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1984 Supreme(SC) 250

SUPREME COURT OF INDIA
O. CHINNAPPA REDDY AND AMARENDRA NATH SEN, JJ.
M/s. Harihar Polyfibers, Petitioner
Versus
The Regional Director, E.S.I. Corporation, Respondent.
Spl. Leave Petn. (Civil) No. 9795 of 1983
Decided on 4-9-1984.

Advocates:
B.KRISHNA PRASAD, C.S.LALITHA, K.R.NAGARAJA, Naresh Kaushik, R.S.HEGDE

Headnote:Constitution of India, 1950-Article 136 -Special leave to appeal under-Employees State Insurance Act-Section 2(22) -Wages-Definition and meaning of-(i) whatever remuneration paid or payable to employee under terms of employment contract; (ii) whatever payment made to employee in respect of any period of authorised leave lock out, strike which is not illegal or lay-off; (iii) other additional remuneration, if any, paid at intervals of not more than 2 months–Dues ‘wages’ in elude contribution paid by employer to providend fund or providend fund; any T.A. or value of traveling concession; any sum paid to employee to defray special expenses; or gratuity payable on discharge? (No)-Whether term wages includes house rent allowance, night shift allowance; heat, gas and dust allowance; incentive allowance, incentive bonus; in am (a bounty); etc.? (Yes) (Paras 2, 3, 6 and 11)

JUDGMENT

O. CHINNAPPA REDDY, J. :— The question for consideration in this petition for special leave to appeal under Article 136 of the Constitution of India is whether the expression wages, defined by Section 2 (22) of the Employees State Insurance Act, includes House Rent Allowance, Night Shift Allowance paid to those employees who are obliged to work in the night shift and the Heat, Gas and Dust Allowance and Incentive Allowance paid by an employer to his employees. Section 2 (22) defines wages as meaning :

"all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lock-out, strike which is Dot illegal or lay-off and other additional remuneration, if any, paid at intervals not exceeding two. months, but does not include (a) any contribution paid by the employer to any pension fund or provident fund, or under this Act; (b) any travelling allowance or the value of any travelling concession; (c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (d) any gratuity payable on discharge."

2. The Employees State Insurance Act is a welfare legislation and the definition of wages is designedly wide. Any ambiguous expression is, of course, bound to receive a beneficent construction at our hands too. Now, under the definition, first, whatever remuneration is paid or payable to an employee under the terms of the contract of the employment, express or implied is wages; thus if remuneration is paid in terms of the original contract of employment or in terms of a settlement arrived at between the employer and the employees which by necessary implication becomes part of the contract of employment it is wages; second, whatever payment is made to an employee in respect. of any period of authorised leave, lock-out, strike which is not illegal or lay-off is wages; and third, other additional remuneration, if any, paid at intervals not exceeding two months b also wages; this is unqualified by any requirement that it should. be pursuant to any term of the contract of employment, express or implied. However, wages does not include any contribution paid by the employer to any pension fund or provident fund, of under the Act, any travelling allowance or the value of any travelling concession, any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment and any gratuity payable on discharge, Therefore wages as defined includes remuneration paid or payable under the terms of the contract of employment, express or implied but further extends to other additional remuneration. if any, paid at intervals not exceeding two months, though outside the terms of employment, Thus remuneration paid under the term; of the contract of the employment (express or implied) or otherwise if paid at intervals not exceeding two months is wages. The interposition of the clause and includes any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or layoff between the first clause, all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, was fulfilled and. the third clause, other additional remuneration, if any, paid at intervals not exceeding two months, makes it abundantly clear that while remuneration under the first clause has to be under a contract of employment, express, or implied, remuneration under the third clause need not be under the contract of employment but may be any additional remuneration outside the contract of employment. So, there appears to our mind no reason to exclude House Rent Allowance, Night Shift Allowance, Incentive Allowance and Heat, Gas and Dust Allowance from the definition of wages. A Full Bench of the Karnataka High Court in N. G. E. F. Ltd. v. Dy. Reg
















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