LexWORKMEN OF KETTLEWELL BULLEN AND COMPANY LTD. versus KETTLEWELL BULLEN AND COMPANY LTD.
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A WORKMEN OF KETTLEWELL BULLEN AND COMPANY LTD. B v. KETTLEWELL BULLEN AND COMPANY LTD. / JANUARY 6, 1994 [KULDIP SINGH AND S.C. AGRAWAL, JJ.] Labour Law: Industrial Disputes Act, 1947: S.l<>-Customary Bonus- Industrial dispute regarding Bonus paid to workmen under settlements befo1e Puja festival i"espective of earning/profits from 1959 throughout and from C 1965 to 1973 at a uniform rate of 10.5% of annual salary/wages-Claim for customary bonus for the period 1974 to 1977-Held, Bonus paid to workmen had ripened into customary bonus and they were entitled to it at the rate of 10.5% of annual salary/wages. The Payment of Bonus Act, 1965: ss.17, 34(3)-Bonus not linked with D earning/profits Payment of to workmen under settlements at a unifo~ rate of 10.5% of annual salary/wages from 1965 to 197J-,-lleld, bonus had ripened into customary bonus-Reference to s.34(3) in settlements would not . -t- atter nature of payment so as to convert it into a. bonus paid under the Act. E The respondent-company paid bonus to its workmen for the years 1959-1963 at'the rate of three-and-a-quarter months' basic pay, for the year 1964 at the rate of 4 per cent in accordance with the payment of bonus ordinance 1965, and for the years 1965 to 1973 at a uniform rate of 10.SO per cent of the salary or wages. The said bonus was generally paid before the commencement of Puja Festival and irrespective of earning or profits. F In the year 1979 the Government referred to the Tribunal the dispute ~ whether the workmen were entitled to customary bonus for the accounting years 1974 to 1977. The Tribunal held that the bonus which was being paid by the G mamagement had ripened into a customary bonus due to long usage and for the years 1974 to 1977 the workmen were entitled to fixed customary bonus at the rate of 10.S percent of their annual -salary or wages. The respondent-company challenged the award by filing a writ petition before the High Court. 1:1Ie Single Judge set aside the award holding that the workmen had failed to establish that they were entitled to payment of H customary bonus. In appeal, the Division Bench of the High Court, con- 22 - WORKMEN OF KB. & CO. v. KB. & CO. 23 firming the judgment of the Single Judge, held that the payment made by A the management could not be regarded as customary bonus because it was not being paid at a uniform rate throughout; the settlements of 1966, 1977 and 1973 were stated to have been entered into under s.34(3) of the Payment of Bonus Act, 1965 and the bonus paid thereunder was bonus contemplated under the Act. Hence the appeal by the workmen. Allowing the appeal, this Court HELD: 1.1. Having regard to the facts and circumstances of the case B the tribunal was justified in drawing an inference that the bonus that was being paid by the respondent-company to the appellants was customary or C traditional bonus on the occasion of Puja festival payable at the rate of 10.S per cent of the salary or wages. The tribunal rightly held that for the years 1974 to 1977 the appellants were entitled to payment of customary bonus at the rate of 10.5 per cent of the annual salary or wages earned by each workman concerned in each such years. The High Court was in error D in holding otherwise and setting aside the award. [32-H; 33-A·C] 1.2. The High Court was not right in holding that the bonus was not being paid at a uniform rate throughout. The payment had been made by the company by way of bonus over an unbroken series of years and the said payment did not depend upon the earning and profits. Though during E the years 1959 to 1963 it was paid at the rate of three and a quarter months' basic pay and in the year 1964 it was paid at the rate of 4 per cent, but in subsequent years from 1965 to 1973 it was paid at a uniform rate of 10.50 per cent of the salary or wages. The payment made during the years 1959 to 1964 could be ignored and on the basis of the payment made during the F years 1965 to 1973 at the uniform rate of 10.50 per cent of the salary or wages it could be said that payment was made at a uniform rate for an unbroken period of 9 years from 1965 to 1973, which was a sufficiently long period. f33-A-D] :-, ·-=- _ ,~ 1.3. The payments made under the~settlements had no link with the G profit. In the circumstances, reference to s. 34(3) of the Payment of Bonus -"'\ Act, 1965 in the settlements must be regarded as having been made by way
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