The main legal point established in the judgment is the interpretation of 'basic wages' and its application to the 'attendance bonus' in relation to the Employees Provident Funds and Miscellaneous Provisions Act, 1952.

JUDGMENT :

This appeal has been preferred against the order of the learned single Judge, dated 11.05.2022, passed in W.P.No.18104 of 2012, whereby the order passed by the second respondent Appellate Tribunal was confirmed.

2. The issue in this case revolves around as to whether ''attendance bonus'' should come within the purview of ''basic wages'' in terms of Section 2 (b) (ii) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, in short, ''the Act''.

3. For the sake of convenience, the expression of ''basic wages'' under Section 2 (b) of the Act is extracted below :

''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 present made by the employer.

4. The main contention of the appellant is that ''attendance bonus'' has to be included as a part of basic wages as it cannot and under any stretch of imagination fall under the exclusion clause and that will not attract Section 6 of the Act.

5. Section 6 of the Act reads as under :

''6. Contributions and matters which may be provided for in Schemes.— The contribution which shall be paid by the employer to the Fund shall be ten per cent. of the basic wages, dearness allowance and retaining allowance (if any) for the time being payable to each of the employees (whether employed by him directly or by or through a contractor), and the employees’ contribution shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, be an amount exceeding ten per cent of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section:

Provided that in its application to any establishment or class of establishments which the Central Government, after making such inquiry as it deems fit, may, by notification in the Official Gazette specify, this section shall be subject to the modification that for the words ten per cent, at both the places where they occur, the words twelve per cent shall be substituted:

Provided further that where the amount of any contribution payable under this Act involves a fraction of a rupee, the Scheme may provide for the rounding off of such fraction to the nearest rupee, half of a rupee or quarter of a rupee.''

6. As per the above Section 6 of the Act, the employer has to make contribution to Employees Provident Fund and any other allowances falling under this Section need to be paid.

7. The Employees Provident Funds and Miscellaneous Provisions Act, 1952, alone defines the word ''basic wages'' and no other labour enactment defines the said word, but only refers to ''wages''.

8. A reading of Section 6 of the Act would make it clear that even though dearness allowance is excluded under the definition ''basic wages'', the contribution has to be paid in terms of Section 6. Whether Clause 29 of the Employees Provident Fund Scheme is in conformity with Section 6 needs to be answered, as it appears that the said provision in the Scheme runs counter to Section 6 of the Act. However, we are not answering the said issue in the present appeal.

9. In the instant case, the employee has been paid bonus every month provided he reported for work on all six days of a week. If he failed to report so, then, attendant bonus was paid on pro-rata basis. It is one way of making an