SANGAMNER BHAG SAHAKARI SAKHAR KARKHANA LTD. v. RASHTRIYA SAKHAR KAMGAR UNION
2000-06-09
R.J.KOCHAR
body2000
DigiLaw.ai
JUDGMENT : R.J. Kochar, J.—The petitioner sugar Karkhana is aggrieved by the impugned award of the Industrial Court dated September 16, 1986 declaring that the retention allowance is a substantive part of the salary or wages for the purpose of calculating bonus payable to seasonal employee by the sugar industry and directing the petitioner to take into account the retention allowance as wages in respect of the seasonal employees for the years 1979-80 and 1980-81 for payment of bonus for those years. Admittedly the petitioner Karkhana had declared and paid bonus under the Payment of Bonus Act, 1965 @ 8.33%, the statutory minimum and ex-gratia amount @ 11.67% for the aforesaid years to all the employees including the "seasonal workers". It further appears that while computing the aforesaid amounts of bonus and ex- gratia, the "retention allowance" paid to the seasonal workers was not included in the sum of total annual wages received by them. The respondent Union was aggrieved by the said omission by the Karkhana and therefore, it desired a change in the calculation of "wages" and consequently in the payment of bonus and ex-gratia amounts paid to the seasonal workers. 2. By a notice of change dated December 18, 1981 u/s 42(2) of the Act, the respondent union being a representative and approved union for the sugar industry for the local area of Ahmednagar desired a change in respect of the bonus and ex-gratia payment for the years 1979-80, 1980-81 distributed to the employees for those respective years by including the amount of retention allowance earned by seasonal workers for those respective years and include such retention allowance to compute the total wages for the said purposes. It appears that after receipt of the said notice of change there was no agreement in the conciliation proceedings between the parties and therefore the representative union had referred the dispute for adjudication to the Industrial Court u/s 73-A of the Act after getting failure certificate from the conciliation officer as required under the law. The Union justified its claim by filing a statement of claim while the petitioner Karkhana contested the case of the union by filing its written statement. The learned Member of the Industrial Court has answered the reference in favour of the Union as above.
The Union justified its claim by filing a statement of claim while the petitioner Karkhana contested the case of the union by filing its written statement. The learned Member of the Industrial Court has answered the reference in favour of the Union as above. The facts are not disputed at all and the point of contest between the two parties is within a very narrow compass. The union has given a notice of change u/s 42(2) read with item 9 of Schedule II and Section 3(39) of the Act. The Union has demanded that the bonus should be paid to the seasonal employees who were employed during the seasons of 1979-80 and 1980-81 on the amounts of retention allowance received by them during the period of "off season" i.e. an interval between the two seasons. The petitioner Karkhana had paid to the seasonal workers bonus and ex gratia by calculating the total annual wages excluding the amounts of retention allowance. According to the Union it was a mistake on the part of the Karkhana to have excluded the amount of retention allowance from the total annual wages earned by the seasonal employees during the respective years. According to the Karkhana the retention allowance did not form part of the wages and therefore, that allowance was not included to compute the annual wages for the purposes of bonus. Shri Dhorde, has submitted that the award of the Industrial Court suffered from an illegality as the effect of the notice of change was made retrospective i. e., prior to the date of the notice of change. According to him the award should have been effective for the prospective period and not retrospective period. To be precise the learned advocate has submitted that the notice of change could be made effective after December 18, 1981 and not for the earlier periods i.e. for 1979-80 and 1980-81. As far as the point of retention allowance to be included in the total annual wage packet is concerned, the learned advocate has fairly submitted that the said point has been finally concluded by the Supreme Court in the case of Managing Director, Chalthan Vibhag Sahakari Khand Udyog, Chalthan, District Surat Vs. Government Labour Officer and Others,. He has however, vehemently argued that the Industrial Court could not grant the demand in the notice of change for the retrospective years i.e. 1979-80 and 1980-81.
Government Labour Officer and Others,. He has however, vehemently argued that the Industrial Court could not grant the demand in the notice of change for the retrospective years i.e. 1979-80 and 1980-81. The learned advocate has relied on a judgment of the Division Bench of this High Court in support of his said contention, in Bharat Kapus Utpadak Soot Girni Kamgar Sangh, Sangli, 1980 Maharashtra Law Journal 519. This was the only point urged by the learned advocate for the petitioner and no other points were pressed. 3. Shri Shelke, the learned counsel for the respondent union has submitted that there was no retrospective effect of the notice of change. According to him what the union had demanded was a change in the calculation of the amount of bonus and ex gratia paid to the seasonal employees. Shri Shelke, submitted that the petitioner Karkhana has already paid bonus and ex gratia for the aforesaid years but had made a mistake in calculating the annual wages of the seasonal employees by excluding the amount of retention allowance earned by them. By the Union's demand it was its attempt to correct the said mistake and therefore, a change was desired by the union in accordance with law. Under the B.I.R. Act by submitting a notice of change u/s 42(2) of the Act, Shri Shelke. has also submitted that the union is not making any fresh or new demand which would add to the financial burden of the Karkhana. Shri Shelke, has pointed out that the Karkhana has already paid bonus but by following an erroneous method of excluding the amount of retention allowance while calculating the amount of bonus under the Payment of Bonus Act, 1965. According to him therefore, the judgment of the Division Bench (supra) has no application. 4. I find much force in the submissions of Shri Shelke. The Union has merely demanded from the Karkhana that it should have calculated the annual wage of every seasonal employee by including the retention allowance and not by excluding the same. Their right to receive bonus is not questioned but they are paid the bonus by excluding the retention amount though it has been held to be a part of wages and therefore, the seasonal employees are entitled to get bonus on the said part of their wages i.e. the retention allowance.
Their right to receive bonus is not questioned but they are paid the bonus by excluding the retention amount though it has been held to be a part of wages and therefore, the seasonal employees are entitled to get bonus on the said part of their wages i.e. the retention allowance. The respondent being the representative Union has desired a change in item No. 9 of Schedule II of the Act read with Section 3(39) i.e. wages which includes bonus and all such allowances payable to the employees as part of the service contract. I agree with the submissions of Shri Shelke, that there are no separate or fresh demands which are to be retrospectively given. In the present case the union has demanded a kind of correction in the calculation of the annual wages of the seasonal employees. The Karkhana has already declared and paid bonus and ex gratia amounts to the seasonal employees but committed an error of not including the amount of retention allowance paid to them. This question of payment of bonus on the amount of retention allowance has been finally concluded by the Supreme Court in the above referred judgment. Even without the said judgment the definition of the wages even u/s 3(39) of the Act is clear to include the retention allowance. The definition is very wide to include any bonus, allowance, reward or additional remuneration. By no stretch of imagination the amount of retention allowance payable to the seasonal employees could be excluded from the said definition. Supreme Court has however finally made the position very clear. In the aforesaid circumstances I am not able to agree with the submissions of Shri Dhorde, for the petitioner that the notice of change demanding bonus for the previous years is bad in law being contrary to the judgment of the Bombay High Court having been given retrospective effect. The fact situation is totally different in our case. The respondent union is merely pointing out to the petitioner Karkhana to correct this mistake by including retention allowance while calculating annual bonus payable to the seasonal employees. There is no question of giving any retrospective effect to the notice of change as no fresh demands are being put forward by the union causing any additional financial burden.
The respondent union is merely pointing out to the petitioner Karkhana to correct this mistake by including retention allowance while calculating annual bonus payable to the seasonal employees. There is no question of giving any retrospective effect to the notice of change as no fresh demands are being put forward by the union causing any additional financial burden. According to me therefore, the award of the Industrial Court cannot be faulted with and I find no illegality or infirmity in the said award giving direction to the petitioner Karkhana to compute annual bonus payable to the seasonal employees for the year 1979-80 to 1980-81 after including the retention allowance received by them in their annual total wages for the purpose of payment of bonus. There is no merit in the petition which deserves to be dismissed and same is dismissed with costs quantified @ Rs. 10,000/- to be paid by the petitioner to the respondent union as the petitioner Karkhana has dragged the seasonal workers from one Court to another without any valid justification and deprived them of their legitimate claim. There is no substance in the matter. The writ petition is dismissed. Rule is discharged.