Back
HIGH COURT OF CALCUTTA
Sinha
NATIONAL CARBON CO. (INDIA) LTD. - Appellant
Versus
M. N. GAN, JUDGE, LABOUR APPELLATE TRIBUNAL - Respondent
Civil Rule 551 Of 1956
Decided On : APRIL 12, 1957
INDUSTRIAL DISPUTES ACT, 1947 - SECTION 19 - SETTLEMENT - TERMINATION - NOTICE - BONUS - CALCULATION - COMPARATIVE CHART - JOINT CONTRIBUTORY FUND - INCREMENT IN RATES AND GRADES - LIVING WAGES - DIRECTIVE PRINCIPLES OF STATE POLICY - ARTICLES 43 AND 47 OF THE CONSTITUTION.
Fact of the Case:
The petitioner, National Carbon Co. (India) Ltd., was engaged in the manufacture of batteries and similar goods. In 1949, some of the workmen demanded bonus. Following this demand, the petitioner introduced a Joint Contributory Fund, which was an optional savings fund. On 15th January, 1951, the workmen and the petitioner entered into an agreement settling all claims and providing that no other demands regarding bonus or any other kind of payment could be made as long as the settlement was subsisting. The settlement was to be in force until 26th August, 1952. On 6th September, 1952, respondent No. 6 served a notice terminating the settlement and claiming bonus equivalent to four months' earnings plus 50% of the profit. The dispute was referred to the Fifth Industrial Tribunal, West Bengal, for adjudication. The Tribunal awarded a bonus of three months' basic pay for the year 1952, after deducting the benefits received by the workmen under the Joint Contributory Fund. The Appellate Tribunal upheld the award on the issue of bonus and granted six months' wages in a year of twelve months, without deducting the benefits received under the Joint Contributory Fund.
Finding of the Court:
The Calcutta High Court held that the Tribunal and the Appellate Tribunal erred in their findings on the issues of bonus and increment in rates and grades. The Court found that the Tribunal failed to consider the relevant factors in calculating the bonus, such as the available surplus, the bonus paid by other engineering concerns in the vicinity, and the joint contributory fund. The Court also held that the Tribunal erred in calculating the increment in rates and grades by ignoring the other benefits received by the workmen, such as dearness allowance. The Court quashed the findings of the Tribunals on these issues and issued a writ of certiorari and a writ in the nature of mandamus directing the respondents not to give effect to the same.
Issues: 1. Whether the Tribunal and the Appellate Tribunal erred in their findings on the issues of bonus and increment in rates and grades? 2. Whether the Tribunal failed to consider the relevant factors in calculating the bonus? 3. Whether the Tribunal erred in calculating the increment in rates and grades by ignoring the other benefits received by the workmen?
Ratio Decidendi: 1. The Tribunal and the Appellate Tribunal erred in their findings on the issues of bonus and increment in rates and grades. 2. The Tribunal failed to consider the relevant factors in calculating the bonus, such as the available surplus, the bonus paid by other engineering concerns in the vicinity, and the joint contributory fund. 3. The Tribunal erred in calculating the increment in rates and grades by ignoring the other benefits received by the workmen, such as dearness allowance.
Final Decision: The Calcutta High Court quashed the findings of the Tribunals on the issues of bonus and increment in rates and grades and issued a writ of certiorari and a writ in the nature of mandamus directing the respondents not to give effect to the same.
( 1 ) THE petitioner is the National Carbon Co. (India) Ltd. , a well-known company engaged in the manufacture of "eveready" brand batteries and similar goods. In the year 1949, some of the workmen of the petitioner Company demanded bonus. Following upon this demand, the petitioner Company introduced a fund called the Joint Contributory Fund. This is a fund to which the workmen make contribution at a certain rate and the Company makes its own contribution. It is in the nature of a savings fund, the rules whereof are set out in annexure 'b' to the petition. It will appear therefrom that contribution to this fund is optional on the part of the workmen, and in case of discharge on account of misconduct the Company is not liable to make any contribution. On or about the 15th of January, 1951 the workmen through their representatives entered into an agreement or settlement with the petitioner Company in the course of conciliation proceedings. The agreement provided that it settled all claims of the workmen, and would be in force until the 26th August, 1952 and that during the subsistence of the settlement no other demands regarding wages, allowances, remuneration, payment, gratuities or bonuses of any kind were to be made.
( 2 ) SECTION 19 of the Industrial Disputes Act lays down the period of operation of such a settlement. The relevant provision runs as follows:"19 (1) A settlement arrived at in the course of a conciliation proceeding under this Act shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute. (2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months, and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. "
( 3 ) ON the 6th of September, 1952 the respondent No. 6 served a notice in writing on the petitioner Company informing the petitioner of its intention to terminate the said settlement. On the 6th September, 1952 the respondent No. 6 served a notice claiming bonus equivalent to four months' earnings plus 50 per cent of the profit. The word 'earnings' has been defined in the Rules set out in Annexure 'b' and is as follows:--"earnings", means only the fixed monthly salary or wages received by each employee from the Company and, in the case of an employee engaged in piece or time work the actual amount of the wages received by him in any month in respect of the amount of work done or of the number of hours worked respectively and does not include any acting, officiating personal or dearness allowance, night allowance, overtime payment, bonus commission or other remuneration or profit whatever, derived by an employee by any means outside his fixed ascertained salary or wages. "
( 4 ) AS I have said above, the workmen, or at least a substantial part thereof, terminated the settlement arrived at between the parties, and there being a dispute, the Government of West Bengal, by an order dated the 21st May, 1953 being Order No. 1858 Dis/d/10l-57/53 read with an addendum dated the 30th July, 1953 referred the dispute to the Fifth Industrial Tribunal, West Bengal. The disputes referred to adjudication were as follows: (1) Increment in rates and grades; (2) Bonus; (3) When the workman is transferred to a different job whether his rates or wages, etc. , should remain unchanged or not.
( 5 ) ON the 16th of August, 1355 the Tribunal made its award. In this application we are only concerned with the first two issues, as it is in respect of these two issues that there has been a challenge. With regard to issue No. 1, the Unions preferred a clai
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
