Case Note & Summary
The dispute arose between the Rashtriya Mill Mazdoor Sangh and The Model Mills regarding the entitlement of employees to bonus for the accounting years 1964-65 to 1967-68. The Union served a notice of demand for bonus, which led to conciliation efforts that failed, resulting in references to the Industrial Court. The employer contended that the appointment of an authorised controller under Section 18A of the Industries (Development and Regulation) Act, 1951 excluded its employees from the Bonus Act's application. The Industrial Court upheld this contention, rejecting the references. The Supreme Court, however, found that the appointment of an authorised controller did not change the status of the industrial undertaking to one run under the authority of the Central Government, thus the employees were not excluded from the Bonus Act. The Court quashed the Industrial Tribunal's award and remitted the matter for merits consideration, emphasizing that the intention of the Bonus Act was to exclude employees of industries as a whole, not individual establishments. The Court clarified that the expression 'under the authority of any department of the Central Government' pertains to industries, not individual establishments, ensuring that employees in similar industries are treated equally regardless of management changes. The judgment reinforced the principle that statutory bonuses are a right for employees under the Bonus Act, irrespective of management control changes.
Headnote
A) Labour Law - Payment of Bonus - Applicability of Bonus Act - Employees of industrial undertaking under authorised controller - Employees are not excluded from Bonus Act under Section 32(IV) of the Payment of Bonus Act, 1965 - The Supreme Court held that the appointment of an authorised controller does not change the status of the industrial undertaking to one carried on under the authority of the Central Government, thus employees remain entitled to bonus. (Paras 768-769) B) Labour Law - Industrial Relations - Demand for Bonus - Failure of conciliation - The Industrial Court's rejection of references for bonus was erroneous as it did not consider the entitlement of employees under the Bonus Act. The Supreme Court quashed the Industrial Tribunal's award and remitted the matter for disposal on merits. (Paras 769-770) C) Labour Law - Definition of Industry - Authority of Central Government - The expression 'under the authority of any department of the Central Government' does not apply to individual establishments but to industries as a whole. The Supreme Court clarified that the intention of the framers of the Bonus Act was to exclude employees of establishments engaged in industries carried on under the authority of the Central Government, not individual cases. (Paras 764-765)
Issue of Consideration
Whether employees of an industrial undertaking managed by an authorised controller under Section 18A of the Industries (Development and Regulation) Act, 1951 are entitled to payment of bonus under the Payment of Bonus Act, 1965.
Final Decision
The Supreme Court allowed the appeals, quashed the Industrial Tribunal's award, and remitted the matter for disposal on merits, holding that the appointment of an authorised controller does not exclude employees from the Bonus Act.
Law Points
- Payment of Bonus Act
- 1965
- Section 32(IV)
- Industries (Development and Regulation) Act
- 1951
- Section 18A
- Sick Textile Undertaking (Nationalisation) Act
- 1974
- Section 5(2)(C)
- statutory bonus
- industrial relations
- management control
