1978 PLP 87 (PLC)

FAKHRUDDIN G. EBRAHIM, J. The dispute in this appeal relates to the payment of statutory bonus for the calendar year 1972, which is also the financial year of the appellant‑Company, under Standing Order 10‑C of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. This claim by the respondent Union became subject‑matter of an application before the Labour Court under section 34 of the Industrial Relations Ordinance and was resisted on the ground that the company had already paid profit bonus, which represented 24.47 % of the net profits of the company for the year 1972. More particularly, the appellant‑Company relied on a Settlement dated 4‑7‑1372 between the parties following a demand for payment of three months' salary as bonus. The relevant clause of this Settlement dated 4‑7‑1972 reads as follows "It is agreed that the company will pay bonus in accordance with the profit bonus formula as enacted by the company in the past. It is agreed that the disbursement of bonus will be made, as far as possible, in the month in which, bonus has been disbursed in the past and further agreed that those workers who do not complete full bonus year will be paid bonus on pro rata basis provided they are in the service of the company on the day on which bonus is declared."

2. The Labour Court firstly came to the conclusion that from 1951 to 1966 the company paid ex gratia bonus equivalent to one month's salary irrespective of profits, from 1967 to 1970 there was a slight variation when the rate of bonus was increased by half a month, and for the year 1971 it was raised to equivalent of two months' salary. This practice, according to the Labour Court "Turned into usage by virtue of the fact that the respondent (appellant herein) had paid bonus for many years in succession when they had suffered losses." As regards the Settlement itself the Labour Court held that no evidence had been laid by the company to prove that any bonus formula was evolved on profit basis within the knowledge of the workers to discharge that obligation in respect of profit b3nus and a mere phrase inserted in clause 3 of the Settlement did not by itself establish the position that the bonus paid was on the basis of profits and not on custom. This decision of Labour Court was challenged in the writ jurisdiction and the learned Single Judge found it without any merit for the statutory bonus under Standing Order 10‑C was to be paid in addition to any bonus which might have been paid by way of custom or under any Settlement or award, in view of the provisions contained in clause (4) of Standing Order 10‑C which reads as follows: ?

4. Nothing in this section shall be deemed to affect the right of any workman to receive any bonus other than that payable under clause (1) to which he may be entitle d in accordance with the terms of his employment or any usage or any settlement or an award of a Labour Court established under the Industrial Relations Ordinance, 1969 (XXIII of 1969)."

3. Mr. A. A. Shareef, the learned counsel for the appellant‑Company contended that froth 1951 to 1956 bonus was paid to the workers irrespective of profits but from 1957 onwards it was paid only in presence of profits end was increased from one month to If months in the year 1970, and two months in the year 1971 on account of increased profits. He further pointed out that the respondent‑Union was not formed until early 19'2 when they on 10‑4‑1972 submitted a charter of demands, which included the demand for bonus equal of three months pay for tae year 1972. Standing Order 10‑C was added to the Schedule to the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 on 13‑4‑1972 and the Settlement, referred to above relating to bonus for the year 1972 was arrived at on 4‑7‑1972 and bonus was paid in terms thereof. The contention learned counsel was that in coming to the finding that payment of this bonus was by way of custom, the learned Single Judges completely overlooked the Settlement under which bonus for the year 1971 was paid by the Company and received by the workers expressly as a profit bonus. He further went an to argue that, even if it be assumed that the Union was not aware of the profit bonus formula referred to in the Settlement, it nonetheless remained a profit bonus and it is not tae intention of Standing Order 10‑C to give more than one profit bonus in a given year. Now in so fat as respondent‑Union is concerned, their learned counsel Mr. Mohammed Shy Yousufzai contended that bonus for the year 1972 was not profit bonus but in accordance with usage and custom under which the workmen Were entitled to bonus irrespective of profits. His next contention was that the Settlement bonus even if it was profit bonus did not debar the Union from claiming additional statutory profit bonus under Standing Order 10‑C~f?s which proposition he relied on judgment of a learned Single Judge of this Court in Constitution Petition No. 133 of 1976. Lastly, on the basis of Peshawar decision reported in P L D 1976 Pesh. 8, the learned counsel contended that the Settlement bonus was void as it did not conform to the terms and conditions prescribed under Standing Order 10‑C for grant of profit bonus.

4. We had heard this appeal along with the appeal against the judgment of the learned Single Judge in the aforesaid Constitutional Petition No. 13o of 1976, which we have by a separate judgment allowed. The last two contentions of the learned counsel have been therein dealt with by 0 in detail and for the same reasons we find no merit in the same.

5. What remains now to be disposed of is the first connection of the learned counsel for the Union that bonus for the year 1972 was not a profit bonus but a bonus based on usage or custom irrespective of profits T begin with the basis for the bonus in the Settlement itself is profit and it Is therefore, unnecessary to examine any past practice or usage. It was and that Union was not a party to the profit formula referred to in the Settle9o but assuming that to be true it will not detract from the character of bin as a profit bonus. Even as to custom and usage the evidence shows the only for the period 1951 to 1956 bonus was paid ex grartia irrespective profits but since 1967 bonus was always paid to presence of profits and its quantum increased with the increased profits.

6. We are, therefore, of the view that neither the Labour Court nor the learned Single Judge were right in awarding additional profit bonus under Standing Order 10‑C for law contemplates one profit bonus. This appeal therefore, allowed with the result that the impugned order of the Lobo Court is set aside. In the circumstances of the case there will be no order to cost.