TMI Blog1962 (9) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... generally may not be taken necessarily to apply to the particular scheme in the case of writ petition No. 64 of 1962. The brief facts necessary for present purposes are these. Petitioner No.1 (hereinafter' referred to as the Company) is a public limited company engaged in the manifacture of engineering goods, structural fabrication and rolling stock, and the Act applies to the Company. The Company has a production bonus scheme in force which provides for payment of production bonus over and above wages fixed by the major engineering award of 1958, published in the Calcutta gazette dated November 5, 1958, which governs 74 major engineering concerns in that region including the Company' That award is still in force and has fixed basic wages and dearness allowance on time rate basis for the entire major engineering industry. In addition to basic wages and dearness allowance payable under the award, the Company has two production bonus schemes one for the hourly rated workers and the other for the rest. It is unnecessary to go into the details of the two schemes; but the main feature of the two schemes is that production bonus begins to be paid on certain rates specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down that, if any difficulty arises in giving effect to the provisions of the Act,, and in particular, if any doubt arises as to certain matters including ,,whether the total quantum of benefits to which an employee is entitled has been reduced by the employer , the Central Government may by order, make such provision or give such direction, not inconsistent with the provisions of the Act, as appears to it to be necessary or expedient for the removal of the doubt or difficulty, and the order of the Central Government in such cases shall be final. It appears that difficulties and doubts arose on the question whether production bonus could be taken into account in calculating the contribution of 6-1/4 per centum under s. 6 of the Act, and the Central Government directed about the March 7, 1962 that the question whether production bonus should be liable to provident fund deduction under the Act had been reexamined by it and it had been decided that production bonus, payable as part of a contract of employment either at a flat, rate or at a rate linked to the quantum of work turned out satisfied the definition of basic wages under s. 2 (b) of the Act. The Company was further dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a certain part of the total wages is being separated for certain purposes only. Therefore production bonus being in the nature of incentive wage must be included in the definition of the term basic wages in s. 2(b), as basic wages there defined are all emoluments which are earned by an employee while on duty or on leave with wages in accordance with the terms of the contract of employment and which are paid or payable in cash to him......... Therefore, production bonus being in the nature of an incentive wage is included in the terms all emoluments in the definition of basic wages , for production bonus is earned by an employee while on duty in accordance with the terms of the contract of,employment. It is further submitted that when the word bonus ' was used in el. (ii) of the exceptions to s. 2(b), it only referred to profit bonus, as it was well established before 1952 that the use of the word bonus without any qualification referred to profit bonus only in industrial adjudications. Therefore, when cl. (ii) of the exceptions to s. 2(b) excepted bonus without any qualification it referred only to profit bonus and not to any other kind of bonus. The main q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions contained in the three clauses. It is clear however from cl. (ii) that from the definition of the word basic wages certain earnings were excluded, though they must be earned by employees in accordance with the terms of the contract of employment. Having excluded dearness allowance from the definition of basic wages . a. 6 then provides for inclusion of dearness allowance for purposes of contribution. But that is clearly the result of the specific provision in s.6 which lays down that contribution shall be 6-1/4 per centum of the basic wages, dearness allowance and retaining allowance (if any). We must therefore try to discover some basis for the exclusion in cl. (ii) as also the inclusion of dearness allowance and retaining allowance (for any). in s. 6. Itseems that the basis of' inclusion in s. 6 andexclusion in cl. (ii) is that whatever is payable in all concerns' and is earned by all permanent employees is included for the purpose, of contribution under s. 6, but whatever is not payable by all concerns or may not be earned by all employees of a concern is excluded for the purpose of contribution. Dearness allowance (for examples is payable in all concerns eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nus was used without any qualification in the clause, the legislature had in mind every kind of bonus that may be payable to an employee. It is not disputed on behalf of the respondents that bonuses other than profit bonus were in force and well-known before the Act came to be passed in 1952. For example, the Coal Mines Provident Fund and Bonus Schemes Act, No. 46 of 1948, provided for payment of bonus depending on attendance of employees during any period. Besides the attendance bonus, four other kinds of bonus had been evolved under industrial law even before 1952 and were in force in various concerns in various industries. There was first production bonus, which,. was in force in some concerns long before 1952 (see Messrs. Titaghur Pa_per Mills Co. Limited v. Its Workmen). ([1959] Supp. 2 S.C.R. 1012) Then there was festival or puja bonus which was in force as an implied term of employment long before 1952 (see Messrs. Ispahani Limited Calcutta v. Ispahani Employees' Union) ([1960] 1 S.C.R. 24.). Then there was customary bonus in connection with some festival (see The Graham Trading Co. (India) Limited v. Its Workmen). ([1960] 1 S. C. R. 107.). And lastly, there was profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter was put beyond controversy that the use of the word bonus without any qualification was with reference to profit bonus by adding the year for which the bonus was being claimed. It would therefore be not right to say that in industrial adjudications before 1952, bonus without any qualifying word meant profit bonus and nothing else. Further though the word profit was not used to qualify the word bonus , the intention was made quite clear when profit bonus was meant by using the words for the year so and Sol# after the word bonus . We are therefore not prepared to accept that where the word bonus is used without any qualification it only means profit bonus and nothing else. On the other hand, it seems to us that the use of the word bonus without any qualifying word before it or without any limitation as to year after it must refer to bonus of all kinds known to industrial law and industrial adjudication before 1952. The reason for the exclusion of all kinds of bonus is also in our opinion the same which led to the exclusion of house- rent allowance, overtime allowance, commission and any other similar allowance, namely, that payment of bonus may not occur in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sic wages and therefore production bonus which is a kind of incentive wage would be included. This court had occasion to consider production bonus in Messrs. Titaghur Paper Mills Co. Ltd. v. Its Workmen,( [1959] Supp 2 S. C.R. 10 12.) It was pointed out that the payment of production bonus depends upon production and is in addition to wages. In effect, it is an incentive to higher production and is in the nature of an incentive wage . rho straight piece rate plan where payment is made according to each piece produced is the simplest of incentive wage plans. In a straight piece rate plan, payment is made according to each piece produced and there is no minimum and the worker is free to produce as much or as little as he likes, his payment depending upon the number of pieces produced. But in such a case payment for all that is produced would be basic wage as defined in s. 2(b) of the Act, even though the worker is working under an incentive wage plan. The difficulty arises where the straight piece rate system cannot work as when the finished product is the result of the co-operative effort of a large number of workers each doing a small part which contributes to the result. In such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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