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Secretary, Bank of Madurai Limited Represented by His Power of Attorney Agent P. Nambirajan Vs. the General Secretary, Bank of Madurai Employees Union and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Reported in(1970)2MLJ239
AppellantSecretary, Bank of Madurai Limited Represented by His Power of Attorney Agent P. Nambirajan
RespondentThe General Secretary, Bank of Madurai Employees Union and anr.
Excerpt:
- .....employee.explanation.--where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause be deemed to form part of the salary or wage of such employee ;the argument on behalf of the learned counsel for the petitioner is that the special allowance contemplated by question no. 1 falls within the scope of the 1st exception, namely, ' any other allowance which the employee is for the time being entitled to. i am of opinion that this argument is unsound. conditions of service, salary and allowances of bank employees have been determined by the sastri's award as modified by desai's award. special allowances have ken fixed by those.....
Judgment:
ORDER

M.M. Ismail, J.

1. The following two questions were referred for adjudication to the Industrial Tribunal, Madras by the Central Government:

1. Whether the management of the Bank of Madura Limited, Madurai, is justified in not treating the special allowance as part of the salary or wage, for the purpose of calculation of bonus payable to its employees for the years 1964 and 1965? If not, to what relief are the concerned workmen entitled?

2. Whether the management of the Bank of Madura Limited, Madurai, is justified in not paying bonus for the years 1964 and 1965 to the 'Probationers' employed by them If not, to what relief are the said probationers entitled?

By an award dated 30th December, 1967 in I.D. No. 20 of 1967 the Industrial Tribunal answered both these questions in favour of the employees. It is to quash this award that the present writ petition has been filed under Article 226 of the Constitution of India.

2. As far as the first question is concerned, it turns upon the definition of the expression 'salary' or 'wage' occurring in Section 2 (21) of the Payment of Bonus Act (XXI of 1965), hereinafter called the Act. Section 10 of the Act states that every employer shall be bound to pay to every employee in an accounting year a minimum bonus which shall be four per cent. of the salary or wage earned by the employee during the accounting year. Consequently the quantum. of bonus has to be calculated with reference to the salary or wage earned by the employee. The expression 'salary' or 'wage', as pointed put already, is defined in Section 2 (21) of the Act. That Section 2 (21) states:

'Salary or wage' means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whetever name called, paid to an. employee on account of a rise in the cost of living), but does not include:

(i) any other allowance which the employee is for the time being entitled to;

(ii) the Value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service of or any concessional supply of foodgrains or other articles;

(iii) any travelling concession ;

(iv) any bonus (including incentive, production and attendance bonus);

(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;

(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him ;

(vii) any commission payable to the employee.

Explanation.--Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause be deemed to form part of the salary or wage of such employee ;

The argument on behalf of the learned Counsel for the petitioner is that the special allowance contemplated by question No. 1 falls within the scope of the 1st exception, namely, ' any other allowance which the employee is for the time being entitled to. I am of opinion that this argument is unsound. Conditions of service, salary and allowances of Bank employees have been determined by the Sastri's Award as modified by Desai's Award. Special allowances have Ken fixed by those Awards for persons possessing academic qualifications and those who are called upon to shoulder higher responsibilities. As a matter of fact the awards fixed special allowances only in lieu of fixing distinct separate and higher sales of basic pay. On the other hand, the first exception contemplated in Section 2 (21) of the Act is admittedly an allowance payable, for the time being to a particular employee and not an allowance going along with the post, whoever happens to be the occupant of the post. As far as the present dispute is concerned, it is admitted before me that the special allowance are in terms of Sastri's Award and Desai's Award which go along with the posts and not temporary allowances payable to particular employees for a particular period. Consequently, the special allowances payable to Bank employees do not come within the scope of the first exception to 'salary or wage' in Section 2 (21). Therefore, the conclusion of the Tribunal that the special allowances being part of the remuneration should be taken into account for the purpose of calculating bonus is correct and does not call for any interference.

3. As far as the second question is concerned, that also depends upon the definition of the term 'employee' occurring in the Act. Section 2 (3) of the Act defines the term 'employee' thus:

'Employee' means any person (other than an apprentice) employed on a salary or wage not exceeding one thousand and six-hundred rupees 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, the only person who is excluded from the scope of the term ' employee' is an apprentice. The controversy before the Tribunal was whether the probationers employed by the Bank are apprentices. According to the petitioner they are apprentices, but according to the 1st respondent they are not apperntices but employees on probation. For this purpose, reliance appears to have been placed, before the Tribunal, on Clause 9 of the Staff Regulation and Rules of Service. Clause 9 states:

An employee shall ordinarily be on probation, if appointed so, for a period which shall be fixed by the appointing authority and which may extend to one year after the commencement of active service. During the first month of such period, he shall be liable to be discharged at one day's notice and thereafter at one month's notice, or pay in lieu thereof, if he has paid apprenticeship premium.

The learned Counsel for the petitioner himself concedes that this regulation has not been happily worded and it confuses between probation and apprenticeship. The very opening sentence of this regulation proceeds on the basis that a probationer is an employee and ordinarily every employee is started on probation. It is not the case of the petitioner that every employee is started on apprenticeship and thereafter only he becomes a regular employee. The learned Counsel for the petitioner contended that, in view of the vagueness of the words 'probationer' and ' apprenticeship* used in this regulation, no reliance could be placed upon it for determining whether the probationers are really employees or only apprentices and the Tribunal should have decided this question on materials other than Clause 9 of the Staff Regulation and Rules of Service. The only other material which the 1st respondent had produced before the Tribunal is an order appointing an employee on probation. That order of appointment which has been marked as Exhibit W-1 before the Tribunal, does not use the word ' apprentice' anywhere and the tenor of the order itself does not indicate that, when a person is appointed on probation, he is appointed only as apprentice. Consequently, on this question also the conclusion of the Tribunal that probationers are really employees and not apprentices, cannot be said to be erroneous in law so as to warrant any interference by this Court under Article 226 of the Constitution of India. Hence no case has been made out for interference with the award of the Tribunal.

4. The writ petition, therefore, fails and the same is dismissed. There will be no order as to costs.


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