1982 PLP 230 (PLC)

Pak. Tobacco Company Ltd. v. Pak. Cigarette Labour Union P L D 1977 Kar. 879 and Khyber Tobacco Company Ltd., Mardan v. Labour Union P L D 1976 Posh. 8 overruled. Masood Mirza for Appellant. Syed Ashraf Hussain Rizvi for Respondent, The respondent, who was employed as a permanent workman in the Karachi Shipyard and Engineering Works Ltd., the appellants herein, was dismissed from service, vide the appellant establishments' order, dated 4th September, 1917. The respondent challenged the said order through Petitioner No. 262 of 1977, which was allowed by the learned Labour Court No. V. who declared that the dismissal orders were invalid as they were passed by an incompetent authority. The learned Labour Court, however, allowed the appellant establishment to hold a fresh enquiry against the respondent. A fresh enquiry was, accordingly, bold by the appellant establishment and in consequence thereof a fresh order of dismissal was passed by the appellant establishment on 19th No vember, 1979. This second order of dismissal, in turn, was challenged by the respondent land it appears that proceedings in respect of it are pending before the learned Vth Labour Court.

2. In between 4th September, 1977, the date of the first order of dismissal of the respondent, and 2nd October, 1979, the date on which the said dismissal order was set aside by the learned Vth Labour Court, the respondent submitted a fresh application on 11th February, 1978, under section 25‑A, I. R. O for the award to him of statutory bonus under Standing Order 10‑C. This application was resisted by the appellant establishment on the ground that a sum of Rs. 927 had already been paid to the respondent as statutory bonus and nothing more was payable to him. The learned Labour Court, however, took the view that the respondent was entitled to a statutory bonus as well as a settlement bonus and the previous payment of Rs. 927 was on account of settlement bonus. The appellants preferred an appeal against the said decision to this Tribunal which remanded the case to the learned Labour Court as the demand for the payment of bonus was for the period that the respondent had been kept out of service but there was nothing on record to show that he had been reinstated in service. On remand, reinstatement of the services of the respondent was established and, accordingly the learned Second Labour Court, which has heard the matter, has re‑affirmed the earlier order regarding the award of statutory bonus in addition to settlement bonus. The appellant establishment has now come up in appeal in the third round of litigation.

3. The sole point which falls to be considered in this appeal is whe tber the respondent is entitled in addition to statutory bonus the settle ment bonus. It is not disputed that the respondent has been paid a sum of Rs. 927 which according to the respondent was paid to him towards the settlement bonus. The claim of the respondent for a statutory bonus in addition to the settlement bonus is founded upon the settlement, dated 19th July, 1976 arrived at between the appellant establishment and the Karachi Shipyard Workmen's Union, the C B A in the said establish ment. The settlement, in respect of the demand for bonus, reads as follows :‑ "Demand regarding bonus.‑-In full and final settlement of the demand it is agreed that payment of the annual bonus of one month's basic wages (195 hours basis) will be determined and declared by the Management by 15th October, 1976 according to Standing Order No. 10‑C of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968."

4. It was contended by Mr. Ashraf Hussain Rizvi, the learned counsel for the respondent workman, that the bonus under the above settlement was payable irrespective of whether the establishment was or was not making profits and consequently such bonus was of a diffe rent kind from the statutory bonus payable under clause (1) of Standing Order 10‑C. He, accordingly, argued that the respondent was entitled both to settlement bonus as well as to the statutory bonus. A similar issue as has been raised in this appeal has been considered by their Lord‑ships of the Supreme Court in the case of Pak. Cigarette Labour Union and another v. Pakistan Tobacco Company Ltd. and another (P L D 1981 S C 495). The facts in the Pakistan Tobacco Company's case were that it had been paying bonus to its workmen be fore the enactment of Standing Order 10‑C and when the said Order came into force it was under obligation to pay bonus to its workmen under a settlement executed on 6th January, 1972. On the enactment of Standing Order 10‑C, the Pakistan Tobacco Labour Union demanded statutory bonus in addition to the bonus payable under the settlement arrived at between the union and the Pakistan Tobacco Co. on 26th January, 1972. The parties attempted to settle their dispute, but as the Pakistan Tobacco Co. Labour Union stood firm on its demand for payment of statutory bonus in addition to the settlement bonus, the Pakistan Tobacco Company Ltd., after payment of the statutory bonus to the workmen, so as to avoid a strike in its factory, brought the matter for adjudication before the Labour Court. 5, The facts of Civil Appeal No. 118 of 1976, filed by the Khyber Tobacco Company Limited were that on earning profits in the financial year commencing from 1st July, 1976 it paid one month's wages as bonus to its workmen for that year. As it continued to make profits it paid a bonus of 12J% to its workmen for the next two financial years. There after, in January, 1971, it entered into a fresh agreement with its Labour Union under which it agreed to pay two month's bonus to its workmen for the calendar years 1970, 1971 and 1972. Before the expiry of the said agreement and after the promulgation of Standing Order 10‑C, the Khyber Tobacco Company entered into fresh agreement on 8th January 1973 with its Labour Union to pay its workmen "an annual bonus at the rate of 2J months basic pay in lieu of the bonus prescribed" in the year. After an exhaustive examination of the facts of the case and review of the case law on the subject their Lordships held that the workmen in both the appeals were entitled to retain their contract under settlement bonus but if they have also received the statutory bonus they are liable to refund it if the contractual bonus received by them exceeds or in all respects is equal to statutory, bonus. It was further held by their Lordships of the Supreme Court that "if and to the extent to which the contractual bonus falls short of the statutory bonus the workmen will be entitled to retain this difference from the statutory bonus." Their Lordships repel led the contention that a bonus "other than that payable under-clause (P L D 1977 Kar 879)" can only be a bonus not paid out of profits as also the contention that a bonus agreed to be paid for future years cannot be considered to be bonus paid out of profits, and pointed out that there was nothing to prevent an employer from agreeing to give a bonus for future years on the basis of its estimate of its profits. By this decision their Lordships of the Sup reme Court have disagreed with and over‑ruled the view taken by the Karachi High Court in the case of Pakistan Tobacco Company Ltd. v. Pak. Cigarette Labour Union (P L D 1977 Kar 879) and Khyber Tobacco Company Ltd., Mardan v. Labour Union (P L D 1976 Pesh.8).

6. In view of the decision of their Lordships of the Supreme Court, the respondent would be entitled only to the difference between the settle ment bonus and the statutory bonus. As already pointed out the respondent had admitted to have received payment amounting to Rs. 927 which he has appropriated towards the settlement bonus. It was no disputed by Mr. Masood Mirza, the learned counsel for the appellant establishment, that the statutory bonus to which the respondent was enti tled on the full amount of his emoluments would be Rs. 1270 as claim ed by the respondent. As such the respondent would be entitled to the difference between the sum of Rs. 927 already received by him and the amount of Rs. 1270 i.e. Rs.

343. I would, accordingly modify the impugned order of the learned Labour Court to that extent and would accor dingly party allow the appeal. The amount of Rs. 343, which has been awarded by this Tribunal to the respondent, should be paid out of the amount already deposited in the Court.