1. An Authority constituted under the Payment of Wages Act decided to entertain,a claim under Section 25P, Industrial Disputes Act,on the ground that a claim for compensation put forward by a retrenched employee falls within me ambit of the expression 'wages' as defined in Section 2, Payment of Wages Act. The employeris dissatisfied with the order and has come to this Court in revision.
2. The expression 'wages' as defined in Section 2(vi) of the Act of 1936:
'means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, expressor implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed, or otherwise, to a person employed in respect of his employment or of work done in such employment, & includes any bonus or other additional remuneration of the nature aforesaid which would be so payable, and any sum payable to such person by reason of the termination of his employment. .....'.
3. This definition may for convenience be split up into three portions. The first clause declares that wages means all remuneration, which would, if the terms of the contract of employment, express or implied were fulfilled, be payable to a person employed in respect of his employment. This clause presents no difficulty whatsoever, for it declares in unambiguous language that an employee is entitled to receive the wages in accordance with the terms of his contract.
The second clause enacts that the expression 'wages' shall include any bonus or other additional remuneration of the nature aforesaid which would be so payable, i.e., payable in accordance with the terms of the contract. The third clause declares that the expression 'wages' shall include 'any sum' payable to such person by reason of the termination of his employment. The language of this clause is wide enough to embrace not only a sum payable to an employee under the terms of a contract -- 'A. R. Sarin v. B. C. Patil', AIR 1951 Bom 423 (A) but also a sum payable to him under the provisions of a statute.
4. Assuming for the sake of argument that the amount payable to an employee under Clause 3 mentioned above must be restricted to the amount which has been guaranteed to him under the terms of the contract, express or implied, even then it seems to me that a statutory provision in regard to a sum payable to an employee by reason of the termination of his employment must be deemed to be an implied term of the contract.
The expression 'implied contract' applies not only to contracts which are implied in fact, that is which may be inferred from the conduct or presumed Intention of parties, but also to contracts which are implied in law, that is contracts where the liability arises from an implication of law and from facts and circumstances independent of agreement or presumed intention of parties (paragraph 289 of Halsbury's Laws of England, 3rd Edition, Volume 8.)
As pointed out by an American Judge, in the case of contracts implied in fact the contract defines the duty while in the case of contracts implied in law the duty defines the contract -- 'First National Bank v. Matlock', 99 Okla 150 (B). It follows as a consequence that when the legislature declares that an employer shall make certain payments to an employee whose services are terminated, the law imputes to the employer a promise to fulfil that obligation. -- 'Bailey v. New York Central & Hudson River Railroad Co.', (1875) 22 Law Ed 840 (C): -- 'Brainard v. Hub bard', (1871) 20 Law 'Ed 272 (D) and -- 'Ernest Fledter v. Mary Curtis', (1863) 17 Law Ed 273 (E).
5. For these reasons, I would uphold the order of the Authority and dismiss the petition. There will be no order as to costs.