MANAGEMENT OF CONSOLIDATED COFFEE ESTATE LIMITED Vs. WORKMEN

JUDGEMENT

(1.) THIS appeal, by special leave, is by the employer company against the award dated November 18, 1965 of the Special Industrial Tribunal, Bangalore, by which the Tribunal awarded bonus at the rate of 6 months basic wages for the year 1962-63 to the staff members of the company. There were in the company's employment at the relevant time staff members, artisans and daily rated labourers, but as the reference to the Tribunal was confined only to the question of bonus payable to the staff members, we are not concerned in this appeal with the artisans or the labourers.

(2.) THE appellant-company has been paying bonus to the staff members for the last several year. The practice followed by the company was first to fix the amount of bonus which it was prepared to pay and then to negotiate with the employees as to differences, if any, between them. Bonus thus was so far not determined on the basis of the Full Bench Formula as approved by this Court in Associated Cement Companies v. Its Workmen (1959) S.C.R. 925. For the year 1960-61 the company paid bonus to staff members equal to 8 1/2 months basic wages. For 1961-62 the bonus paid was at the rate of 5 1/2 months basic wages. For the year in question, i.e., 1962 63, the company finalised its accounts on October 31, 1963. The accounts showed a net profit of Rs. 18.19 lacs. In its P & L account the company, showed Rs. 36.39 lacs as expenditure under the heading "salary, wages and bonus". This amount included the sum Rs. 1, 15, 000 for bonus.

(3.) THE evidence of the Managing Director was that there were discussions between the union and the company in December 1963. The union demanded bonus at the rate of 9 1/5 months basic pay but came down to 7 months basic pay. The company, on the other hand, offered first bonus at the rate of 5 1/2 months basic pay, but went upto 6 months basic pay. The union did not agree to the offer with the result that negotiations between the parties broke down. His evidence further was that the company had given to the Managing Director the mandate to offer bonus upto 6 months basic pay in full settlement of the dispute. But that also was not acceptable to the union. Three artisans and one staff member accepted bonus at the rate of 5 1/2 months' basic pay and since they accepted that amount unconditionally the company paid them at that rate. According to the Managing Director the offer to pay bonus at the rate of 5 1/2 months' basic pay was kept open but as the union did not accept it and approached the conciliation officer, the offer lapsed and was not longer open.