1985 PLP 459 (PLC)

In this regard the respondent‑Union has submitted that the evidence which has come on record clearly shows that the so‑called demands of the Company were never communicated in writing to the collective bargaining agent and it cannot be said that in the absence of any such communication any dispute exists which needs to be decided by this authority. It is further contended that the facilities and benefits which are sought to be taken away/or reduced by the company are being enjoyed by the workmen for a long number of years ranging from 10 to

17. It is also contended that no justification has been shown for taking away these benefits and facilities from the workers. It is further submitted that the Company has not shown how these benefits, which are in operation for such a long period have assumed all of a sudden the character of an unbearable financial burden having any adverse effect on the operation of the Company. The allegations by the Company that these benefits and facilities are being misused by the Workers have been denied by the respondent‑Union. It is also contended that these facilities and benefits have become parts of the terms and conditions of the contract of service.

3. It is admitted by the Company that these demands relating to supply of Kerosene oil, safety shoes, etc. are available to the workers through various settlements. It is also not denied that these facilities and benefits have become part of terms and conditions of workmen employed in the Company. It may also be mentioned that these facilities which were obtained through settlements were voluntarily signed by the management and unless very strong cogent reasons are shown by the Company these facilities and benefits which have become part of the terms and conditions of employment of the workmen cannot be taken away or curtailed. It is not the case of the Company that they want to reduce, curtail or substitute these demands as economic measures or to get financial relief. It is also not the case of the Company that it does not have the rapacity to meet the expenditure incurred on these benefits and facilities. It is also clear from the pleadings of the parties that these demands were not communicated to the respondent‑Union through a notice. They were for the first time raised by the Company during negotiations that took place on the demands raised by the respondent‑Union. In this regard it may further be stated that no doubt, the Pakistan Essential Services (Maintenance), Act, overrides the provisions of the Industrial Relations Ordinance, 1969 and the management is competent to apply for regulation of the terms anti conditions of the employment of the workers under section 6 of the said Act but these demands could have been raised through an industrial dispute under subsection (1) of section 26 of the Industrial Relations Ordinance, 1969 as raising of the Industrial Dispute through a Demand Notice under subsection (1) of section 26 does not come into conflict with the provisions of the Pakistan Essential Services (Maintenance), Act, 1952. There is therefore much force in the contention of thel" Union that these demands have been raised as a counterblast to demands raised by the respondent‑Union. No cogent justification has been shown by the management for denying these facilities which the workers are receiving under voluntary settlements. There is only the Affidavit of S.K. Muinud Din, Management Executive (Industrial Relations) of the Company to the effect that these facilities are being misused by the workers. No other evidence has been produced to prove this allegation. and no instance or concrete proof has been placed on record to show that these facilities are being misused by the workers. In fact even if it is proved that the workers are receiving monetary gain out of these facilities, they have a legitimate right to do so. Once the kerosine oil, safety shoes, uniform or jerseys are issued to the workers, it become their property and they have a right to use it in any manner they like. I, therefore, find no justification for accepting these demands.

4. As regards the demand No. 8 relating to Card Punching, it has been stated that the clerical staff do not punch the cards at the time of entering in or going out from their work place either within or outside the refinery. It is requested that clerical staff should be directed to punch their cards to record the actual timings of arrival and departure. This demand has not been seriously resisted by the Union. It is merely contended by the Union that this demand does not constitute an Industrial Dispute. Agreeing with the contention of the Company, I accept this demand and direct that clerical staff, should punch their cards as prayed by the management of the Company.

5. I now take up the demands raised by the respondent‑Union through Application No. 18 (24)/83. On 30th December, 1982 a Charter of Demands was served by the respondent‑Union on the Company. Demand No. 1 relates to increase in basic pay. In para (a) of the said demand, it has been prayed that the basic pay of all the classes of the employees of the National Refinery Limited be increased by 50% but not less than Rs.250 in an individual case. The respondent‑Union in justification of the said demand has stated that the Company is a taken over industry but for all legal and financial purposes, is a public limited Company, whose shares are available for sale and purchase, and regular dividends are paid to shareholders. It is stated that the Company is a Petroleum Refinery and Petro‑Chemical Unit and that it enjoys a monopolous position alongwith Pakistan Refinery Limited. It has unassailable paying capacity with colossal profits. It is contended that the workers working in the factory who are highly skilled and specialized are entitled to the highest scale of pay. It has been further submitted that the workers by virtue of application of the Pakistan Essential Services (Maintenance) Act, 1952 are actually captive workers since they are prevented from leaving the country and seeking much more remunerative jobs elsewhere, which are available to them. It has been submitted that a large number of workers who had been offered handsome jobs outside the country were not allowed to leave their jobs. It has been submitted that the demand for revision of wages, allowances and other benefits after a lapse of two to three years is justified in view of the galloping rise in the cost of living index and the cost of consumers' goods in the country. It has also been contended that the wages of the workers are low as compared with other workers of the Engineering industries. Reliance has been placed on the Third Insurance Wage Commission Award through which additional increase of about 40% in the wages of the workers has been granted. It is also submitted that the Federal Government employees have also received 10% rise in wages in their existing basic pay plus Dearness Allowance.

6. The Company in reply has stated that it is not a self‑financing industry as prices of its products are fixed by the Government and in lieu of that the Government pays subsidy to the Company from year to year in the shape of ad hoc reimbursements. A statement of ad hoc reimbursement from the year 1977 to 1983 has been placed on record. It is therefore contended that the Company is not empowered to fix its own prices to make up the losses. It has been also contended that had the Government not provided relief to the Company in the shape of ad hoc reimbursements, it would not have been possible for the Company to pay 15% dividends to its shareholders. It has also been contenaed that the wages prevailing in the Automobile Industry, Engineering Industry, like National Motors, Awami Autos. Nia Daur, Bela Engineering Limited and EXXON Chemicals Limited, relief on by the respondent‑Union are not comparable industries.

7. As regards rise in cost of living it has been contended by the Company that it is the admitted position that the Company has paid 45% of the basic wages as dearness allowance during the operative period of the agreement dated 12th February, 1981 and that w.e.f. 1st July, 1981 the workers also received dearness allowance at the rate of 10% of the basic pay subject to minimum of Rs.100 and maximum of Rs.154 p.m. It is also contended that the wages, allowances and other conditions of service of the workers have been gradually improved over the last several years as would be evident from the terms of the six collective bargaining agreements executed between the union and the management during the last fourteen years. It is finally submitted that the existing wages structure is quite adequate, fair and does not warrant any change.

8. From the above discussion it would be apparent that the parties have been signing collective bargaining agreements with the respondent union in spite of the fact that the Company has no powers to fix the price of its products. It is admitted that 15% to 20% dividend has been paid to the shareholders. It is also admitted that Government pays subsidy in the shape of ad hoc reimbursement to the Company for the running of its affairs. I, therefore, feel that the Company is in a position to give the increase in wages as it has been doing in the past through collective agreements in spite of the fact that it cannot fix prices of its own products and in spite of the fact that it is not a self‑financing institution.

9. The respondent‑Union has mainly relied upon the Third Wage Commission Award for the Insurance Corporations to prove that they are entitled to increase in wages in view of the rise of cost of living index and in the cost of Consumers' articles in the country. The Third Wage Commission which was headed by Mr. Justice (Rtd.) Dorab Patal (ex‑Judge, Supreme Court of Pakistan), Mr. Fayaz Akhtar, Joint Secretary, Ministry of Finance, and other Members has discussed the impact of the rise in the Cost of Living index for the very period which is under consideration. They have also taken account of the fact that in 1981 the employees of the Insurance Corporations received 10% increase in basic pay subject to a minimum of Rs.100 and a maximum of Rs.250 in lieu of the Dearness Allowance of Rs.40 p.m. and the Additional Dearness Allowance of Rs.30 per month sanctioned in 1979 and 1980. They have also taken into account that 45% of basic pay subject to a minimum of Rs.50 and a maximum of Rs.200 over and above the dearness allowance sanctioned in 1981 was allowed in the year 1982. An extract of the said Third Wage C3mmission Award as contained in Chapter II on limitation of wage increase is given below: --‑ "Limitation of Wage Increase.‑‑ In the last three years, the prices of‑all essential commodities have increased considerably. The cost of living indices for industrial workers for the period from January, 1981 to June, 1983, received from the Federal Bureau of Statistics, Government of Pakistan (Annexure VIII) show a cumulative increase of about 35% over the above period. Against this price increase, Government allowed two ad hoc increases in the form of dearness allowance in 1981 and 1982, which were also extended to the employees of the Insurance Corporations. 1981: 10% of basic pay subject to a minimum of Rupees one hundred and a maximum of Rs.250 in lieu of the dearness allowance of Rs.40 per month and the additional dearness allowance of Rs.30 per month sanctioned in 1979 and 1980. 1982: 45% of basic pay subject to a minimum of Rs.50 and a maximum of Rs.200 over and above the dearness allowance sanctioned in 1981. According to the State Life Insurance Corporation of Pakistan the grant of ad hoc allowances has substantially compensated the employees for the rise in prices in the last three years. We do not think that this assessment is correct. The increase allowed by Government in the form of dearness allowances in 1981 and 1982 work out to only 1Z% of the emoluments sanctioned by the Second Wage Commission as against the increase of about 35% in the Cost of Living over the past three years. The Government of Pakistan sanctioned the following further concessions to the employees of Corporations/ Banks and financial institutions, under the Federal Government, with effect from 1st July, 1981. The Federal Government have now introduced the basic Pay Scales Scheme effective from July 1, 1983 under which the existing pay scales, allowances and other financial terms of Government employees have been improved. The new pay structure for Government employees provides for substantial increases in wages and salaries. It also provides for a point to point fixation of pay of the existing employees in the new pay scale, subject to the condition that where the pay so determined does not give the employee concerned a minimum increase of 10% of his existing basic pay plus dearness allowance over and above the emoluments drawn by him, his pay shall be fixed at the next stage in his basic scale that gives him that advantage. The dearness allowance and the local compensatory allowance have, therefore ceased to be admissible with effect from July 1, 1983." Concluding the discussion the Third Wage Commission Award states as under: "After taking into consideration all the factors mentioned above the Wage Commission is of the opinion that total additional increase in the wages of the workers of the Insurance Corporation should not be less than 40% of the Wages allowed them by the Second Wage Commission Award since January, 1980. The Commission has accordingly recommended an increase in the wages of the workers to the above extent."

10. In view of the above findings of the Third Wage Commission Award and taking other factors into consideration I feel that I would be justified in recommending increase of ten per cent in the basic wage of the workers for which prior approval of the Government is solicited. This also disposes of the demand No. 2 raised by the Company. These directions shall take effect from 1st March, 1983 for a period of two years. Demands raised by the Company and the respondent‑Union are respectively enclosed at Annexures 'A' and 'B'.

11. The other demands are rejected for want of justification. A. E. Directions accordingly.