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Gujarat High Court
Judgename :K.M.MEHTA, R.K.Abichandani
UNION OF INDIA - Appellant
Versus
KISHOR LAKHA - Respondent
L.P.A. 128 of 1998
Decided On : 12/06/2003
The word bonus is not defined in the provisions of the Payment of Bonus Act, 1965. However, the true nature and character of the workmens claim for bonus against their employer is well settled. Bonus is not a mere matter of bounty gratuitously made by the employer to his employees; nor is it a matter of deferred wages. As held by the Supreme Court, the term bonus is applied to a cash payment made in addition to wages. It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained. The claim for bonus cannot be effectively made unless two conditions are satisfied: (i) the wages paid to workmen fall short of what can be properly described as living wages, and (ii) the industry must be shown to have made profits which are partly the result of the contribution made by the workmen in increasing production.
[Para 7]
(b) Payment of Bonus Act, 1965 (Central Act 21 of 1965) - Secs. 8, 9 & 10 - Industrial Disputes Act, 1947 (Central Act 14 of 1947) - Sec. 33(c)(2) - Bonus - Entitlement - Only requirement is that employee concerned should have worked in the establishment at least for not less than thirty working days in an accounting year - Every employer has to pay bonus unless he has disqualified himself as provided under Sec. 9 of the Bonus Act - The workman would be entitled to prefer application under Sec. 33(c)(2) of the Industrial Disputes Act if he is deprived of the bonus amount for which he is entitled to receive.
Under Sec. 8 of the Payment of Bonus Act, 1965, every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of the said Act, provided he has worked in the establishment for not less than thirty working days in that year. This provision relates to the eligibility for bonus for which the only requirement is that the employee concerned should have worked in the establishment at least for not less than thirty working days in an accounting year. It has been provided by Sec. 10 of the said Act that every employer shall be bound to pay to every employee, in respect of the accounting year, a minimum bonus which shall be 8.33 percent of the salary of wage earned by the employee. Thus, the payment of bonus is a statutory obligation and it is not a bounty or an ex gratia payment. Section 9 deals with disqualification for bonus and provides that an employee who is dismissed from service for fraud, riotous or violent behaviour, theft, misappropriation or sabotage shall be disqualified from receiving the bonus.
[Para 8]
When bonus is payable to an employee and is not paid, he is deprived of money which he is entitled to receive. The workman would, therefore, be entitled to prefer an application under Sec. 33(C)(2) of the Industrial Disputes Act, 1947, if he is deprived of the bonus amount by the employer, for recovering the same.
[Para 9]
(c) Constitution of India, 1950 - Art. 226 - Back-wages - Bonus - When C.A.T. directed reinstatement of workman with back-wages then besides wages order includes all monetary and other benefits with bonus having accrued during the period - They would be treated in continuous service as if the order of termination was never passed.
The word back-wages in the order of the Tribunal in the said context has to be given a wide meaning and would, in our opinion, include all monetary and other benefits to which the employee would have been entitled to, had his services not been terminated.
[Para 10]
The order of termination, which is set-aside, as being illegal and void, cannot be given, even such limited recognition for the purpose of considering the eligibility for bonus under Sec. 8 of the said Act. It would, therefore, necessarily follow that an employee, whose order of termination is set-aside and who is ordered to be treated in service as if it was never made and to whom back-wages are payable, would be deemed to be working in the establishment within the meaning of Sec. 8 of the said Act so as to entitle him to be considered as eligible for bonus even for the period during which he may not have actually worked.
[Para 12]
( 1 ) THESE appeals are directed against the common judgement and order dated 22-12-1997 of the learned Single Judge, dismissing a group of petitions filed by the appellants against the order passed by the Labour Court under Section 33 (C) (2) of the Industrial Disputes Act, 1947, by which the Labour Court, Godhra directed the appellants to pay the bonus amount of Rs. 3,000=00 to each of the workmen with interest at the rate of 12% and costs of Rs. 5,000=00 to the Union.
( 2 ) THE respondents - workmen, in all these matters, had approached the Central Administrative Tribunal challenging the termination of their services as casual labourers. The Central Administrative Tribunal, by its common order dated 8th June 1989, held that the action of the authorities in terminating their services was violative of Section 25-N of the said Act. The termination orders were, therefore, set-aside and the appellants were directed to reinstate them and pay their backwages within three months from the date of the order "by treating them to be in continuous service of the respondents". Admittedly, the Special Leave Petition filed against the said decision of the Tribunal was rejected by the Honble the Supreme Court on 16-10-1989 and the directions of the Tribunal became final. It, however, appears that, while reinstating these workmen, as per the direction of the C. A. T. and paying them arrears of wages, bonus amounts for the period from the date of termination till reinstatement were not paid. These workmen, therefore, filed recovery applications before the Labour Court, Godhra under Section 33 (C) (2) of the said Act. 2. 1 the Labour Court, Godhra, by its order dated 14-8-1987, held that since these workmen were reinstated in service pursuant to the directions of the Central Administrative Tribunal with all backwages and continuity in service, there was no reason to deny them the bonus amount which was paid to the other employees during the period in question. It was also held that these workmen were not disqualified from getting the bonus under the provisions of Section 9 of the Payment of Bonus Act, 1965. The Labour Court relied upon the decision of the Bombay High Court in Goa Bottling Pvt. Ltd. v. Pradip Desai, reported in 1992 II C. L. R. 490, the decision in Dhandapani v. Salem Co-operative Wholesale Stores Ltd. , reported in 1995 (1) L. L. J. 635, and the decision of this Court in Project Manager, Ahmedabad Project, ONGC v. Sham Kumar Sehgal, reported in 1995 (1) GCD 97 (Guj), in support of its findings.
( 3 ) IN the group of petitions preferred against the decision of the Labour Court, directing payment of bonus, the learned Single Judge, observing that the present appellants were unable to show any provision from the Payment of Bonus Act, 1965 (hereinafter referred to as "the said Act"), under which these workmen were not entitled for benefit of bonus, and that, no interference was called for in the order passed by the Labour Court, rejected the petitions. It was, however, made clear that in case the services of any of the respondent workmen were terminated, then he would be entitled to the bonus under the order of the Labour Court till the date he remained in service.
( 4 ) THE learned counsel for both the sides have raised their contentions by referring to the record of Letters Patent Appeal No. 128 of 1998 treating it as the lead matter and have stated that all other matters are identical.
( 5 ) IT has been contended on behalf of the appellants that, during the period that the orders of termination of these respondents - workmen were operative, they had not actually worked, and therefore, they were not entitled to any bonus in view of the provisions of Section 8 of the said Act. It was further argued that the computation of working days was required to be done only as per the provisions of Section 14 of the said Act and therefore, the period during which their services were terminated could not be computed t
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