1976 PLP 725 (PLC)

This Constitutional Petition is directed against the award of Vth Sind Labour Court, Karachi dated 2nd April, 1974 whereby It was ordered that the workers of the Union existing in the petitioners organisation should be paid one month's gross salary for the year 1972-73 by way of bonus.

2. The brief frets cf Ile cafe are that the Petitioners are a company incorporated in Pakistan under the Companies Act, 1913 and carry on general insurance business. Tie 2nd respondent is the Workers' Union existing in the petitioner s organisation which is also a collective bargaining agent.

3. According to the petitioner, ever since its corporation in the year 1951 the company suffered losses uptil 196 but despite losses they paid one-month salary as bonus to their workers during the years 1951 to 1966. From 1967 to 1970 the petitioners made profits and the rate of bonus was enhanced to one and a half months salary. In 1971 the profits further rose and the rate of bonus also showed an upward trend as two months salary was paid as bonus.

4. In 1972 a Union was formed in the petitioner's organisation the Union served the petitioners with a charter of demand and an agreement was arrived at between the petitioners and the 2nd respondent which recited as under as regards the payment of bonus. "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, inn the month in which, bonus has been disbursed in the past and further agreed that these workers who do not complete full bonus year will be paid bonus on prorata basis provided they are in the service of the Company on the day on which bonus is declared.

5. In the dear 1972 the profits of the petitioners fell down as such the bonus paid to workers was also decreased to one and a half month salary. On 27.6-74 a demand notice was served upon the petitioner under section 26 of the Industrial Relations Ordinance, 1969 for the bonus guaranteed by Standing Order 10(c) of West Pakistan Industrial and Commercial Employ ment (Standing Orders) Ordinance, 1968 (hereinafter referred to as "the Ordinance). The effects of conciliation having failed, a petition was filed before the Labour Court who vide impugned order held that the bonus paid to the members of the Workers' Union was customary bonus and that over and above that they were entitled to bonus under section 10 (c) of the Ordinance.

6. The main contention of the learned counsel for the petitioner is that the bonus paid to the 2nd respondents for the years from 1951 to 1966 was ex gratia payment because during that period the petitioner's organisation was incurring losses whereas from 1966-1972 when the petitioners made profits they paid profit bonus and therefore they were not liable to pay further bonus in addition to the bonus which they have already paid. According to the learned counsel for the petitioners the bonus already paid to the 2nd respondent was linked with the profits and therefore it could not be termed as a bonus by way of usage or custom. He further argued that for a customary bonus it was necessary (a) that the rate at which the bonus had been paid should have remained uniform (b) there should be continuity for a large number of years (c) it should not be in accordance with any terms of service and (d) it should not be associated with any festival. In this case it is admitted feature that the bonus was continuously paid from the year 1951 to 1972 irrespective of the fact whether the petitioner's organisation earned profits or incurred losses. It was not associated with any festival and it was also not paid under any terms or conditions of service. As far as the rates are concerned it is not necessary that the rate should have remained the same throughout. There have been slight variations in the rate but revertheless it was paid even during the period when the company was suffering loses. Tie bonus was therefore rightly termed as customary horus. The following paragaraph from the finding of the Presiding Officer, Vth Sind Labour Court flay be quoted for reference : "It was only during the year 1971 and 1972 that the rate of bonus paid by the Company was slightly varied; viz. instead of one month's salary, one and half month salary as bonus was paid to the workers which in my opinion does not alter the position that the bonus paid was customary. This practice had already turned into usage 'by virtue of the fact that respondent had paid bonus for many a years in success on even when they had suffered losses Had it been other wise, how could a company have paid bonus even for these years when it suffered losses. It was entirely the burden of the respondent to prove that they had not suffered losses in those years when they paid bonus, which burden they have failed to discharge."

7. From the perusal of the above paragraph of the impugned judgment it clearly transpires that according to the evidence adduced by the petitioners the bonus was paid to the worker continuously and there was not a single year when it was not paid.

8. Standing Order 10 (c) of the Ordinance was inserted in the Ordinance on 13-4-72 which insured the payment of the additional bonus according to the formula laid down therein, and this bonus was to be paw in addition to any bonus which might have been paid by way of custom, or under any settlement or award. Section 10(4)(c) of the Ordinance provides that the rights of the workers to bonus which they have been receiving according to the terms of their employment or any usage or any settlement or an award of a Labour Court shall not be adversely affected by the 10 (c) bonus. It is therefore evident that statutory bonus is to be paid in addition to bonus being paid to the workers under a settlement or usage. The learned counsel for the petitioner relied upon Messrs Khyber Tobacco Co. Ltd. Mardan v. Labour Union and another (P L D 1976 Pesh. 8) I am afraid this case does not help him at all. On the other hand it goes against him because in this case it is h; Id that the bonus payable under Standing Order 10 (c) of the Ordinance was in addition to any contractual bonus payable to the workers under the terms of the agreement. In this case it is evident that there was a contract that whenever the company earned profits it will pay bonus and therefore it was held by the Court that the payment of contractual bonus would not affect the payment to which the employers are entitled under Standing Order 10(c) In the instant case the position is slightly different as there is no contract between the parties but it is by way of usage that the petitioners has been paying bonus to the 2nd respondent. This payment is safeguarded in subsection 4 of the s:ction 10 (c) of the Ordinance The learned counsel for the petitioner has also relied upon Eastern Federal Union Insurance Workers' Union Karachi v. Vth Labour Court Karachi, and another (P L D 1976 Kar. 274). This case was decided by me. The facts of this case wore totally different. I had held that the petitioners were not entitled to bonus claimed by them in addition to 10 (c) bonus. The facts giving rise to that petition were that the payment which was being made to the workers was admitted to be a payment made by way of Eid advance which was adjustable towards the profits, bonus or salary, Subsequently the workers agitated that the payment made to them by way of Eid advance should be declared as bonus which request was not adhered by the Management. Keeping in view the facts of the case I had held that the payment made to workers was an advance facility extended on Eid occasion and not bonus. This case has no relevance with the facts of the instant case.

9. Before I part with the case I may make a reference to the averments of the petitioner in the petition itself. In paragraph 3 of the petition the petitioner has stated that since 1951 he had been paying bonus to its workers irrespective of profits or losses. It i; admitted that for a number of years the dividend was paid to the share holders as there were no profit but annual payment of bonus was made to the workers regularly. He bad not used the word ex gratis payment in this paragraph at all while referred to the payment. In para. 15 of the petition the petitioner has once again admitted that the demand of the workers in the charter of demand was for the profit bonus which means that the petitioners themselves admitted that what they had been paying was bonus by way of custom or usage and it could in no manner be linked with the profits. I may reproduce here paragraph 15 of the petition. "That the respondent No. 2 served a charter of demands dated 10th April, 1972 upon the petitioner under section 26, of the Industrial Relations Ordinance, 1969 in which they raised a number of demands including a demand of profit bonus."

10. For the foregoing reason I do not find any substance in this petition which is hereby dismissed. The parties are however left to bear their own costs.