Case Note & Summary
The dispute arose between two employees of the United Bank of India and the bank regarding the entitlement to a customary bonus paid annually on the eve of Pooja. The employees contended that they had received this bonus for over 16 years, irrespective of the bank's profits, and argued that this established a legal right to the bonus as a condition of service. The bank contested this claim, asserting that the bonus was not customary but rather a result of negotiations and related to the bank's profitability. The Labour Court dismissed the employees' application, stating that there was no existing right to a customary bonus, and the Supreme Court was called upon to review this decision. The Supreme Court upheld the Labour Court's findings, emphasizing that the payments did not satisfy the legal tests for a customary bonus, which include consistent payment over years, uniformity in rate, and independence from profit. The court noted that the concept of a customary bonus was not applicable to nationalised banks, as they are government-owned entities and must maintain uniformity in employee benefits across all banks. Ultimately, the court dismissed the appeal, affirming that the employees had not established a legal right to the claimed bonus under the Industrial Disputes Act.
Headnote
A) Industrial Disputes - Customary Bonus - Legal Right to Customary Bonus - Industrial Disputes Act, 1947, Section 33-C(2) - Employees claimed entitlement to a customary bonus based on long-standing practice; however, the court found that the payments did not meet the legal criteria for customary bonuses as they were contingent on profit and not uniformly paid. Held that the claim was not maintainable under the Act (Paras 1-10).
Issue of Consideration
Whether the bonus paid to the employees constituted a customary bonus under the Industrial Disputes Act, 1947.
Final Decision
The Supreme Court dismissed the appeal, affirming that the employees did not have a legal right to the customary bonus as claimed, and that the payments did not meet the legal criteria for customary bonuses under the Industrial Disputes Act, 1947.
Law Points
- customary bonus
- Industrial Disputes Act
- 1947
- section 33-C(2)
- tests for customary bonus
- nationalised banks
