Payment of bonuses must align with statutory provisions, and without a formal agreement, alternative payment schemes do not substitute for mandated bonuses.

ORDER

This Writ petition has been preferred as against the order passed by the Industrial Tribunal, Chennai in I.D. No.21 of 2025 dated 04.09.2023, wherein the respondent Union herein have raised an industrial dispute before the Labour Court and the same was allowed. Aggrieved by the said Award, the present Writ petition has been filed by the Management.

2. The respondent Union have raised an industrial dispute alleging that the petitioner Management is engaged in the business of manufacturing storage solutions, Beam, Angle, Upright, Panels and supplies to leading companies and more than 600 workers were employed out of which 115 workers were treated as permanent employees, 70 workers were treated as trainees, 80 workers were treated as Apprentices and the rest of the workers were treated as contract labourers. The Management is paying meagre wages to its workers and during the year 2013-2014, earned huge profit, but paid only minimum bonus of 8.33% to the workers. The workers were not given bonus considering the higher production given. Therefore, the respondent Union raised an industrial dispute and conciliation proceedings failed, thereby, the Government referred the dispute for adjudication that whether the demand of the respondent Union for 20% bonus for the accounting year 2013- 2014 is justified or not.

2.1. The Management denied the allegations and according to the petitioner Management, they are governed by the Payment of Bonus Act and 110 workers are governed by the provision of Production Incentive based on their individual performance (PP) and team award based on Economic Value Added (EVA) and business performance. The two schemes were extended to the employees as part of their service conditions and the amounts were paid in lieu of bonus. The PP Scheme is based on actual performance, which is evaluated in each fiscal year and payments were made according to the performance. As far as EVA assessment is concerned, the performance is evaluated in each fiscal year and payments are made according to the performance. Therefore, the payments have to be reckoned to be covered under Section 31A of the and therefore, the dispute is not maintainable according to the Management.

2.2 . Before the Labour Court, on the side of the respondent Union, no one was examined as witness and no any documents were marked. On the side of the petitioner Management, they examined two witnesses and Ex.M.1 to Ex.M.20 were marked. Thereafter, the Labour Court adjudicated the dispute and passed an Award that the workers are entitled to a maximum bonus of 20% for the accounting year 2013-2014 over and above the annual variable remuneration paid to the workers under the PP and EVA scheme for the said accounting year. Aggrieved by the said order, the Management filed the present Writ petition.

3. The learned counsel appearing for the Writ petitioner Management would submit that the petitioner Management is engaged in the manufacturing of refrigerators, compressors, washing machines, office and home furniture etc., The persons who are employed in the Management Cadre are governed by the Contract of Employment (Appointment Letter) and the policies framed by the petitioner / Management from home to home. The employees covered under this dispute have been selected and working in the entry level Management Cadre – knowledge Band (K-Band) of the organizational set up of the company in the capacity of Senior Technical Staff Associates / Associate Officers after completion of selection process, having accepted all the terms and conditions and salary structure applicable to the Management Ca