Law:

Section:

Industrial dispute- --Basic wages--.Means wages without allowances-Settlement pro­viding payment of profit bonus on basis of basic wages-Claim for bonus on basis of wages inclusive of cost of living allowance, in circumstances, held, not sustainable-Negotiable bonus payable under settlement-Distinguished from statutory bonus-Cost of living allowance part of wages only for purpose of statutory bonus-West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance (VI of 1968), S. O. 10-C read with Employees' Cost of Living (Relief) Act, 1973 (1 of 1974), S. 7, proviso. Pakistan Tobacco Company Ltd. v. Pak Cigarette Labour Union tend another P L D 1977 Kar. 879 ref. Sardar Ikramullah for Appellant. Nizamuddin Baloch for Respondent. Date of hearing : 3rd March, 1981. ORDER A settlement was arrived at between the Larkana Sugar Mills, the appellants herein, and the Larkana Sugar Mills Employees' Union, the respondent herein, on 1st December, 1975. The said agreement was to remain in force for a period of 2 years. Clause (3) of the said agreement which related to demand of bonus by the workmen, is to the following effect :- "Demand No. 3. -Three bonuses with Allowances. Agreement-In full and final settlement of this demand it has been agreed that Production Bonus will be paid on the following formula :- (i) 30 days basic pay as bonus on production of 1 lac bags of sugar, (ii) 10 days additional basic pay as bonus for Production of every 25,000 bags of sugar above 1 lac bags." 2. It appears that for the year 1977-78, the Production Bonus payable under the aforesaid agreement was paid by the Management on the basic wages, including the cost of living allowance. This was purported to have been done in compliance with the memorandum, dated 9th October, 1978, for the P. I. D. C. to the Managing Directors/ General Managers of the establishments under its control including the P. I. D. C. project of Larkana Sugar Mills. The said memorandum reads as follows :-- MEMORANDUM "Subject : Discontinuance of Payment of Cost of Living Allowance as part of bonus other than statutory profit bonus as for Standing Order 10-C Reproduced below is an extract from the judgment,…

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