1989 PLC 218 (PLP)

AJMAL MIAN, J.‑‑This petition is directed against an order, dated 16th March, 1981 passed by the learned Sind Labour Appellate Tribunal, Karachi (hereinafter referred to as the Tribunal) in Application No. KAR‑274 of 1980 holding that the petitioner is liable to pay bonus of profit under Standing Order 10‑C to their workers.

2. The brief facts leading to the filing of the above petition are that the petitioner, inter alia, runs a sugar factory rein they engage about 600 workers in every season. The financial year of the petitioner commences from 1st October :old ends on 30th September of the following year. The petitioner had started production of sugar in the year 1961 and from the year 1961‑62 bonus had been paid by the petitioner to its workers from the profits as averred in the petition. It seems that on 9‑2‑1972 the petitioner and respondent No. 1 as the Collective Bargaining Agent entered into a settlement (hereinafter referred to as the settlement) which., inter alia, contains a provision relating to the payment of bonus, which reads as follows:‑ "Demand No Bones.‑‑(a) The management agreed to pay 1‑1/2 months' bonus to the workers for the season of 1970‑71 in addition to the 3 months' bonus already paid to the workers on the existing pay scales as usual. (b) The management agreed to pay the bonus on prorata basis and according to the duration of season on the formula of one bonus on one lac bags production of sugar during the current season and onwards to the maximum of four bonuses. Every one place of decimal equal to 3 days' bonus will be minimum unit payable. (Bag to be calculated at weight of two maunds and 30 seers of each). The‑ union accepted this formula for the current season and more seasons of 1972‑73 and 1973‑74." 3.It further seems that on 13‑4‑1972 Ordinance No. IX of 1972 was promulgated by the President of Pakistan by which Standing Order 10‑C was added to the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, which made obligatory for every employer to pay profit bonus to his workmen every year out of the profit earned during the year. Upon the enforcement of the above provision contained in the Standing Order 10‑C, respondent No. 1 raised demand for the payment of the above annual statutory bonus. Since the above demand was not met by the petitioner, respondent No. 1 filed an application under section 34 of the Industrial Relations Ordinance, 1969 (hereinafter referred to as the I.R.O.) in the Vlth Labour Court at Hyderabad. The above application was resisted by the petitioner and the learned Labour Court dismissed the above application on the ground that the bonus paid to the workmen under the settlement was a profit bonus and, therefore, the workmen were not entitled to any further profit bonus under Standing Order 10‑C. Respondent No. 1 being, aggrieved by the above order filed Constitutional Petition No. 487 of 1974 m the erstwhile High Court of Sind and Baluchistan, which was allowed by a learned Single Judge y a judgment dated 13‑4‑1976 and the case was referred to the Tribunal. It may be advantageous to reproduce the operative portion of the judgment, which reads as follows:‑ "The employer's stand is that the bonus granted by the settlement was a bonus of the nature of profit bonus, which is payable under clause (1) of Standing Order 10‑C, therefore, it would not be admissible as protection given by clause (4) thereof would not emend to it. On the other hand, the workmen's stand is that this is a bonus purely based on production and is not relatable to any profits. The learned counsel for the petitioners contends that even if the establishment does not make any profits in a given year, still it would not be absolved of its liability to pay a bonus, in terms of the settlement. Whatever be the respective stand of the parties the fact remains that dispute is now mainly based on the interpretation of the settlement itself. The learned counsel for the respondent contends that the Labour Court had no jurisdiction to interpret the settlement in view of the provisions of section 50 of the Industrial Relations Ordinance and that an objection to the competence of application under section 34 of the I.R.O. was raised at the beginning but was not entertained. Whatever be the position in this regard the provisions of section 50 of the I.R.O. are very clear which state that in case a difficulty or a doubt arises as to the interpretation of any provision of an award or settlement it shall be referred to the Tribunal constituted under the Ordinance whose decision shall be final and binding on the parties. There was no alternative left for the learned Presiding Officer of the Labour Court but to refer the matter to the Tribunal for interpretation of the settlement regarding the grant of bonus. The provisions of section 50 are exclusive and, therefore, I would refer the matter to the Tribunal for interpretation of the settlement dated 9‑2‑1972. In case the learned Tribunal comes to the conclusion that the bonus granted under the settlement dated 9‑2‑1972 was based purely on profits the workmen would not be entitled to bonus allowed under the settlement with effect from the date of coming into force of Ordinance IX of 1972. Otherwise they would be entitled to that bonus in addition to the one granted by Standing Order 10‑C(1), which in any case is payable to them. The petition stands disposed of in these terms. Cost to be borne by the parties."

4. Against the above judgment of the learned Single Judge, respondent No: 1 filed High Court Appeal No. 56 of 1976, which was dismissed in limine by a Division Bench of this Court by an order dated 12‑8‑1976.. After that respondent No. l presented an application to the Tribunal under section 50 of the Ordinance on 20‑4‑1980, which was disposed of by the impugned order in the above terms. The petitioner being aggrieved by the above order has filed the present` petition.

5. In support of the above petition Mr. Mansoorul Arfin, learned counsel for the petitioner has urged as follows:‑ (i) That the respondent No. 1's above application was time‑barred as the bonus could have been claimed by the workmen within three months of the closing of the accounting year of the petitioner for which the bonus was claimed. (ii) That the learned Tribunal should have gone through the evidence and the past practice in order to ascertain whether the petitioner were to pay profit bonus or the production bonus. (iii) That in view of the judgment given in the case of Pak Cigarette Labour Union v. Pakistan Tobacco Company Ltd., Karachi and another P L D 1981 S C 495, no statutory bonus was payable as the workmen were to be paid bonus under the settlement. On the other hand Mr. Ali Amjad, learned counsel for respondent No. 1 has contended as follows:‑ (i) That the matter was referred to the Tribunal under section 50 of the I.R.O., by the learned Single Judge in aforesaid Constitutional Petition No. 487 of 1974 and, therefore, there was no question of laches on the part of respondent No. 1 and that in any case the learned Tribunal has properly dealt with the question of laches even on merits, which cannot be interfered with in exercise of constitutional jurisdiction. (u) That under the settlement the production bonus was agreed to in place of profit bonus and, therefore, the previous practice would not be relevant for the purpose of construing the terms of the settlement. (iii) That the case of Pak Cigarette Labour Union v. Pakistan Tobacco Company Ltd. Karachi and another referred to by the learned counsel for the petitioner in fact supports the case of respondent No. 1.

5. Adverting to the first submission of Mr. Mansoorul Arfin that the respondent No. 1's above application was time‑barred as the bonus could have been claimed by the workmen within three months of the closing of the accounting year of the petitioner for which the bonus was claimed, it may be observed that in furtherance of his above submission, he has referred to Standing Order 10‑C, which reads as follows:‑ 10‑C. Payment of bonus.‑‑(1) Every employer making profit in any year shall pay for that year within three months of the closing of that year to the workmen who have been in his employment in that year for a continuous period of not less than ninety days a bonus in addition to the wages payable to such workmen. (2) The amount of the bonus payable shall‑‑ (a) if the amount of the profit is not less than the aggregate of one month's wages of the workmen employed, be not less than the amount of such aggregate, subject to the maximum of thirty per cent of such profit; Illustration.

1. If the profit is Rs.1,20,000 and the aggregate of one month's wages of the workmen is Rs.30,000 the amount of bonus payable shall be not less than the aggregate of one month's wages, that is to say Rs.30,

000. Illustration .2‑‑If the profit is Rs.30,000 and the aggregate of one month's wages of the workmen is also Rs.30,000 the amount of bonus payable shall be not less than thirty per cent of the profit that is to say, Rs.9,000. (b) If the amount of the profit is less than the aggregate referred to in paragraph (a), be not less than fifteen per cent of such profit. (3) The bonus payable to a workman entitled thereto under clause (1) shall bear to his monthly wages the same proportion as the total bonus payable by the employer bears to the aggregate of the wages referred to in paragraph (a) of clause (2) and shall be paid either in cash or in N.I.T Units of equivalent value at the option of such workman. (4) Nothing in this section shall be deemed to affect the right of an workman to receive any bonus other than that payable under clause (1) to which he may be entitled 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)

6. On the basis of the above quoted sub‑para (1) of the above standing Order 10‑C, it has been contended by Mr. Mansoorul Arfin that an employer is liable to pay profit bonus within three months of closing of the accounting year for the year for which the bonus is sought to be recovered. He has, therefore, submitted that since the settlement was for a period of three years, namely, for the years 1971‑72, 1972‑73 and 1973‑74 respondent No. 1 could not have presented aforesaid application under section 50 of the I.R.O. on 20‑4‑1980 i.e. after the expiry of several years. In this regard, it may be pointed out that the i learned Single Judge by his aforesaid judgment dated 13th April, 1976 passed in aforesaid Constitutional Petition No. 487 of 1974 referred the matter to the Tribunal, under section 50 of the I.R.O. which is evident from the above quoted operative portion of the above order in para. 3 hereinabove. The above judgment was upheld by a Division Bench of this Court in High Court Appeal No. 56 of 1976 by an order dated 12‑8‑1976 and, therefore, this Court cannot hold in this petition that the above judgment and the order were illegal. It was open to the petitioner to have challenged the judgment of the learned Single Judge before the petitioner to have challenged the judgment of the learned Single Judge before the competent Court. In the absence of any challenge the above judgment had acquired finality upon the dismissal of the High Court Appeal No. 56 of 1976 in limine. Since it was a reference made by a learned Single Judge of the erstwhile High Court of Sind and Baluchistan under section 50 of the I.R.O., no period fur making such reference is provided for. It is true that the aforesaid High Court Appeal was dismissed on 1 2‑8‑1975 ‑upholding the above judgment dated 13‑4‑1976 of the learned Single Judge but respondent No. 1 filed aforesaid application under section 50 of the I.R.O., on 20‑4‑1980, no doubt there is delay in filing of the above application. However, it may be pointed out that these was no direction from the learned Single Judge to the effect that respondent No. 1 was to file such an application, the matter was referred by the learned Single Judge and, therefore, a copy of the above judgment should have been sent by the office of the Writ Branch of this Court to the learned Tribunal which was not done. The respondent No. 1 even otherwise submitted explanation for the filing of the above application before the Tribunal by stating that the file of the writ petition was misplaced in the Court and it was available only on 12‑3‑1980. The above explanation was accepted by the learned Tribunal, which was competent in law to accept the same. We are, therefore, inclined to hold that the above, first contention of the learned counsel for the petitioner is devoid of any force.

7. As regards the second submission of the learned counsel for the petitioner Mr. Mansoorul Arfin that the learned Tribunal should have gone through the evidence and the past practice in order to ascertain, whether the petitioner were to pay profit bonus or the production bonus, it may be observed that factually no oral evidence was produced by the petitioner before the learned Tribunal. The reference was made by them to the previous notices and settlements entered into between the petitioner and respondent No.

1. The' learned Tribunal has dilated upon the above aspect exhaustively. However, it will suffice to observe that it is true that previously the petitioner was paying bonus on the basis of profit earning but the above practice and the agreement was deviated in sub‑para (i) of demand No. 1 of the settlement, it was provided that for tire B year 1970‑71 the petitioner would pay half month bonus to the workers in addition to three months' bonus already paid to the workers on the existing pay scales as usual, whereas in relation to the subsequent years sub‑clause (b) of the above clause provided formula of payment of bonus, namely, one bonus on one lac bags to the maximum of four bonuses during a year. It was also agreed that each bag of sugar would weigh two maunds and 30 seers. In our view, this was a deliberate departure from the previous practice and the agreement. The settlement on the above issue has no ambiguity as to warrant the consideration of tide previous practice/agreement.

8. It was then contended by Mr. Mansoorul Arfin, the learned counsel for the petitioner that the bonus was to be paid out of the profit and the deviation in the settlement was as to the manner of the payment. To re‑enforce the above submission, he also submitted that since the prices of sugarcane and the sugar were controlled by the Government it was possible for the petitioner to have calculated the profit of a particular season and to have agreed to the payment of bonus on the above basis of profit our view, the above contention is devoid of 1 any force, which is evident it we were to analyze the above submission. The C petitioner could not have refused the payment of bonus on the basis of the production even if they were to suffer loss for the relevant years for unforeseen reasons as the payment bonus on the basis of production was ‑lilt linked viii; the earning of profit under the terms of the settlement. The learned Tribunal has highlighted the distinctions between a profit bonus and a production bonus in the impugned order to which we are inclined to agree. In our view, the conclusion armed at by the learned Tribunal on the above question is in consonance with law.

9. Referring to tile Last submission' of Mr. Mansoorul Arfin, that in view of the judgment given in the case of Pak Cigarette Labour Union v. Pakistan Tobacco Company Ltd., Karachi and another P L D 1'9231 S C 495, no statutory bonus was payable as the workmen were to be paid bonus under the settlement, it may be observed that subsection (4) of the Standing Order 10‑C clearly provides that nothing contained in the above Standing Order 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 entitled in accordance with the terms of his employment or any usage or any settlement or axe award of a Labour Court established under the Industrial Relations Ordinance, 1969. In other words, if we were to read subsections (1) and (4) of above Standing Order 10‑C, it becomes evident that a workman is not entitled to receive the bonus which is covered by subsection (1) of the above Standing Order 10‑C but it does not exclude the right of the workman to claim any other bonus which is not covered by above subsection (1). It may be observed that there are several types of bonus which include bonus on profits and bonus on production. In our view, subsection (1) of Standing Order 10‑C of the Standing Order does not cover production bonus as it covers only bonus on profit. The bonus on profit and the production bonus are distinct types of bonuses and, therefore, it cannot be ‑urged that the law‑makers intended to include production B bonus under subsection (1) of Standing Order 10‑C without specifying it and by only mentioning profit bonus. We are inclined to hold that the above judgment of the Hon'ble Supreme Court has clearly brought out distinction inter alia, between bonus cup profit and bonus on production. It has been held in the above case that a workman is not entitled to receive profit bonus twice, namely, under the settlement and also under Standing Order 10‑C of the Standing Order, if the bonus payable under the former is equivalent to or more than what is payable I under the latter, It has been further held that in case bonus on profit is more payable under Standing Order 10‑C than under a settlement, a workman will be entitled to receive maximum to the extent payable under 10‑C. In other words, he will be entitled to recover the difference of the amount what has been paid under the settlement and what is payable under 10‑C. Since in the present case under sub‑clause (b) of demand No.1 of the settlement the bonus payable was on production, are entitled to the bonus under the settlement as well as under Standing that the workmen rightly concluded that the Order 10‑C of the Standing Orders Ordinance.

10. The petition has no merits and, therefore, it is dismissed, but there will be no order as to costs. AA./F‑81/K Petition dismissed.