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State Bank of India Staff Union and ors. Vs. State Bank of India - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1984)ILLJ306Mad
AppellantState Bank of India Staff Union and ors.
RespondentState Bank of India
Cases ReferredBombay Company Ltd. v. Its
Excerpt:
- - the state bank employees union will add that the respondent has not given any notice under section 9-a of the industrial disputes act, 1947 to withdraw the right of the workmen to receive customary bonus and hence their action is illegal, or all or any of these reasons therefore it is prayed that the respondent should be directed to pay all award staff, two months' basic pay as drawn on 30th june and 31st december respectively each year commencing from 2nd hall of the year 1975 irrespective of the salary drawn by them and without any ceiling together with interest at 12% per annum from the due date of payment commencing from the half year from 1975, besides costs of these proceedings, 3. the respondent bank in its counter statement contends in the year 1942, during the war years,.....t. arulraj, presiding officer1. this dispute arising out of a reference under section 10(1)(d) of the industrial disputes act, 1947 by the government of india in order no. l-12012/14/81-d.ii(a), dated 15th june, 1982 of the ministry of labour is in respect of nonpayment of bonus as usual from 31st december, 1975.2. according to the allegations in the separate claim statements of state bank of india staff union, madras, state bank employees' union, madras and state bank workmen staff union, madras, the imperial bank of india which was the predecessor-in-interest of the respondent-bank used to close their books and accounts and declare dividends at the close of the each half year ending on 30th june and 31st december each year. after the close of the first half in 1943, and long ix-fore the.....
Judgment:

T. Arulraj, Presiding Officer

1. This dispute arising out of a reference under Section 10(1)(d) of the Industrial Disputes Act, 1947 by the Government of India in Order No. L-12012/14/81-D.II(A), dated 15th June, 1982 of the Ministry of Labour is in respect of nonpayment of bonus as usual from 31st December, 1975.

2. According to the allegations in the separate claim statements of State Bank of India Staff Union, Madras, State Bank Employees' Union, Madras and State Bank Workmen Staff Union, Madras, the Imperial Bank of India which was the predecessor-in-interest of the Respondent-Bank used to close their books and accounts and declare dividends at the close of the each half year ending on 30th June and 31st December each year. After the close of the first half in 1943, and long Ix-fore the advent of concept of honus in industrial law, the Imperial Bank paid bonus equivalent to one month's basic pay drawn by them on 30th June, 1943 and also 31st December, 1943 to its employees and the Respondent-Bank continued to pay the same when it succeeded Imperial Hank in 1955 without break in an unbroken change and irrespective of an profit; or the salaries of the employees, in spite of prohibition under Section 10 of the Banking Companies Act, 1949 before the amendment in 1956, In 19/17, the calculated amount of bonus payable to each calculate was merged with the respective basic pay with consequential increase in Dearness Allowance and superannuation benefits, Even after the passing of the Payment of Bonus Act, 1965, this mode of payment of bonus every half year was not toothed. In had, Section 17 of the Payment of Bonus Vth ideas that in case where the employer had paid any or customary bonus to an employee the same shall be adjusted against the bonus payable under the Act. This section has thus recognised the right of the employees to receive customary bonus debtors the profit sharing bonus. It has thus become an implied condition of service and it is more or less in the nature of deferied part of wages paid in lump sum on two occasions in a year irrespective of profits or dividends. It is not ex gratia payment and it is not titled in the pattern of profit sharing bonus envisaged by the Payment of Bonus Act, 1965. In other words, not less than two months basic pay was paid to employees in all the years right from 1943 upto the year 1975 and or the first time departure was made in 1975. Under the Payment of Bonus Act, profit sharing bonus is paid after the close of the accounting year, based on the allocable surplus, It is never paid in terns of basic wages. It cannot be therefore fitted in under the provisions of the said Payment of Bonus Act. For the first hall year, ending 30th June, 1975, the first Respondent-Bank paid the usual one month basic pay as drawn by the employees on 30th June, 1975 as bonus to all the employees. On 25th August, 1975 the Central Government issued ordinance of 1975 called 'The Payment of Bonus Amendment Ordinance' inter alia removing the Bunks from the purview of the Bonus Act. Hence, the first Respondent has not paid bonus for the half year ending with 31st December, 1975, but only ex gratia payment at V or the year ending 31st December 1975 alter adjusting the one month's basic pay already paid and the payment is made only to the employees who are eligible under the Payment o( Bonus Act and the employees, who are drawing salary, not exceeding Rs. 1600/- per mensem. under these circumstances, the action of the Management in stopping such payment with (.fleet from second half of the year 1975 is not based on any valid grounds or reason. The State Bank Employees Union will add that the Respondent has not given any notice under Section 9-A of the Industrial Disputes Act, 1947 to withdraw the right of the workmen to receive customary bonus and hence their action is illegal, or all or any of these reasons therefore it is prayed that the Respondent should be directed to pay all Award Staff, two months' basic pay as drawn on 30th June and 31st December respectively each year commencing from 2nd hall of the year 1975 irrespective of the salary drawn by them and without any ceiling together with interest at 12% per annum from the due date of payment commencing from the half year from 1975, besides costs of these proceedings,

3. The Respondent Bank in its counter statement contends in the year 1942, during the war years, just like other employees in Bombay, the employees in the Bank were paid bonus. The first bonus equivalent to one month's substantive pay was declared for the period from 1st July, 1941 to 30th June, 1942, after ascertaining profits for the half year ended 30th June, 1942. From July, 1942 to June, 1944, bonus was paid to the members of the Staff at the rate of one-month's substantive pay for one year. From 1945, two months' substantive pay came to be paid, one month's pay being paid at the end of each hall year ended 30th June and 31st December. A special independence bonus equivalent to one hall of one month's substantive pay was also declared and paid by the said Imperial Bank in August, 1947. The said Imperial Bank of India had always made profits in its operation and there was no question of the said Bank, ever sustaining any loss. Alter the transfer of the Imperial Bank to the State Bank of India in 1955. the practice of closing the accounts as on 31st December was adopted. Nevertheless the bank also ascertained its profits for every half year at the end of 30th June and declared interim dividends. The Bank also paid to its employees interim bonus at the rate of one month's substantive pay on 30th June, All these payments were is a mark of making profits for the concerned half years. There was never any year in which the Imperial Bank or the State Bank of India failed to make profits, so that there can be no question of any such payments being irrespective of profits. When the Payment of Bonus Act, 1965 came into force, the manner of calculation of bonus was laid down under the said Act. As far as the Bank is concerned, the payments were used to be made every half year with reference to the profits for the said half year. Nevertheless the payment of such bonus from and after 1964, when the Act came into force was under the Act and the Bank followed the pattern and formula set out thereunder. After the coming into force of the Payment of Bonus Act, the payments were linked up with or related to, the liability for profit sharing bonus under the Act. In fact, the Union itself has accepted this by entering into various agreements from time to time on the question of bonus. The very fact that additional ad hoc payment besides two months' pay will show that it is profit sharing bonus. The Claimant Union is not correct in stating that the payment made every year is not the profit sharing bonus. The contention that it is only a part of deferred wages is absolutely wrong. It is well known that the bonus payable under the Act is not deferred wages as has been held by the National Commission dealing with the matter. There is no question of the Respondent withdrawing the so-called deferred wages. The very concept of deferred wages is inconsistent with the said payment being made without being assimilated to wages for over a period of two decades and more. It is inconceivable that Union would have allowed the so called deferred wages without being assimilated into wages in computing fringe benefits like bonus, leave wages, terminal benefits etc. It is absolutely misleading and incorrect on the part of the claimants to say that the payment of bonus has been unbroken and irrespective of any profits. It is not without significance that the claimants admit that the Desai Tribunal gave an Award in respect of the dispute for bonus, more or less accepting the Full Bench Formula. It is well known that the Full Bench Formula is the precursor to the Act in respect of payment of profit bonus. Section 17 of the Act referred to therein is without any relevance. It is not correct to say that Section 17 of the Act recognises the right of the employees to receive customary bonus. The employees of the Bank were not at any time paid customary bonus, but they were being paid only profit sharing bonus. On the facts of the case, there can be no question of payment made to the employees being termed as customary bonus. For one thing admittedly the payments were not related to any festival. Secondly the payments were directly linked up with profits, and not to any other circumstances. In fact the very attempt of the claimant wzho call these payments as customary bonus in one place and deferred wages in another place disclose the total confusion in their thinking. It is not explained as to what contractual bonus is and how it can arise in the present case. It is also incorrect to say that the payment of bonus to the employees has become an implied condition of service. The Act was amended in the year 1975 and by the said amendment, Banks are excluded from the operation of the Act. Thus no amounts, by way of bonus have become payable to the employees. In order to relieve that hardship, the Government and the Reserve Bank of India had directed the Bank to make ex-gratia payments in lieu of bonus, which the employees might have got under the Act. The employees under these circumstances will not be entitled to make any demand on the basis alleged by them. The claim for interest is not only frivolous but also vexatious. In the above circumstances, it is prayed that the claims may be rejected.

4. The points for determination in this case will be:

1. Whether the Award Staff are entitled to payment of one month's wages biannually as drawn on 30th June and 31st December respectively each year, by way of bonus, irrespective of the quantum of salary, as customary bonus, or contractual bonus or deferred wages; and

2. to what relief are the parties entitled.

5. Point No. 1: Sri M.R. Narayanaswami, learned Counsel for the Management of course contends at the outset that the Staff Union, whose line other Unions toe, stand or fall on proof or otherwise of the nature of bonus paid earlier as customary bonus as has been mentioned in Clause (2)of the reference and it is not open to the Management to have inconsistent stand as referred in the pleadings either, as contractual bonus or deferred wages. It is true, the Petitioner-Union claims relief for perpetuation of the payment of bonus started right from 1941, even after the amendment under the Payment of Bonus Amendment Ordinance, 1975 as contractual bonus or bonus being implied condition of service, deferred wages or customary bonus, while in the reference it is restricted to customary bonus only. All that the Unions claim is bonus debtors of Payment of Bonus Act and according to them, it may arise out of a contract or by custom or as part of wages. In fact, that was the case of the union not only in the affidavit Ex.W-4 filed in W.P. No. 2491/1976 on the file of High Court of Madras, but also in Ex.W-2, dated 26th December, 1979 addressed by the 1st Petitioner-Union to the Regional Labour Commissioner (Central), Madras. In fact, under Ex. W-2, copies of which have been sent to Chief Commissioner of Labour, New Delhi, Secretary, Ministry of Labour and Employment, Government of India, Shram Bhavan, New Delhi and the Management of State Bank of India, Madras, Unions have requested that the dispute may be formulated as follows, viz., (1) whether the action of the Management of State Bank of India in stopping the payment of one month's wages as drawn on 30th June and 31st December respectively by way of bonus annually with effect from the second half of 1975 is justified, legal and valid, if not to what relief the workman (i.e.) award staff are entitled and (2) are the members of the award staff of State Bank of India entitled to receive annual bonus of two months basic wages (as drawn on 30th June and 31st December respectively) irrespective of the salary as a customary bonus or as an implied condition of service or as deferred wage, if so what relief the workmen are entitled to. However, when the reference was made by the Government of India, the other two basis of claim, namely, as an implied condition of service or as a deferred wage has been omitted. It follows therefore that the Unions claim this bonus on the basis of custom, contract or deferred wage and not custom alone, as contended by Sri M.R. Narayanaswami. In such circumstances, as was held in Minimax v. its workmen reported in 1968 1 L.L.J. 373, a judgment delivered by our Honourable Chief Justice of Madras High Court, then Puisne Judge of the Patna High Court, it is to be adjudicated in this dispute, whether this claim could be sustained on all or any one of the grounds, vi:., custom, contract or deferred wages and sustainability of this claim cannot be restricted on the basis of customary bonus alone as contended by Sri M.R. Narayanaswami.

6. It is true, by amendment of Clause (vii) of Section 32 under the Payment of Bonus Amendment Ordinance, 1975 which has become Act 23 of 1976, payment of profit sharing bonus to the employees of the banking industry was prohibited. Of course, it is lost sight of the latest amendment to this Section, by Payment of Bonus Amendment Ordinance, 1977 by which, Clause (a) Sub-clause (vii) of Section 32 prohibiting payment of profit sharing bonus to the employees of Banking Industry is altogether omitted. It appears, therefore, from the date of this Ordinance, which comes into force on 3rd September, 1977, the employees of banking industry also will be entitled to profit sharing bonus. Whatever it may be, the point that has to be decided is, whether what is claimed by the Petitioner-Unions by way of bonus, is profit sharing bonus or rather what was paid to them all these years is profit sharing bonus or it has become an implied term or condition of service or contractual bonus or part of deferred wages or customary bonus, not hit by any prohibition, under the Payment of Bonus Amendment Ordinance of 1975. As has been held by the Supreme Court in Hukumchand Jute Mills Limited v. Second Industrial Tribunal, West Bengal : (1979)ILLJ461SC , under Section 17 of the Payment of Bonus Act, which keeps pooja and customary bonus in tact, the customary or contractual bonus goes beyond the pale of Amending Act, which-modifies the previous one by bringing within its range bonus on the basis of production or productivity also. It has to be decided therefore in this case, whether the payment admittedly made periodically right from 1941 till June, 1975 is profit sharing bonus as claimed by the Management, so as to be stopped as and when prohibited by the Act or it is customary or contractual bonus or deferred wages as contended by Sri Doha, leaned Counsel for the 1st Petitioner-Union to withstand all the storms of prohibition under various legislations right from the Banking Amendment Act of 1949, Payment of Bonus Amendment Act, etc.

7. Though no document is produced on either side, for payment of bonus till the accounting year, ended 31st December, 1962, it is not disputed, under whatever conditions and circumstances, bonus might have been made, it was paid at the rate of one month's salary every year from 1st July, 1941 and one month salary half yearly (i.e.) biannually ending with 30th June and 31st December every year from 1945 onwards till 30th June, 1975, in spite of Section 10 of die Banking Regulation Act, 1949 prohibiting payment of bonus to the employees of Banking Industry. For the accounting year 1963, under Ex.M-1, it was resolved to pay interim bonus which should have been paid also perhaps at the same rate as before, out of contingency account to be reimbursed by transfer from profits at the end. Under Exs.M-2, M-3, payment under which was post sanctioned under Ex.M-19 dated 28th January, 1966, M-4, M-9, M-10 and M-5 which is based on Ex.M-11 for the accounting years 1964 to 1970 respectively, bonus was declared to be payable to the employees at 10%. 8%, 8%, 7%, 7/2%, 8% and 6% respectively of the salary or wage as defined under the Payment of Bonus Act, 1965. However, the members of the Award Staff were allowed as in the past to draw bonus for the years 1964, 1965, 1908, 1969 and 1970 at the rate of one month substantive pay fur each of the half years ended 30th [line, and 31st December and in respect of accounting years 1966 and 1967, bonus were paid in terms of an agreement under Ex.M-8, an ad hoc amount equivalent to 1% of salary or wage as defined in the Payment of Bonus Act, 1965 or ii the bonus declared at the above rates 8% and 72% for 1966 and 1967 respectively was lower than the aggregate of one month's substantive pay drawn by them as at the end of the hall years ended 30th June and 31st December, time difference between the two amounts whichever was higher. No document is produced to show what was paid for the accounting year 1971. Perhaps the same arrangement as for the accounting year 1970 should have been also continued to be paid for this accounting year, in spite of alleged settlement, enclosed in Ex.M-17 at 52 days bonus or Rs. 1450/- for the year 1970 and 80 days bonus or Rs. 1500/- for the year 1971. However, for the accounting years 1972 and 1973 under Exs.M-12 and M-13, amounts representing 84 and 92 days average basic pay of the respective accounting years respectively were paid in the latter case, subject to the maximum of Rs. l700/-to all the members of the staff. No document is produced to show what was paid towards bonus to the award staff in the year 1974 but it cannot be less than two months' substantive pay, as otherwise, available document to the contrary would have been produced by the management to rebut the claim of Union, that it has paid so. Under Ex.M-7 only ex gratia payment for the accounting year 1974 is contemplated and what is that amount and what it is in addition to what was already paid cannot be known, unless the memorandum as referred therein is produced. It is admitted that one month's substantive pay was paid as due on 30th June, 1975 and thereafter only payment was stopped. Two things are clear from these documents that even after the introduction of the Payment of Bonus Act, 1965, from the accounting year 1964, invariably, whatever may be profit as ascertained under Exs.M-10 and M-11 for the accounting years 1969 and 1970 or unascertained as in the past, one month's substantive pay for every half year ended 30th 1 June and 31st December was always paid to the Award Staff and it was always insisted upon by the Federation that they should be paid bonus according to the provisions originally of Sen Award and subsequently under the Payment of; Bonus Act, even though, every now and then, not according to the demand of the staff but with the discretion of the Management, a little more than this amount was paid in the years 1966 and 1967 and also in the years 1972 and 1973. Sri M.R. Narayanaswami, learned Counsel for the Management on the strength of the various recitals contained in the documents referred above that the amount which was originally debited to the contingency account was later on reimbursed from a transfer of profit at the end of the year, that the payment is available only to those who are not disqualified as per the said Payment of Bonus Act, that the payment at the rate of one month's substantive pay each half year is of a tentative nature, subject to recovery later on, that the quantum of bonus is at 8% of the salary or wage as defined under the said Act and also the claim of the Union under Hx.M-14 under a bonus formula prescribed by the Desai: Tribunal for the accounting years 1956 to 1963 that the ad hoc settlement shall not be treated as a precedent or taken as a basis or govern [he principle for the determination of bonus for any of the accounting years 1965 onwards contends that they reflect only payment of bonus under the provisions of the Payment of Bonus Act which is profit sharing bonus at least from the accounting year 1964 if not earlier and that therefore the staff will not be entitled to any profit sharing. bonus after the Amendment of the Payment of Bonus Act, 1975 prohibiting such profit sharing bonus to employee's' of Banking Industry.

8. It is true, invariably it is declared under Exs.M-2 to M-5, M-10, M-11 and M-14, that all the employees, Award and Non Award Staff, who are not disqualified, be granted bonus at various percentages of the salary or wage as defined thereunder. Under Section 2(13) of the Payment of Bonus Act, employee means any person employed on a salary or wage not exceeding Rs. 1600/- per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward whether the terms of employment be express or implied. Therefore under the Act, persons drawing more than Rs. 1600/-per mensem were excluded from sharing the profits by way of bonus. But in the case of Award Staff for whom this dispute is raised, they were receiving bonus, as a matter of right, irrespective of salary that they were drawing. In fact, it is alleged in the claim statement that some of the members of the Award Staff were getting more than the sum fixed under the Act, and yet they were getting bonus irrespective of the celing on the salary. In fact, in Ex.M-10, the memorandum for the Central Board, it is stated that under the Payment of Bonus Act, while officers drawing salary or wage (i.e.) salary and Dearness Allowance and City Compensatory Allowance, if any, above Rs. 1600/- per mensem are not eligible for any bonus and maximum bonus at Rs. 750/- per mensem is fixed, the ceiling does not effectively operate in the case of the Award Staff, as they were paid a higher bonus, etc. In paragraph (1) of Ex.M-11, it is stated that members of the Award Staff were allowed, as in the past, to draw bonus at the rate of one month's substantive pay for each of the half years ended the 30th June and the 31st December and the members of the rest of the staff who were eligible for bonus under the Act were paid bonus, etc. So, the eligibility for bonus under the Act was not applied to the Award Staff, so as to be contended that since they are governed by the Payment of Bonus Act, they have been getting only share in the profit by way of bonus. Under Ex.M-2, for the accounting year 1964, bonus was awarded at 10% of the salary or wage and recovery of excess, if any, by payment made already at one month's substantive pay half yearly ended 30th June and 31st December, 1964, was then left open. There is no evidence that anything was recovered or that it is less than two months' substantive pay, as regularly paid all these years. If 10% represents only the amount of aggregate of two months' pay, then it cannot be said that it is paid out of profits, particularly when profit and loss account in the possession of the Management is not produced. On the other hand, it shows that the Award Staff is not entitled to anything more than two months' substantive pay by way of custom, contract, express or implied or deferred wages and not a share in the profits, worked out at 10% of the wages. Further, it is admitted by the Management itself at para (3) of Ex.M-10 and para (4) of Ex.M-11, the Bank was paying to the Award Staff at the rate of two months' basic pay or at the rate declared by the Bank under the Payment of Bonus Act, whichever is higher, with a view not to reduce the rate of bonus, the Bank was paying before the application of the Act. The quantum of bonus payable under the Payment of Bonus Act will be certain percentage on the salary or wages which is defined under Section 2(21) of the Payment of Bonus Act, as all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money and also 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). But in the case of Award Staff, only the quantum representing two months' substantive pay was paid as bonus, a pattern different from that, contemplated under the Payment of Bonus Act. Another important feature in the payment of bonus to the Award Staff is biannual that is payable on 30th June and 31st December, whereas the payment of bonus under the Payment of Bonus Act is annual. These distinct features will run counter to the nature of profit sharing bonus, contemplated under the Payment of Bonus Act and therefore die bonus in question must be either customary or contractual or form part of deferred wages as contended by Sri Doha, learned Counsel for the 1st Union, so as to be not hit by the prohibition introduced by the amendment of Payment of Bonus amendment Act, 1975.

9. It is contended by Sri M.R. Narayanaswami, learned Counsel for the Management, it cannot be customary bonus as it is not in any way connected with festival. In support of his contention he relies upon Employee's Union v. B.N. Elias & Co., and Ors. : (1960)IILLJ219SC and Cherakulan Tea Estate Private Ltd. v. Its Workmen and Anr. : (1969)IILLJ407SC . In the former case, the Supreme Court held that payment of bonus un-interruptedly, no doubt from 1942 to 1952, three times a year to the clerical staff and four times a year to subordinate staff, admittedly as ex gratia payment and accepted as such will not imply a term of service on the basis of implied agreement or customary bonus if such payment is unconnected with any festival as Pooja in Bengal or some other equally important festival in any other part of the country, his view has been confirmed in the latter case by the same Court that payment of bonus however continuously and un-interruptedly made, if it is not uniform or connected with any festival or both, neither implied condition of service nor customary bonus be inferred. In the latter case, relied on by Sri Narayanaswami, it is not ruled out that customary bonus should be always connected with festival. On the other hand, it was held in Grahams Trading Co. (India) Ltd v. Their workmen : (1959)IILLJ393SC , that if the bonus has been paid un-interruptedly for long time and at a uniform rate as in this case, as far as two months substantive pay is concerned throughout, even at a time when there was loss, which is found to be not necessary in the later case Tulsidas Khimii v. Their workmen : (1962)ILLJ435SC , it is customary bonus as contended by Sri Dolia, learned Counsel for the 1st Union. Even in Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai and Ors. : (1976)IILLJ186SC , relied on by Sri Dolia, the Supreme Court has observed in paragraph (17), 'The crucial question is not whether there is a festival whicn buckles the bonus and the custom. What is legally telling is whether by an unbroken flow of annual payments, a custom or usage has flowered, so that a right to bonus based thereon can be predicated. The custom itself precipitates from and is proved by the periodic. payments induced by the sentiment of the pleasing occasion, creating a mutual consciousness, after a ripening passage of time, of an obligation to pay and a legitimate expectation to receive.' It is true as contended by Sri M.R. Narayanaswami that this has been remanded for purpose of finding out whether in any event the long payment amounts to customary bonus, but nevertheless it does not attach any importance to festival being connected with such bonus to conclude it as customary bonus. Under these circumstances, I have no hesitation to hold that the payment of bonus at two month's substantive pay each year is customary bonus outside the pale of the amendment of Payment of Bonus Act, 1975.

10. At any rate, as far as the payment of one month's substantive pay or salary biannually in a year being uniform and for a long time it will be certainly an implied condition of service or contractual bonus if not customary bonus: Though in Grahams Trading Co. (India) Ltd. v. Their workmen and also in Employee's Union v. B.N. Elias & Co., and Ors., it was held where certain amounts are paid as ex-gratia payment, and on condition, it should not be taken as precedent and in the latter case, it is accepted as ex-gratia amount, no inference could be drawn, as implied condition of service as there is no meeting of minds regarding the subject matter of the agreement. It is true in certain years under Exs. M-3 and M-4, it is stated that ex-gratia payment should not be taken as precedent in future, but not two month's substantive pay. Therefore this payment could be taken as implied condition of service also. In fact, it was held in Bombay Company Ltd. v. Its workmen 1964 II L.L. J. 109, where the payment of bonus is uniform or connected with festival, it could be inferred as implied condition of service. In this case, as the quantum of bonus at two month's substantive pay is uniform it will be construed as condition of service.

11. Even granting that it is neither customary J bonus nor contractual bonus, I have no hesitation to hold that it is part of deferred wages and therefore this bonus, irrespective of any prohibition under any Act, is liable to be paid to the Award Staff. It has been contended in the J claim statement of the Petitioner-Union that for a long time, annually in the first instance and biannually subsequently, a month's salary has been paid not only to the Award Staff, but also Junior Officers and in 1957, this annual payment paid to the Junior Officers was merged with their wages, while the biannual payment to the Award Staff continued to be paid by the Management. The Management in its counter statement, while referring to this averment, has not denied this merger. On the other hand, it alleged at paragraph (15) of the counter statement, the Bank decided to stop the payment of bonus to Officers, but nevertheless to avoid hardship to them, the bonus component was duly taken into account in the revised scales of pay and while for the Junior Officers, an amount equivalent to two month's basic pay was taken into account, for Senior Officers only the month's basic pay was taken into account. It is therefore indirectly conceded by the Management itself that in lieu of bonus, equally paid to the Officers, their scale of pay was improved. It implies therefore what has been paid by way of bonus right from 1941 to the Officers, and the Award Staff is only art of wages or wages deferred annually or I annually and not ex-gratia payment, as contended by Sri Narayanaswami, In any event, two months' substantive pay as originally paid from 1945, though with some addition subsequently, after the amendment of Payment of Bonus Act, 1965 is not related to profit sharing bonus under the Payment of Bonus Act but either as customary bonus or implied condition of service or deferred wages, the Management is bound to pay the same, in spite of prohibition of profit sharing bonus under the provisions of the Payment of Bonus Amendment Act, 1976.

12. Sri Dolia, learned Counsel for the 1st Petitioner-Union contends that in addition to the bonus, the Management is bound to pay also interest at the rate of 12% per annum from the date, these amounts are due to be paid, though in the claim statement, interest is claimed at 13% per annum. Of course, the Management will refute not only its liability to pay any bonus, but also any interest. The reference to this Court is only to ascertain whether any bonus at all is payable for the period in dispute, (i.e.) 2nd half of 1975 to 1st half of 1977, when the Amendment Act of 1976 was alleged to have prohibited profit sharing bonus. Thereafter, the prohibition being lifted, bonus has become payable as usual as I have held earlier. In the absence of any reference for adjudication as to the liability to pay interest for this amount, I doubt whether this Court can also, in addition to directing payment of bonus for the period stopped, order payment of interest thereon. No authority is cited to support this claim. On the other hand, when reinstatement is ordered with back wages by this Court in various other cases, no interest for the back wages is paid or ordered to be paid. Further, it is not as if the Management stopped payment of bonus without any justifiable ground. The Management has been paying bonus even at the time when under Section 10 of the Banking Regulations Act bonus was prohibited. It is only on account of the advent of the Amendment of the Bonus Act prohibiting profit sharing bonus as I held earlier to the bank employees that this situation has arisen. Even after this alleged prohibition, it is alleged that some ex-gratia amounts are being paid to bank staff, to avert hardship caused by this prohibition. It is a different matter whether in fact there is any such prohibition for payment of bonus to the Award Staff and in fact it is not so. But there cannot be any bad intention on the part of the Management to stop this payment under these circumstances. Therefore, I do not think that payment of interest is also warranted in these circumstances. This point I find accordingly in favour of the Union.

13. Point No. 2. In the result, an award is passed directing the Management to continue to pay at least two month's substantive pay as customary bonus or any of its kind biannually at every half year ended 30th June and 31st December from 2nd half of 1975 onwards to Award Staff less what is alleged to be paid as ex-gratia payment, if true, with costs of Rs. 500/- to the 1st Petition-Union. The other two Unions will bear their own costs.


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