Incentive bonus payable to employees as a term of a tripartite agreement is 'wages' within the meaning of S. 2 (22) of the Employees' State Insurance Act, 1948.

1. THE petitioner-company at the material time had a factory at No. 99, Dr. Abani Dutta Road, howrah. It is undisputed that the Employees' state Insurance Act, 1948 (hereinafter called the said Act) applied to the said factory of the petitioner and the persons employed therein were " employees " as defined by S. 2 (9) of the said Act. The petitioner has claimed that it had been regularly depositing contributions in respect of the " wages" paid to the said employees in accordance with the provisions of the Employees' State Insurance Act.

2. ON June 8, 1970 there was a Memorandum of Settlement between the petitioner-company and its workmen for resolving outstanding disputes. The Conciliation Officer, Government of West Bengal also signed the said Memorandum of Settlement. It is not necessary for the present purpose to refer to the terms of the said settlement relating to grade, scales of pay, dearness allowance, etc. The Term No. 54 of the said settlement provided " the incentive scheme shall be as detailed in Annexure III. " the Annexure 111 to the said Memorandum of settlement contained detailed provisions relating to payment of incentive bonus both for hourly rated workers and for monthly paid staff and sub-staff.

The case of the petitioner was that the said incentive/production bonus paid by it to its employees was not "wages" and therefore, no contribution was payable by the petitioner under the said Act to the Employees' State insurance Corporation. On the other hand, the employees' State Insurance Corporation claimed that the said incentive/production bonus paid to petitioner's employees was covered by the expression "wages" defined in S. 2 (22) of the said Act and therefore, the Corporation repeatedly demanded immediate payment of the contribution upon the said incentive bonus and threatened legal action in case of default of making such contribution. The petitioner has obtained the present Rule inter alia, for commanding the respondent No. 1 not to demand contribution to the Corporation in respect of the incentive bonus paid by the petitioner to its workmen and further for commanding them not to enforce, execute, proceed with the demand notices for enforcing payment of contribution upon the incentive bonus paid by the petitioner to its workmen.

3. MR. Tapas Banerjee, learned advocate for the petitioner, has submitted that the incentive bonus paid by the petitioner was not "wages" as defined in S. 2 (22) of the said Act. He further submitted that the point whether or not incentive bonus was wages has been now settled by the decision of S. C. Ghose and R. N. Pyne, JJ. in Regional Director, W.B. Region, e. S.I.C. and others v. Bengal Potterier Ltd., (1978) Labour and Industrial cases 793. The division Bench in the said case had dismissed the appeal preferred by the Regional Director of the Employees' State Insurance Corporation against the judgment of Sabyasachi Mukherjee. J. in Bengal Potteries Ltd. v. Regional Director, w. B. Region, E. S. I. C. and others, (1973) Labour and Industrial cases 1328. The learned advocate for the petitioner in this connection has also placed reliance upon the judgment of N.C. Mukherji and Guha, JJ. in M/s. Hindustan motor's Ltd. v. E. S. I. Corporation and others, (1979) 1 C. I. J. 503, N.C. Mukherji and Guha, JJ. in M/s. Hindusthan Motor's case (supra), held that over-time payments were not wages under the Employees' State Insurance Act. The other submission of Mr. Banerjee, learned advocate for the petitioner, was that a dispute having arisen between the petitioner-company and the Corporation as to whether the incentive bonus paid to employees of the petitioner was wages and whether any contribution in respect of the said incentive bonus was payable by the petitioner, the Corporation ought to have referred the said dispute to the Employees' insurance Court for decision under S. 75 of the Employees' State Insurance Act, 1948.

4. I may first take up the consideration of the aforesaid