1981 PLP 918 (PLC(CS))

"40‑(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. A bare perusal of the above subsection indicates that a settlement is to remain in force for such period as has been agreed upon by the parties and in the absence of such agreement, it has to remain in force for a period of one year from the date it is signed by the parties. The provisions of the corresponding section in the Industrial Dispute Ordinance, 1959, came up for consideration before their Lordships of the Supreme Court in the case of Siemens (Pak.) Employees & Labour Welfare Centre v. Siemens (Pak.) Engineering Co. Civil Appeal No. K‑33 of 1966 and it was observed by Hamoodur Rehman, J. as he then was, as follows:- Upon the wording of legislation itself it is manifest that the Legis lature was clearly making a distinction between the duration fixed by contract and the duration fixed by statute. To the ease of a contract it is open to the parties to fix as long a period as they like as, indeed, the agreement of 1962 has in the present cast done. It is to continue for a 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 there, after 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 make provision by contract."

4. Now as regards the question whether the period of the enforce ment of the settlement has to be specified in the settlement itself or there can be a separate agreement in this behalf between the parties. I am inclined to take the broader view that what the law requires is an agreement between the parties as to the period for the enforcement of the settlement, whether such agreement is provided in the settlement itself or is separately made. Of course, in the case of such period being specified in the settlement, there would ordinarily be no difficulty, but in the case of a separate agreement, such agreement has to be established by tangible evidence.

5. This bring me to a consideration of the issue whether, there was in fact any agreement between the parties as to the period of the enforce ment of the settlement in question. Mr. Mamoon Kazi relied upon two pieces of evidence in support of his contention that there was in fact such agreement. The first piece of evidence relied upon him was the provision of the settlement in respect of demand 15 The said demand and the settlement thereon read as follows :‑ "Demand No. 15 : All workmen will be paid Bonus equivalent to five months wages every year. Settlement : The issue of Bonus for the financial years 1978‑79 and 1979‑80 is left open for settlement on the basis of the Company earning profit during these years and will be settled through peaceful negotiations, as previously "

6. It was argued by Mr. Mamoon Kazi that inasmuch as the settlement referred to the bonus for the financial years 1978‑79 and 1979‑80 the settlement should be enforceable for a period of two years. I regret that I find no force in this contention. All that the settlement in respect of this demand provides is that the issue of bonus for the aforesaid two years was left open. By this settlement, it cannot possibly be inferred that settlement was enforceable for a period of two years. The other piece of evidence relied upon by Mr. Mamoon Kazi was the evidence of Mr. Habibullah Siddiqi, the Managing Director of the appli cant‑Company. In his evidence before this Tribunal, he has stated as, follows :‑ "All through the negotiations there was a talk and understanding for a two‑year settlement. The period for which the settlement is 10 remain valid, however, has not been stated in the settlement itself. The period was not mentioned through inadvertence. This was brought to the notice of the Union later on. The Union, however, wanted to consult their colleagues. The Union ultimately refused to agree on the period of the settlement."

7. Again, I find no positive evidence in this testimony that there was any agreement between parties as to the period for which the settlement was remain in operation. An agreement implies a meeting of the minds which appears to be wholly wanting in the instant case. The essentials for a valid agreement are the making of a proposal and the acceptance thereof by the other party. In the instant case, neither any proposal appears to have been made nor it was accepted by the respon dent‑Union. Can the other hand, after the; execution of the settlement, when the applicant‑Company approached the respondent‑Union for deter mining the period of enforcement of the settlement, the officers of the Union after consulting their colleagues, declined to agree to the proposal of the applicant‑‑company that the settlement be enforced for a period of two years. There is thus no tangible evidence from which it could be inferred that the parties had agreed that the settlement be enforced for a period of two years. In the circumstances, the settlement would be enforceable for a period of one year from the date of its execution, i. e. 21st August, 1979 as provided in subsection (2) of section 40, Industrial Relations Ordinance, 1969.