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1997 Supreme(Ker) 467
High Court of Kerala
P.A. Mohammed, S. Marimuthu, JJ.
K R Jagadeesan - Appellant
Versus
Indian Crump Rubber Factory & Anr - Respondent
M.F.A. No. 388 of 1989
Decided On : 06-03-1997
Bonus can be included in wages for the purpose of calculating compensation payable to a workman who has suffered permanent disablement under the Workmen's Compensation Act.
Headnote:
Workmen's Compensation Act - Bonus - S.30, S.22, S.2(m), S.4, S.5 - The court discussed the definition of 'wages' under S.2(m) and its interpretation in relation to the inclusion of bonus. It referred to the Payment of Bonus Act, 1965 and various judicial interpretations to establish that bonus can be included in wages for the purpose of calculating compensation payable to a workman who has suffered permanent disablement. The court held that the claimant is entitled to compensation including the bonus, modifying the commissioner's order accordingly.
Fact of the Case:
The appellant sustained injuries in a work-related accident and claimed compensation. The commissioner determined the compensation based on the monthly wages, excluding the bonus paid to the appellant. The appellant appealed against the inadequacy of the compensation.
Finding of the Court:
The court found that the bonus paid to the appellant should be included in the calculation of compensation as it constitutes 'wages' under S.2(m) of the Workmen's Compensation Act.
Issues: The main issue was whether the 'bonus' paid to an employee should be considered while determining the 'wages' as defined in S.2(m) of the Act.
Ratio Decidendi: The court interpreted the definition of 'wages' under S.2(m) and referred to the Payment of Bonus Act, 1965 and various judicial interpretations to establish that bonus can be included in wages for the purpose of calculating compensation payable to a workman who has suffered permanent disablement.
Final Decision: The court allowed the appeal, holding that the claimant is entitled to the compensation including the bonus, modifying the commissioner's order accordingly.
P.A. Mohammed, J.
1. This is an appeal filed under S.30 of the Workmen's Compensation Act, 1923 (hereinafter referred to as 'the Act') against an order passed by the Workmen's Compensation Commissioner (Deputy Labour Commissioner, Kottayam) under S.22 of the Act.)
2. The main question that arises for determination in this appeal is whether 'bonus' paid to an employee can be taken into consideration while determining the 'wages' as defined in S.2(m) of the Act.
3. The short facts required for the decision of the above question are as follows: The appellant is the applicant in WCC No. 10 of 1988 on the file of the Workmen's Compensation Commissioner, Kottayam. First respondent was the 'employer' and the second respondent was the insurer of the workman at the time of accident. While the appellant was working on a hammer roller machine in the factory on 27.7.1987 he sustained certain injuries by an accident. The injuries are as follows:
i) Loss of index, middle and ring fingers at the metacarpophalangeal joint level.
ii) Crush injury on the thumb and little fingers with extensive skin loss.
That the sustaining of injuries was immediately reported to the first respondent. Since the injuries were sustained in the course of his employment under the first respondent, workman was entitled to compensation of Rs. 1,04,960/-. However, the first respondent refused to pay the above amount though demand was made "in that behalf. That was the background for the filing of the application before the commissioner by the appellant workman claiming the above compensation for personal injuries caused to him by the accident.
4. The commissioner after the enquiry came to the conclusion that the workman is entitled to a compensation of only Rs. 44,506.90 and accordingly passed an award on 27.2.1989 directing the insurer, New India Insurance Company Limited, to deposit the above sum with simple interest at 6% per annum. The applicant being aggrieved by the inadequacy of the above compensation has filed this appeal.
5. Heard the learned counsel for the appellant and also the first respondent employer.
6. In substance, the contention of the appellant is, the 'monthly' wages determined by the commissioner for working out the lump sum compensation payable to the appellant is not just or proper. The commissioner has found 'monthly wages' of the appellant at the relevant time as Rs. 428/-. In order to arrive at this figure, the commissioner has taken total actual wages for a period of twelve months as per Ext. R1 namely, Rs. 5141/- and then divided by twelve. Thus total compensation payable to the appellant was fixed as Rs. 44,507/-. This fixation according to the counsel, does not conform to the provisions contained in S.2(m), 4 and 5 of the Act.
7. S.5 deals with method of calculation of wages. It is an admitted case that the appellant workmen had been in the service of the employer during a continuous period of not less than twelve months immediately preceding the accident and therefore clause (a) of S.5 governs the question here. The said provision is as follows:
"5. Method of calculating wages.-- In this Act and for the purposes thereof the expression "monthly wages" means the amount of wages deemed to be payable for a month's service (whether the wages are payable by the month or by whatever other period or at piece rates), and calculated as follows, namely-
(a) Where the workman has, during a continuous period of not less than twelve months immediately preceding the accident, been in the service of the employer who is liable to pay compensation, the monthly wages of the workmen shall be one twelfth of the total wages which have fallen due for payment to him by the employer in the last twelve months of that period;"
The expression 'monthly wages' contained in the main part of the Section means the amount of wages deemed to be payable for a month's service whether the wages are payable by the month or whatever other period or at piece rates. The monthly wage
