of settlement detailed earlier. The Labour Court, by its order dated 12-3-1973, however, held that the terms of the settlement, which was a non-profit bonus, did not bar a further payment of bonus under the Ordinance.

4. The petitioner filed an appeal before the Sind Appellate Tribunal under section 37 (3) of the Industrial Relations Ordinance, in which even the maintainability of the application under section 34 of the Industrial Relations Ordinance was assailed. The aforesaid appellate Tribunal allowed the appeal by its order-dated 2-5-1973. Thereupon, the respondent No. 2 filed a constitutional petition before this Court. However, before the matter could finally be decided, this petition was filed, as earlier, in the case of Muhammad Aqeel v. Sired Labour Appellate Tribunal and another (1974 P L C 194), a Division Bench of this Court had held that the Sind Labour Appellate Tribunal was not competent to hear appeals against the orders of a Labour Court passed under section 34 of the Industrial Relations Ordinance, 1969. In this very context, it might be mentioned that the petition filed by the respondent No. 2 seas decided by a Division Bench of this Court by its order dated 27-5-1975, holding that the order passed in appeal by the Tribu nal was coram non judice inasmuch as the said Tribunal had no jurisdiction to hear the appeal.

5. It appears that a number of demands had been raised by the respondent-Union by their letter dated 4-3-1971, and, after quite a protracted dialogue between the parties, a settlement had been reached on the 26th of August, 1971. The clauses dealing with the question of bonus have been reproduced earlier. It was to be an "annual cash profit bonus" at the rate of eighteen per cent. of actual basic salaries drawn at the end of tl:e year, but the same was to be off-set against, or, liquidate any bonus, "which might be payable in future under any enactment, present or future." Off-set-(the more formal form of the word is set-off)-as defined in Black's Law Dictionary, means a deduction, a counter-claim, a contrary claim or demand, by which a given claim may be lessened, or, cancelled. Demons trably, during the subsistence of the settlement, the bonus was payable to the employees, irrespective of the fact whether there was any profit or loss. May be, the petitioners thought that even, when the entire world was out of joint, and riddled with recession and uncertainty, all the roads of the industrial and commercial world still led to the banks, and no harm could reach them. Any way, the fact remains that, if they incurred any losses in any year, their obligation continued. The other feature, which cannot escape notice, is that, even in case of profit, there was no ratio of bonus to the profit. Mr. Hassan A. Shaikh, learned counsel for the respon dent No. 2, therefore urged that the bonus, though dubbed a profit bonus was just a term of the workers employment by way of deferred wages, as an incentive for better performance on the part of the staff, a tardy reali zation to improve their living conditions, or even to buy peace. In that context, he referred to certain passages from Messrs Khyber Tobacco Co. Ltd. Mardan v. Labour Union arid another (P L D 1976 Pesh. 8) and some other citations to be found therein. Reference was also made to Shafiq Textile Mills Ltd. v. Shafiq Textile Mazdoor Union (1975 P L C 559) and Wazir Ali Industries Employees' Union v. Wazir Ali Industries, Hyderabad (1975 P L C 728).

6. In the case of Shafiq Textile Mills Ltd., a settlement was carrived at, according to which, the employees were to get bonus at the rate shown in the settlement irrespective of gain or loss, or the one prescribed under the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, whichever of the above two was higher. The Company, however, repudiated the claim on the ground that the demand was premature, as the accounts had not been audited, and, otherwise too, there was no profit in hand to distribute. The answer of the learned Chair man of the Appellate Tribunal to the reference was that the bonus was not linked with the profit and had to be paid under clause 1 (a) of the settlement, despite the loss claimed.

7. In Messrs Khyber Tobacco Co. Ltd. the company had given bonus in January 1968 at the rate of 124 per cent. of the employees' wages during the year 19.,

7. The same practice was continued in 1968 and 1969. Then, there was a settlement in January 1971, and the workers were to be paid annual bonus equal to their two months' pay for the calendar years 1970, 1971 and 1972. (There was a ratification of the settlement in January 1972). This agreement was to last until the end of December, 1972. But, in October 1972, the Union served a notice on the Company termina ting the said agreement. This led to a fresh agreement in January 1973, by which the earlier agreement was superseded, and the Company agreed to pay to its workers for calendar year 1972 73, bonus at the rate of 2J months, their basic pay, in lieu of the bonus prescribed in Standing order 10 (c) (1) of the Ordinance. This agreement was to be valid till about the end of 1975. But, in September 1974, the Union repudiated the agree ment and claimed a further bonus under Standing Order 10 (c) (1) of the Ordinance. The contention was that, as the terms of the settlement were more favourable to the workers, clause (1) of Standing Order 10 (c) would be deemed to have been modified under section 4 of the Ordinance. However it was observed that the terms were not more favourable, and further that the bonus under settlement, which, as before, was annual and free from the consideration of the Company making profit, or, incurring losses. It had therefore become a part of the wages in addition to the statutory bonus under Standing Order 10 (c) (1). It was further held that the workers being already entitled to annual bonuses under the agreement of January 1971, the Company could not be said to have offered any additional consideration to the workers for the agreement of 8-1-1970. Besides, the latter agreement being in conflict with the provisions of Stan ding order 10 (c) would not debar the workers from claiming statutory bonus, as estoppel could not be pleaded against a statute. Then notice was taken of some decisions and the same were distinguished on the ground that, in all those cases it was found as a fact, that employers had paid to their workers only profit bonus, while in the case in question, the Com pany had paid to the workers only annual bonuses, which had nothing to do with the making of profits, or incurring losses.

8. In Wazirali Industries, rule was enunciated that any settlement in violation of law could not have any bindings force, and that the Union was to make, if it so desired, an application under section 34 of the Indus trial Relations Ordinance to determine the amount of profit in terms of Standing Order 10 (c).

9. In the instant case, th., settlement was reached in August, 1971.It mentioned that the bonus to be given was a profit bonus. It is a different e matter that, nothwithstanding such a mention, it can pass only as a bonus under a settlement. But this was subject to a condition. The condition was that it will be offset against, or liquidate any bonus, which might be payable in future under any enactment, present or future. It was not in conflict with either section 3, 4 or 9 of the Ordinance, or any other enact ment at its inception. It could not liquidate any future enactment, but it had taken care to say that the bonus would be offset against any other bonus in future. The settlement would not be void as it cannot be said that the consideration and objects were unlawful in part. Neither any opting out or contracting out of any protection was involved. The acceptance of the grant of the bonus at the rate of eighteen par cent of their salary, and the promise to have it offset against any bonus under any enactment at any time in future, about which nothing could be said for certain, would not be a consideration or object forbidden by law, because Standing Order 10 (c) was introduced after more than six months. It was also not fraudulent, or of such a nature that it would defeat the provisions of any law. As held in Printing & Numerical Registering Co. v. Sampson (1875) 18 Eq. 462) " . . . . if there is one thing which more than another public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by Court of justice." In Richardson v. Melliah (2 Bing. 294). Borrough, J., while dealing with the question of public policy, observed that "it is a very unruly horse and when once you get astride it, you never know where it will carry you. It may lead you from the sound law." In Janson v. Driefontein Consolidated Mines Ltd. (1902 A C 484) Earl of Halsbury observed : "I do not think that the phrase "against public policy" is one which in a Court of law explains itself. It does not leave at large to find that a particular contract is against public policy . . . . . . but I deny that any Court can invent a new head of public policy." In the course of the same judgment, Lord Davey went on to say that "public policy is always an unsafe and treacherous ground for legal decisions," and Lord Lindlay added that "public policy is a very unstable and dangerous foundation on which to build until made safe by decisions." Observations to the same effect were also made in Vassumal Dyaldass v. Hiromal (I L R 1946 Kar. 380) and Kalapard Kenkatareddi v. K. P. Venkatachelam (1964 A P 465). Mr. Fazal Ghani Khan, learned counsel for the petitioner, also referred to Messrs Kohinoor Chemical Co. Ltd. v. Work men's Union (1975 P L C 717). London Assurance v. Employee's Union (1975 P L C 250) and Inter national General Insurance Co. of Pakistan Ltd. v. I. G.

1. Staff Union (1975 P L C 564) but they will not be strictly relevant from the angle being examined.

10. The respondent's right under Standing Order 10 (c) remains unaffec ted by the settlement and it was stated at the Bar and was not denied by the respondents, that, in cases of some employees where the bonus under the settlement had fallen short to what was due under the Ordinance, the deficiency had been made good. The only question remains, as to whether the workers are also entitled to the bonus under the settlement, in addition to the bonus under Standing Order 10 (c). I am of the opinion that, in view of the express covenant entered into by the parties, the petitioners are absolved from meeting the same. You cannot own and clutch only what suits you and disown what does not. It must be accepted as a whole, B the good part and the bad part together. The settlements, as held in a number of cases by the Supreme Court, and in this Court, have got a sanc tity of their own and must be implemented as such. Read in its entirety it ceases to have any effect, subject to what has been said earlier, from the day the bonus became payable under Standing Order 10 (c).

11. It was also contended by Mr. Fazal Ghani Khan learned counsel for the petitioner, that the application under section 34 of the Ordinance was not competent. We may not refer to the judgment by the Appellate Tribunal, as it was coram non judice, but the same point was also taken in the earlier petition filed by the respondent. Evidently, the point had not prevailed therein, nor can I say that there is any substance in it.

12. Mr. Hassan A. Shaikh also urged, faintly thought, that the peti tion suffered from laches. As could be seen, this petition had been filed, even before a decision in the write petition filed by the respondent No. 2, once a Division Bench of this Court had pronounced that the Labour Appellate Tribunal was not competent to hear appeals from decisions of the Labour Courts under section 34 of the Industrial Relations Ordinance. I have not been therefore impressed by this submission.

13. In the result, the order passed by the Labour Court, in the circumstances referred to earlier, cannot be said to be in the exercise of its lawful authority and is, therefore, quashed. There will, however, be no order as to costs, Petiton accepted.