Law:

Section:

(a) Employees' Cost of Living (Relief) Act, 1973 (I of 1974)-- ---S. 7--Payment of Wages Act (IV of 1936), S.2(vi)--Gratuity, calculation of--Wages, held, would include allowances while emoluments not forming part of wages would be excluded there from--Gratuity could be calculated on permanent allowances which were paid along with basic pay. (b) Employees Cost of Living (Relief) Act, 1973 (1 oaf 1974)-- ---S. 7--Gratuity on cost of living allowance--Entitlement to--Employees, held, were entitled to gratuity on cost of living allowance right from date when provision of payment of cost of living allowance was made--If at time when employee was recruited in service, cost of living allowance was being paid to workers, such employee would be entitled to gratuity calculated on said allowance according to rate prevailing at such date-­However, if rate of cost of living allowance had been varying, gratuity would be calculated according to such variations. (c) Industrial Relations Ordinance (XXIII of 1989)-- ---S. 38(3)--Employees Cost of Living (Relief) Act, 1973 (I of 1974), S.7--Revisional jurisdiction, exercise of--Modifying orders of Courts below relating to calculation of gratuity, Appellate Tribunal directed that gratuity be calculated on all permanent allowance right from date employee entered into service and on cost of living allowance from date wherefrom this kind of allowance was allowed and not from date when S.7 of Act I of 1974 was amended in 1977. Nazir Ahmad Naz for Petitioner. Mahboob Alam for Respondent. Date of hearing: 22nd June, 1986. JUDGMENT The order, dated 21-1-1986 passed by the learned Presiding Officer, Punjab Labour Court No. 4, Faisalabad in its appellate jurisdiction under section 17 of the Payment of Wages Act is .reported to be wrong and of no legal effect. 2. The petitioner has been retired and the dispute between the parties is about the gratuity. The petitioner claims gratuity not only on basic pay but on allowances also as well as on cost of living allowance. The learned Authority allowed the whole claim but the learned lower appellate Court modified the order and allowed gratuity on basic pay and cost of living allowance. The…

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