WELLMAN (INDIA) PVT. LTD. versus THE EMPLOYEES STATE INSURANCE CORPORATION

Citation: [1993] SUPP. 3 S.C.R. 568 · Decided: 03-11-1993 · Supreme Court of India · Bench: P.B. SAWANT, YOGESHWAR DAYAL

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Judgment (excerpt)

A 
WELLMAN (INDIA) PVT. LTD. 
v. 
THE EMPLOYEES' STATE INSURANCE CORPORATION 
NOVEMBER 3, 1993. 
B 
(P.B. SAWANT AND YOGESHWAR DAYAL, JJ.J 
Employees' State Insu;ance Act, 1948: Sections 2(22), 39 and 40-At-
tendance bonus payable under a settlement-Fonning part of a contract of 
employ_ment-Whether "Wages''--Demand for payment of contribution of such 
C payment-Validity of. 
A Bonus Scheme was formulated as part of a settlement entered into 
between the appellant-Company and Union of Workmen in the course of 
concmation proceeding before the Conciliation Officer under Section 12(3) 
of the Industrial Disputes Act, 1947. According to the Bonus Scheme a 
D worker was entitled to be paid an attendance bonus upto a maximum of 4 
days wages, depending on the number of days a worker was present during 
a quarter. The Bonus Scheme had become an express contract of employ· 
ment since the date of the settlement. 
E 
The appellant-Company filed an application before the Employees' 
Insurance Court against the respondent-Corporation for a declaration 
that the demand of the Corporation of the employees' contribution and the 
employer's contribution on the payment made under the Company's 
quarterly Attendance Bonus Scheme was not valid. The Insurance Court 
allowed the application. 
F 
The respondent-Corporation preferred an appeal before the High 
Court against the Insurance Court's decision. A Single Judge allowed the 
appeal holding that the attendance bonus was payable under the terms of 
the contract and, therefore, was 'Wages' within the meaning of section 
G 2(22) or the Employees' State Insurance Act, 1948. The Division Bench 
confirmed the Single Judge's decision. Hence the appeal by the appellant· 
Company. 
On the question whether the attendance bonus was remuneration 
within the meaning orthe first part of the definition of'wages' or was 'other 
H additional remuneration' within the meaning of the second part of the said 
568 
WELLMAN PVT. LTD. v. E.S.I.CORPORATION 
569 
definition given in Section 2(22) of the Act. 
A 
Dismissing the appeal, this Court. 
HELD : 1.1. The attendance bonus payable to the employee is under 
the terms of the settlement which has become a part of the contract of 
employment. Hence the said bonus will fall within the ftrst part of the B 
definition of 'wages' under Section 2(22) of the Act which covers all 
remuneration paid or payable in cash to an employee if the terms of 
contract of einploym~nt, express or implied, were fulfilled. [576-D-E] 
1.2. The expression 'other additional remuneration, if any, paid •...•.... ' C 
in the second part of the said definition implies that the said remuneration 
is not payable under any contract of employment, express or implied. This 
is so, because while the first part of the definition refers to remuneration 
under the contract of employment, the second part does not refer to 
remuneration under any such contract. The definition is inclusive and D 
includes only such payments outside the contract as are mentioned in its 
second part and none other. The expression, 'if any, paid' after the words 
'other additional remuneration' will be inconsistent if the remuneration is 
payable under the contract of employment since such payment is not 
dependent on the will of the employer but on the fulfillment of the terms E 
of the contract. The second part of the definition includes only such 
contractual payments as are specifically mentioned therein and the ex-
clusionary part does not include the attendance bonus like the present 
which is payable as stated above under a contract. Hence, the expression 
'other additional remuneration, if any, paid' not only does not refer to 
remuneration payable under any contract but refers to such remuneration 
which is payable at the will of the employer. [576-E-H, 577-AJ 
F 
1.3. Every remuneration that is payable under the contract would, 
therefore, fall under the first part of the definition. [577-B] 
Bala Subramanya Rajaram v. B.C. Patil & Ors., [1958) S.C.R. 1504; 
M/s. Harihar Polyfibres v. Regional Director, ES! Corporation, [1984) 4 
S.C.C. 324; Bridge & Roof Co. (India) Ltd. v. Union of India, [1963) 3 S.C.R. 
978 and Jay Engineering Works Ltd. & Ors. v. The Union of India & Ors., 
G 
[1963) 3 S.C.R. 995, referred to. 
H 
570 
SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R. 
A 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6019 of 
B 
1993. 
Form the Judgment and order dated 23rd Nov. 1982 of the Bombay 
Hig

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