Sanjay Kishan Kaul, J.

1. The benefit extended to workmen in the appellant/Corporation in the form of incentive payment for extra performance during regular working hours is sought to be included as part of basic wage in terms of the impugned order giving rise to the present appeal.

2. The factual position is really not in dispute. The Appellant Corporation is engaged in the business of transportation of coal by sea and unloading the coal in Tuticorin for the Tamil Nadu Electricity Board to generate power for supply of electricity. The appointment orders show that the initial appointment as trainees for a period of two months is on stipendiary basis and after confirmation, they are appointed in the appropriate scale of pay with dearness allowance admissible under the Rules of the Appellant Corporation. In addition to these emoluments, the workmen are eligible for monthly incentive payments on the basis of the appellant's scheme of incentive payments in force at the time. This incentive payment is to be on the basis of the output from the cranes during each shift. For clarity, this incentive is payable not for any extra hours work, but in the regular working time period. Thus, the incentive would vary from workman to workman dependent on the output being more than the benchmark for such incentive payment. The incentive would thus be payable to some and not to the others and even to the ones to whom it is payable, it would be dependent on the work done.

3. We are concerned with the effect of this incentive payment in the context of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter to be referred to as “the said Act”). Section 6 of the said Act provides for contributions to be paid by the employer to the fund under the provisions of the Provident Fund Scheme and has to be calculated as percentage of the basic wages.

4. The “basic wages” are defined under Section 2(b) of the said Act, which reads as under:

“Section 2(b) 'basic wages' means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-

(i) the cash value of any food concession;

(ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;

(iii) any presents made by the employer.”

5. The calculation of the provident fund contribution is on the basic wages and in that context, the question which arises is as to whether the incentive payment is part of such basic wages.

6. It is the view of the employees that since incentive payment is not specifically excluded from the basic wages, it forms a part of it. On the other hand, it is the contention of the appellant that bonus has been specifically excluded from the basic wages and such incentive payment is nothing else but a production bonus.

7. The employees' union took up the matter with the office of the Provident Fund Commissioner and, thus, a notice was issued from the said office to the appellant for deciding the issue with regard to reckoning of incentive bonus for purposes of provident fund deduction in respect of the appellant. The Assistant Provident Fund Commissioner held an enquiry under Section 7-A of the said Act and came to the conclusion that the incentive paid to the employees was to be reckoned for purposes of calculation of the provident fund, as per the order dated 19.1.1996.

8. The appellant, however, took up the matter with the Regional Provident Fund Commissioner in pursuance of the order passed by the Assistant Provident Fund Commissioner raising various issues and requesting for reconsideration of the decision taken by the Assist