Law:

Section:

Industrial Relations Ordinance (XXIII of 1969)-- --- S. 40(2)-Settlement---'Binding for period agreed upon by parties--Gratuity on resignation or death-Payment agreed to by employer and entered in settlement operative for one year-No such term entered in settlements of subsequent years though demand made by workers' Union-Labour Court holding that benefit of gratuity once extended under agreement could not be withdrawn to disadvantage of workers on plea of absence of any term or clause in subsequent settlements-Substitution of agreement by subsequent agreement, in circumstances, held, amounted to discharge of previous agreement--View taken by Labour Court, in circumstances, rejected by High Court. Anson's Law of Contract, 1959 Edn., p. 395; Seimen (Pakistan) Employees' Union v. Seimen (Pakistan) Engineering Company and 2 others 1969 P L C 341 and Trading Corporation of Pakistan Ltd., Karachi v. Employees' Union 1974 P L C Note 76 at p. 42 ref. Samad Khan for Petitioner. Date of hearing: 20th September, 1980. JUDGMENT Respondents 2 to 8 were weavers, employed as permanent workmen, with the petitioner since before .1972. The number of workmen, employed with the petitioner, was, at no time, more than 30. 2. On 4th January, 1972, as a result of negotiations between the petitioner employer and representatives of the Workers' Union, they reached an agreement, one of the terms of which, relevant for the purpose of present petition, was: "Gratuity will be given on resignation also and in the event of death, it will be given to his legitimate heirs." The above agreement was reached for one year from 4-9-1972 to 3-9-1973. 3. On 5th September, 1973, that is, two days after the above agreement had expired on 3rd September, 1973, the Workers' Union submitted a charter of demands to the petitioner in which one of the demands raised was- "Gratuity should be paid according to Standing Order 12(6) and 12(8)." 4. As a result of negotiations between the petitioner-employer and the Workers' Union, an agreement was arrived at between them on 6th September, 1973, which was in force with effect from 4-9-1973 for one year till 3rd September, .1974. In this agreement, there was no term…

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