Sunday, September 5, 2010

Cost of Living Allowance Payment & Dawn Management

DAWN management which claims t be running leading English daily in Pakistan and "claim to be good pay master" but fact remains that they are too cruel as the traditional employers of Pakistan. It can be judged from the fact the Government of Pakistan under the Cost of Living (Relief) Act 1973 announced an allowance of Rupees 300 (Three Hundred Only) per month with effect from 01-03-1997 and another COLA @ Rs. 100/month with effect from 01-01-1998.

Yet the DAWN management instead of implementing its legal obligations for making the payments thereof opted to take false plea on one pretext or other pretext ultimately forced me to knock the door of court of law which with the blessings of ALLAH accepted my plea.

The verdict of the Court is given here under, kindly go through it and comment please and fellow journalist are ask to move the court for the enforcement of the same and get the relief on the same lines.


Case No. 640-A/2008.

Shamsul Islam Naz S/O Misbaudin Khan, Correspondent, Daily Dawn, PHPL, R/O 130-C, Peoples Colony No. 1, Faisalabad.



Hameed Haroon, Chief Executive of the PHPL & Abbas Nasir, Editor, “DAWN” PHPL, Haroon Hours, Dr. Zia udin Road, Karachi


Date of Decision:- 13-05-2009.

O R D E R .

The Petitioner on 29-07-2008, moved this petition U/S 15(2) of the payment of Wags Act, 1936, claiming therein that he has not been paid Cost of Living Allowance by the respondent w.e.f. 01-03-1997 at the rate of Rs. 300/- P.M. upto 31-05-2008 and another cost of Living Allowance at t rate of Rs. 100/- P.M. (Payable under the provisions of Cost of Living (Relief) Act, 1973) w.e.f. 01-01-1998 upto 31-05-2008, total of which comes to Rs. 52700/-. He has also claimed compensation amounting to Ten Time of the said claim of Rs. 52700/-.

After receiving Reply Statement from the respondents and a Replication there to from the petitioner, the following issue were framed ;-

2. At the very outset a Preliminary Objection about the jurisdiction of this Court was raised on behalf of the respondents, upon which I after hearing the parties passed the following order on 10-11-2008:-

“ The relevant record perused and the arguments heard and as a result of which it has been observed that since the issues of facts and law are involved in the question of jurisdiction therefore, the issues are hereby framed 1st and the Issue of jurisdiction” will be decided with main petition.”

3. Thereafter the evidence of the parties was recorded. The petitioner appeared as PW-1, in support of his claim and also tendered documents EXP-I to EXP-XI, while on behalf of the respondents, Mr. Muhammad Kurshed Aizid, Manager H & R, “Daily Dawn”, appeared as PW-1 and he also produced documents EXR-I to EXR-IV and his Counsel closed the evidence on behalf of the respondents”.

4. The parties tendered written arguments. The record perused and written arguments gone through. The issue-wise findings are as under:-

Issue No. 1 & 2:

The Issues No. 1 & 2 are interconnected i.e. as to whether the Cost of Living Allowance falls within the definition of Wages as defined under The Payment of Wages Act, 1936, and whether this petition moved by the petitioner is maintainable under Law. The Definition of Wages as given U/S2(VI) of the payment of Wages Act, 1936, is very vast and it reads as under;

“Wages” means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express OR Implied, were fulfilled, be payable,….

and even under the exclusion clauses (a) to (e), thereto, the cost of Living allowance has not been excluded from the definition of Wages, therefore cost of Living Allowance falls within the definition of “Wages” as defined under The Payment of Wages Act, 1936. So far the jurisdiction of this Court is concerned, the petitioner was admittedly an employee of the newspaper establishment as defined in the Newspaper Employees (Conditions of Service) Act, 1973, to which as per Section 2(d) (iv) of The Employees Cost of Living (Relief) Act, 1973 the said Act applies, therefore as per Section 6(b), the petitioner Could move a petition U/S 15 of the payment of Wages Act, 1936, before this Authority hence this Court has the jurisdiction to entertain and try this petition and this petition is fully maintainable under Law i.e. Section 6(b) of the Cost of Living (Relief) Act, 1973 read with Section 15(1)(2) of the Payment of Wages Act 1936. For ready reference Section 2(d) (vi) of the C.L.A (Relief) 1973, is reproduced;

S.2 (d) (vi) –“UNDERTAKING”, means ______________

(i) any payment for Overtime, or

(ii) any sum paid to an employee to defray special expenses entailed by the nature of his employment; or

(iii) any gratuity payable on discharge; or

(iv) any sum paid as bonus house rent conveyance allowance, traveling allowance or any other allowance.

(v) ………………………………………………..

(vi) a newspaper establishments as defined in the Newspaper Employees (Conditions of Service) Act, 1973 (LVIII of 1973) …….

Section 6(b) f the C.L.A. (Relief) 1973, reads as under;

S.6. Claim for recovery or delay in payment of Cost of Living allowance:-

Where contrary to the Provision of this Act, the Cost of Living allowance of any employee has been withheld or delayed such worker himself or through any other person authorized by him in this behalf may apply …………………..

(a) …………..

6(b)__ in any other case, to the authority appointed under Sub-Section (1) of Section 15 of the payment of Wages Act, 1936 having jurisdiction and the provisions of said section and Section, 6, 16, 17, 18, 19, 22, 23 and 26 of the said Act, shall so far as may be and with the necessary modifications, apply for the purposes of recovery of the cost of living allowance.

Relying upon Section 7 of the cost of Living (Relief) Act, 1973, and the case law i.e. 2000 PLC 268, the jurisdiction of this Court was also questioned. In the said judgment Section 6(b) of Act, of 1973, was not brought to the Notice of Hon’ble High Court NOR its effect was considered, However in 1986 PLC 941 (KARACHI HIGH COURT) Sections 6 & 7 of the Act, 1973 were considered and it was held ________(b) Payment of Wages Act, (IV of 1936) ______ S. 15 _______ Employees Cost of Living (Relief) Act, 1973, _______ Ss. 6 & 7 _______ conflict between Ss 6 & 7 Effect _____ Proviso to Section 7 does not nullify Section 6(b) _______ for recovery of Cost of Living Allowance by employee, specific remedy, is to approach Authority appointed under S. 15 of payment of Wages Act, 1936_________.

It is also settled law that, Special Law Prevails over General Law (2007 SCMR 298) & (2004 SCMR 130-132), contention of the, respondent’s Counsel, is therefore repelled. The issue No. 1 & 2 are therefore decided against the respondents.


Whether the respondents establishment does not come within the purview of Industrial Establishment and for that reason, this petition is liable to be rejected.

The cost of Living (Relief) Act, 1973, only applies to persons employed in an “undertaking” as defined under Section 2(d) of the said Act, 1973, which includes a Newspaper establishment (S.2(d) (vi) of the said Act, of 1973), therefore question of “Industrial Establishment”, is irrelevant to the facts of the case in hand, In any case in view of Section 17 of Newspaper Employees (conditions of Service Act, 1973, the respondents establishment, being a Newspaper establishment, is an “industrial establishment” for the purposes of The Industrial & Commercial Employment (Standing Orders) Ordinance VI of 1968, and in view of Section 1(4) of the Payment of Wages Act 1936, the said Act of 1936, applies to persons employed in any Industrial Establishment OR Commercial establishment.

ISSUE NO.3 : is therefore also decided against the respondents and it is held that the respondents establishment falls within the purview of “Industrial” Establishment and therefore on this score also, the petition in hand is maintainable under law:


Whether the respondents have not been impleaded correctly and that the Chief Executive is not responsible for payment rather the Manager H.R, is responsible?

RW-1 who is Manager H & R, of the respondents establishment admitted during cross-examination, as correct that the petitioner has made The Chief Executive & Editor as party to this case. He also admitted it correct that the appointment letter of te petitioner bears the signature of the Chief Executive. He also admitted that the written statement does not bear the Signature of any Director, OR Chief Executive OR the Secretary of the Company. He admitted that he has signed the written statement. He aos admitted that the salary Cheques were not signed by him. It is thus admitted position that neither the RW-1, was responsible for Payment of Wages of the petitioner nor was he the “employer” of the petitioner, therefore not a necessary party to this case. The Chief Executive was admittedly the “employer” of the petitioner, therefore he was responsible for Payment of Cost of Living Allowance and has been rightly sued alongwith the “Editor”. In any case since none out of the two respondents has signed the written statement Nor have appeared as a witness, therefore, they have no case at all. The burdon of proof of this issue was on them, which they failed to prove. No prejudice has been caused to the RW-1, who admittedly has signed, & got prepared the written statement and has also appeared as a sole defence witness. Under Order 1 Rule 10 of CPC, he can be deemed to have been impleaded as respondent No. 3. This issue therefore is, misconceived, hence is decided against the respondents.


Whether the petitioner is not entitled to the claimed amount because he has been paid all his wages and the Cost of Living burdon of this issue was also on the respondents, but they have failed to discharge the same, as none of the two respondents either signed / filed Even they did not specifically authorized the RW-1 to sign written statement/ Reply OR to appear on their, behalf as a witness and defend the claim of the petitioner. The RW-1, has admitted that the Pay Slip which they have produced do not include claimed Cost of Living Allowance. Only these find mention Rs. 50/- as CLA. He also admitted that in Pay Slip EXP-V, RS. 50/- cost of living allowance per month is entered and the amount claimed by the petitioner does not find mentioned in it. RW-1, has failed to produce any document in evidence in order to show that the claimed Cost of Living Allowance of Rs, 300/- P.M. & Rs. 100/-P.M, was ever merged in the Basic Pay of the Petitioner OR that of any other employees. So it is clear that the claimed Cost of living allowance was neither ever paid to the petitioner NOR it was merged in his Basic Pay. This issue No. 5 is therefore also decided against the respondents and the petitioner is held entitled to the claimed cost of living allowance.

ISSUE No. 6:

If the petitioner is entitled then to what extent / amount. It is not disputed that the Federal Government had allowed a cost of living allowance at the rate of Rs. 300/- P.M. w.e.f. 01-03-1997 and a further cost of living allowance at the rate of Rs. 100/- w.e.f. 01-01-98 under the provisions of Employees Cost of Living (Relief) Act 1973, to all persons employed in any “undertaking” as defined U/S 2(d) of the said Act of 1973. In view of the findings on Issue No. 5, the petitioner is found entitled to the claimed cost of living allowance. So far the quantum of CLA is concerned, the correctness of the claimed amount has not been disputed by the RW-1. The deposition of the petitioner that he was entitled to Rs. 50,700/- was not disputed during his cross examination, therefore, upto 31-05-2008, the petitioner was entitled to Rs. 52,700/- and from 1st June, 2008 to date and onwards, he is further held entitled to the cost of living at the rate of Rs. 400/- (Rs. 300+100/-) P.M. In this way upto 30th April, 2009, from 1st June, 2008, the petitioner is entitled to recover Rs. 4400/- from the respondents. The total entitlement of the petitioner thus comes to RS. 57,100/- (Rs. 52,700/- + Rs. 4400/-). This issue is therefore decided in favour of the petitioner.

In view of the above findings on Issue No. 1 to 6 this petition is accepted, the claim of the petitioner to the tune of RS. 57,100/- is decreed.

The respondents are therefore directed to deposit Rs. 57100/- (Fifty Seven Thousand One Hundred only) with this Court within 30 days for making payment to the petitioner.



Authority Under the Payment of

Wages Act, Faisalabad

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