1. The point for determination in this application for stay is whether the bonus granted to a workman is exempt from attachment under Section 60(h) of the Code of Civil Procedure. .
2 The facts are:-- T. Viswanatha Nair employed in VIMCO at Tiruvothivur filed a suit against Munuswami, the petitioner before us, for Rs. 400 odd. This Munuswami had been granted a bonus of about Rs. 200 by the West India Match Factory in which he was employed. This Viswanatha Nair filed an application for attachment before judgment and attached that sum. Munuswami has thereupon filed this revision petition and obtained an order of interim stay,
3. In order to decide this controversy we must first of all find out the meaning of the terms 'wages' and 'bonus' as can be gathered from (a) standard lexicons, (b) various Acts, and (c) case-law on the subject,
4. Meaning of the word 'Wages''. Webster (International Dictionary of English language 1927). 1. Pay given for labour, usually manual or mechanical, at short stated intervals, as distinguished from salaries or fees.
2. Theoretical Economics. The share of the annual produce or national dividend which goes as a reward to labour, as distinct from the remuneration received by capital in its various forms. This economic or technical sense of the word wages is broader than the current sense, and includes not only amounts actually paid to labourers, but the remuneration obtained by those who sell the products of their own work, and the wages of superintendence of management, which are earned by skill In directing the work of others.
Funk & Wagnalls: 'Payment for service rendered, especially the pay of artizans or labourers receiving a fixed sum per day, week, or month, or for, a certain amount of work (piece work); hire, usually in the plural, often construed as singular.
Plural Econ. The remuneration received by labour in its broadest sense as distinguished from that received by capital, and including the expenses incurred for superintendence and management, called respectively wages of superintendence and wages of management. (Ballentine, Law Dictionary, II Edn. 1948). As the word is employed in common parlance, it refers specifically to the payment made for manual labour, or other labour of menial or mechanical kind, as distinguished from 'salary' and from 'fee' which denote compensation paid to professional men.
In its application to labourers and employees, it conveys the idea of subordinate occupation which is not very remunerative, of not much independent responsibility, but rather subject to immediate supervision. 35 Am. Jur. 496.
As the word is used in the exemption statutes, it is intended to include what an employer owes his employee for personal services rendered in that relation, and it matters not whether it is called wages or salary. 22 Am. Jur. 57.
Burrows: (Words and Phrases, Judicially defined, 1943) 'By codicil a testator bequeathed two years ''wages' to his head gardener. The question is what the testator meant by the word 'wages'. I can find no assistance from the Truck Acts or the Workman's Compensation. Acts, nor is there any authority, curiously enough, which covers the question. Suppose a friend had asked the testator what he paid his head gardener. No doubt the testator would have said that he paid King . 3, 9 s. 9 d. a week, and he might have added: 'Remember that we are in the country and he has a house'. In the ordinary use of the language the testator would have mentioned the cash payment made week by week ..... It appears to me that in the gift in the 14th codicil cash wages were meant'. Re Peacock, Public Trustee v. Birchenough (1929) 45 TLR 301 (A), per Clauson J. at page 302. In re Earle's Shipbuilding & Engineering Co., Barclay and Co. V. Earle's Shipbuilding & Engineering Co., (1901) W N 78 (B), Palace Shipping Co. Ltd. v. Caine, 1907 AC 386 (C); Archer v. James, (1859) 2 B & Section 67 (D); Gordon v. Jennings, (1882) 9 QBD 45 (E).
Wharton: The compensation agreed upon by a master to be paid to a servant, or any other person hired to do work or business for him.
Wages of any 'servant, labourer, or workman'cannot be attached to satisfy judgments -- WagesAttachment Abolition Act, 1870 (33 and 34 Vict. C.30).
Murray (Now English dictionary). A payment to a person for services rendered. Formerly used widely, e.g., for the salary or fee paid to persons of official or professional status. Now (exc. in rhetorical language) restricted to mean: the amount paid periodically, esp. by the day or week or month for the labour or service of a workman of servant.
Stroud's Judicial Dictionary, Vol. 4, p. 3243: 'Though this word might be said to include payment for any services, yet, in general, the word 'salary' is used for payment of services of a higher class, and 'wages' is confined to the earnings of labourers and artisans' (Per Grovo J. in (1882) 51 LJ. QB 417 (E). See hereon per Parke B. Riley v. Warden (1848) 2 Ex. 59 (F); per Bramwell B. Sleeman v. Barrett, (1864) 33 LJ Er. 153 (G) and Ingram v. Barnes, (1857) 26 LJ QB 319 (H). In that case, Bramwell B. said 'Whatever definition one gives to the term 'wages', a portion at what the plaintiff here gets is 'profits', made and makeable by the employment of other people under him. If a portion is that, the whole is not wage', see also per Cockburn C. J. same case. It would therefore seem that 'wages' are the personal earnings of labourers and artisans.
5. Meaning of the word Bonus: Meaning of the word:
Murray's: The Boon or gift over and above what is normally due as a remuneration to the receiver, and which is therefore, something wholly to the 'Good'.
(a) Money or its equivalent, given as a premium Or as an extra or irregular remuneration in consideration of offices performed, or to encourage their performance; sometimes merely an euphemism for douceur, bribe.
(b) An extra dividend paid to shareholders in a joint stock company from surplus profits; a portion of profits of an insurance company distributed, 'pro rata' to the policy holders.
(c) A gratuity paid to workmen, masters of vessels etc. over and above their stated salary. Webster's: Something given in addition to what is ordinarily received by, or strictly due to, the recipient;
(a) A premium given for a loan, or for a charter, or other privilege granted to a company.
(b) An extra dividend to the shareholders of a company, out of accumulated profits.
(c) Money or other valuable given in addition to an agreed compensation.
(d) Life Insurance -- an addition or credit allotted to policy holders out of accumulated profits, as in mutual companies usually, by the reduction of a premium;--In America usually called dividend.
Punk and Wagnall's: (1) An allowance in addition to what is usual, current, or stipulated; as a Bonus on stocks.
(2) Compensation for the obtaining of a loan. Ballentine's: An absolute gift of donation. The word is used in some connections as meaning a gratuity, a voluntary donation, a gift, but that is not Webster's definition. He defines it as 'a premium' given for a loan or charter or other privilege granted to a company as the bank paid a bonus for its charter; a sum paid in addition to a stated compensation, Kenicott v. Supervisors of Wayne Co. (1873) 21 Law Ed. 319 (I).
As applied to the state aid to a rail road given for building its road in the state, the word does not imply a gift or a gratuity but a sum paid for the services, or upon a consideration in addition to or in excess of that which would ordinarily be given (1873) 21 Law Ed.319 (I).
The term is also applied to that share or the portion of the earnings of a rail road which the State requires the road to pay to the State as a condition in granting the rail road company its charter: Baltimore and Ohio Railroad Co. v. State of Maryland. (1875) 22 Law Ed. 678 (J).
In employment contracts, the term conveys an idea of something which is gratuitous or which it raav be claimed is gratuitous, over and above the prescribed wage which the employer agrees to pay.
Burrows:-- 'The sole question in this case is whether or not a bonus agreed to be paid to a seaman as recorded in the ship's articles is to be treated as wages, whether it can be regarded as something apart from wages. 'Bonus' in such a case as the present one is in truth nothing else but a euphemism for 'addition to wages'. There may be special reasons for calling it a bonus. The definition of the word wages in Section 742 of the Merchant Shipping Act, 1894, makes it clear that wages include emoluments, and I hold a bonus also, although the statute does not expressly use the word bonus: Shelford v. Mosey, 1917 1 K. B. 154 (K).
It is hard to lay down any general rule as to what bonus is; but I think, that whatever comes from an accumulated fund which has either become too large or else unnecessary, is a bonus; but what is usually called so, being merely an extra dividend is not so in reality. Hollis v. Allan, 1866 12 Jur. N.S. 638 (L). In re Eddy, Stone Marine Insurance 'Co., 1894 WN 30 (M), Whartons (Law (Lexicon, XIV, Edn. 1938).
Premium or advantage; an occasional extra dividend; a gratuity. As to the respective rights of tenant for life and remaindermen is a bonus declared bv a company. In re Northage; Bills v. Barfield, (1891) 60 L J Ch 488 (N); Bouch v. Sproule, (1887) 12 AC 385 (O); Stroud's Judicial Dictionary, Vol 1 (3rd Edn, 1953) pages 318--319.
In 1894 WN 30 (M), Stirling J. adopted the definition of 'bonus' as given in the New English dictionary, viz, ' a boon, or gift, over and above what is nominally due as remuneration wholly to the good'; and, therefore, that a certificate for shares crossed with the words 'bonus' was notice to a transferee for value that they had been issued gratis; and, in a liquidation, he must be settled on the list of contributories.
'It may be a mere gift or gratuity as a gesture of goodwill, and not enforceable, or it may be something which an employee is entitled to on the happening of a condition precedent and is enforceable when the condition is fulfilled.'
(Per O'Conner J. in Great Western Garment Co. Ltd v. Minister of National Revenue, 1947 Es. C. H. 458 (P)).
6. The definition of 'wages' can also be gathered from the following Acts (a) The Payment of Wages Act 1936; (b) The Minimum Wages Act, 1948; (c) The Madras Shops and Establishments Act, 1947; and (d) The Workmen's Compensation Act, 1923.
The Payment of Wages Act, defines 'wages' as follows:
'Wages means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or 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, and 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, but does not include -- (a) the value of any house-accommodation supply of light, water, medical attendance or other amenity, or of any serviceexcluded by general or special order of the StateGovernment; (b) any contribution paid by the employer to any pension, fund, or provident fund;(c) any travelling allowance or the value of suchtravelling concession; (d) any sum paid to the person employed to defray special expenses entailedOn him by the nature of his employment; or (e) anygratuity payable on discharge.'
The Minimum Wages Act defines wages as follows:
'Wages' means all remuneration, capable of being expressed in terms of money, 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 or of work done in such employment, but does not include --(i) the value of -- (a) any house-accommodation, supply of light, water, medical attendance, or (b) any other amenity or any service excluded by general or special order of the appropriate Government; (ii) any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance; (iii) any travelling allowance or the value of any travelling concession; (iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (v) any gratuity payable on discharge.'
The definition of 'wages' given in the Madras Shops and Establishments Act, is the same as in the Payment of Wages Act.
The Workmen's Compensation Act defines 'wages' as follows;
'Wages includes any privilege or benefit which is capable of being estimated in money, other than a traveling allowance or the value of any travelling concession or a contribution paid by the employer of a workman towards any pension or provident fund or a sum paid to workman to cover any special expenses entailed on him by the nature of his employment.'
7. The English case law on the subject is summarised in Halsbury's Laws of England, 2nd Edn. Vol. 14, para 1227, page 650 in the following statement:--
'Any money or other thing had or contracted to be paid, delivered, or given as a recompense reward or remuneration for any labour done or to be done, whether within a certain time or to a certain amount, or for a time or an amount uncertain, is deemed to be the wages of such labour, Any agreement, understanding, device, contrivance, collusion or arrangement whatsoever on the subject of wages, whether written or oral, direct or indirect, to which the employer and workman are parties or arc assenting, or by which they are mutually bound to each other, or whereby either of them has endeavoured to impose an obligation on the other of them, is deemed to be a contract.'
8. The American Law on the subject is summarised in 67 Corpus Juris, pp. 284-285 as follows:
'It has been said that the word ''wages' has no fixed definite legal meaning, and that wages and loss of time are understood to be the same thing. As generally defined, however, the term means compensation for labour or services, which may be in the form of money paid or other value given, such as board, lodging or clothes; compensation or reward agreed upon by the master to be paid to a servant or to any other person hired to do business for him; compensation given to a hired person for his or her services; compensation paid or to be paid for services by the day, week, month or year, or other sub division of time, the amount to be ascertained by agreement or the proved going rate or market value of the same at the time and place rendered; consideration which an employer bestows upon one who is serving him in consideration of his services, and usually a consideration in money, 'and never applied in describing the gain, profit or recompense which accrues to one who is conducting a business of his own and on his own account; price paid for labour, reward of labour; specified sum for a given time of service; or a fixed sum for a specified piece of work; stipulated payment for services performed; sum of money periodically paid for services rendered; that for which one labours; that which is paid for a service rendered what is paid for labour; what the labourer earns by his own labour. The fact that a portion of the compensation is to some extent uncertain does not make such portion, when actually earned, any the less 'wages'. Also, the term may be employed as referring to a gage, a pledge, a stake. Sometimes the plural form of the word is used as singular.''
9. Having discussed the terms 'wages' and 'bonus', we have to consider Clause (h) of Section 60 Civil Procedure Code, which states that the wages of labourers and domestic servants, whether payable in money or in kind, shall not be liable to attach or sale in execution of a decree.
10. The case-law on the subject may now be briefly summarised. The wages of labourers and domestic servants are wholly exempt from attachment, A person is a 'labourer' within the meaning of this clause who earns his daily bread by persona] manual labour, or in occupations which require little or no art, skill or previous education. A person who spins cotton and receives wages according to the quantity spun is a 'labourer'. Similarly, coolies employed on railway or other works and paid by the number of baskets of earth carried are 'labourers.'
A clerk in one of the departments of a mill doing no manual labour cannot be regarded as a labourer or domestic servant. Where bonus is payable by agreement to an employee and depends on the kind of work which the employee is doing and on the number of days for which he has worked, such bonus is 'wages'; K.U. Kulkarni v. Ganpat Hiraji, : AIR1946Bom102 (S); Jivanlal v. Ramtuji Bhaiji : AIR1945Bom119 . (See D.V. Chitaley and N. Ramaratnam's the Fifty Years Digest. 1901--1950, Vol. III, note 27, pages 157-158 for a handy and accurate collection of case law on Wages, Section 60(h) C. P. Q).
In N. M. Shanmughasundaram Mudaliar v. Chidambaram Pillai : AIR1953Mad433 , this court held that bonus as such would mean ex-gratia payment.
In Harji Malla v. Karsanji AIR 1954 Saw 19 (V), it has been held that bonus paid to the labourers employed in a mill from time to time is part of their wages within the meaning of Section 60(h) C. P. Code and as the first Explanation to the section makes it clear that wages are exempt from attachment and sale whether before or after they are payable, the amounts of bonus cannot be attached as arrears in the hands of the employer : AIR1945Bom119 , relied on and Union of India v. Smt. Hiradevi : 1SCR765 (W) distinguished.
In Munir Mills Co. Ltd v. Suit Mills Mazdoor Union, Kanpur : (1955)ILLJ1SC (X), it has been held:
'The term bonus is applied to a cash payment made in addition to wages. It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained.
There are two conditions, which have to be satisfied before a demand for bonus am be justified and they are (1) when wages fall short of the living standard and (2) the industry makes huge profits part of which are due to the contribution which the workmen make in increasing production. The demand for bonus becomes an industrial claim when either or both these conditions are satisfied.
The formula for the grant of bonus is as follows: As both labour and capital contribute to the earnings of the industrial concern, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges. The first charges on gross profits are (1) provision for depreciation (2) reserves for rehabilitation, (3) a return at six per cent on the paid up capital and (4) a return on the working capital at a lesser rate than the return on paid up capital. The surplus that remained after meeting the aforesaid deductions would be available for distribution as bonus.
The claim for bonus can be made by the employees only if as a result of the joint contribution of capital and labour the industrial concern has earned profits. If in any particular year the working of the industrial concern has resulted in loss there is no basis nor justification for a demand for bonus. Bonus is not a deferred wage, if it were so, it would necessarily rank for precedence before dividends. The dividends can only be paid out of the profits and unless and until profits are made no occasion or question can arise for distribution of any sum as bonus amongst the employees.'
11. The sum and substance of the entire discussion is that bonus is not a regular part of the wages, deferred or otherwise and in essence is an ex-gratia payment But by statute or by agreement it can assume permanency and become part of the wages. Section 60 C. P. Code covers only a limited class of wage-earners, viz, labourers who earn their daily bread by personal manual labour or in occupations which require little or no art, skill or previous education. If these conditions are fulfilled, bonus will stand protected under Section 60 C. P. Code.
12. Bearing these facts in mind if we examine the facts of this case, we find that the learned District Munsif came to the correct conclusion that Section 60 C. P. Code is not applicable to arrears of bonus of Rs. 200 in deposit and attached it because bonus in this case was nothing more than an ex-gratia payment as neither by statute nor agreement had it assumed permanency and become part of the wages and the revision petition does not fall the definition of 'labourer' contemplated under Section 60 C, P. Code,
13. There are no grounds to grant the stay asked for. The interim stay already granted is dissolved and this application is dismissed with costs.