Case Note & Summary
The dispute arose between the workmen of an establishment and their employer regarding the entitlement to an attendance bonus in addition to the profit bonus mandated by the Payment of Bonus Act, 1965. The workmen had been receiving an attendance bonus prior to the enactment of the Act, which led to the question of whether this bonus could coexist with the statutory bonus. The Industrial Tribunal ruled in favor of the workmen, affirming their right to receive both bonuses. However, the employer contested this decision in the Patna High Court, arguing that the attendance bonus should not be payable once the statutory bonus was established under the Act. The High Court sided with the employer, referencing the case of Sanghi Jeevaraj Ghewar Chand, which concluded that the workmen were not entitled to the attendance bonus. The Supreme Court, upon review, noted that the High Court's interpretation was flawed as it did not consider that the attendance bonus was a customary payment that existed prior to the Act and was not governed by it. The Court emphasized that the Payment of Bonus Act does not nullify customary bonuses and that the workmen should have received their attendance bonus irrespective of the statutory provisions. Consequently, the Supreme Court restored the Tribunal's award and directed that the attendance bonus be paid with interest at 9% per annum from the due date until disbursement. The appeal was allowed with costs assessed at Rs. 2,000.
Headnote
A) Labour Law - Bonus Entitlement - Workmen's Right to Attendance Bonus - Payment of Bonus Act, 1965, Section 10 - The Tribunal found that workmen were entitled to attendance bonus in addition to the statutory bonus under the Act, which was challenged by the employer. The High Court's reliance on previous case law was deemed incorrect as it did not address the entitlement to customary bonuses post the Act's enactment. Held that attendance bonus is outside the purview of the Act and should be awarded (Paras 928-931).
Issue of Consideration
Whether workmen are entitled to payment of attendance bonus over and above the profit bonus under the Payment of Bonus Act, 1965.
Final Decision
The Supreme Court allowed the appeal, restoring the Tribunal's award for attendance bonus and directed payment with interest at 9% per annum from the due date until disbursement.
Law Points
- Payment of Bonus Act
- 1965
- customary bonus
- attendance bonus
- statutory bonus
- Industrial Disputes Act
- 1947
