MANAGING DIRECTOR CHALTHAN VIBHAG SAHAKARI KHAND UDYOG CHALTHAN DISTRICT SURAT Vs. GOVERNMENT LABOUR OFFICER

JUDGEMENT

(1.) The controversy in this case is whether for the purpose of bonus to the workmen employed in the Chalthan Vibhag Sahakari Khand Udyog, Chalthan which is a seasonal establishment retaining allowance paid to such workmen should be regarded as remuneration or wages under the Payment of Bonus Act, 1965. The question arises under the following circumstances.

(2.) The Industrial Court, Gujarat, by its Award dated July 11, 1980 held that the retaining allowance paid to the workmen could not be included for the purpose of calculation of bonus and, therefore, the demand of the workmen was .not justified. Thereupon, the workmen challenged the Award by a Writ Petition in the Gujarat High Court. The High Court by its judgment dated December 15, 1980 set aside the Award of the Industrial Court and held that the retaining allowance falls within the definition of the expression 'salary or wage' given in Section 2 (21) of the Payment of Bonus Act, 1965 so as to attract the payment of bonus in the context thereof under Section 10 of the Act.

(3.) For a proper understanding of the question involved, it is necessary to state a few facts. Chalthan Vibhag Sahakari Khand Udyog runs a seasonal factory which crushes sugarcane and produces sugar. It does not work for all the 12 months in a year. There is an off-season during the year during which the factory remains closed. For this off season during which the workmen suffer forced idleness, full wages are not paid. There are several categories of workmen employed by the management. There are unskilled workmen who are paid 10% of the basic wages and dearness allowance as retaining allowance during the off-season. There are also semi-skilled workmen who get 25% of the basic wages and dearness allowance as retaining allowance. The rest. i.e, skilled 'C' to supervisory class of workmen, are paid at the rate of 50% of basic wages and dearness allowance as retaining allowance during the off-season. The retaining allowance is paid to these workmen after 40 days of work in the next crushing season. Workmen in sugar factories in the State of Gujarat usually come from the State of Uttar Pradesh. During the off-season they engage themselves in different occupations. Retaining allowance is a sort of incentive which is offered to the workmen to attract them to return to the factory after the expiry of the off-season.