BURMAH SHELL OIL STORAGE AND DISTRIBUTING COMPANY OF INDIA LTD Vs. REGIONAL PROVIDENT FUND COMMISSIONER DELHI

JUDGEMENT

(1.) The question which arises for determination in this petition filed under Article 226 of the Constitution of India is whether an ad hoc payment made to employees by an employer in pursuance of a settlement arrived at between the employer and the union representing the employees is "basic wages" within the meaning and for the purposes of the Employees' Provident Funds and Family Pension Funds Act, 1952, hereinafter referred to as the Act.

(2.) The facts leading to the filing of the petition under Article 226 of the Constitution are these. The petitioner is an employer and its employees, as represented by the Petroleum Workers Union, respondent No. 2, are covered by the provisions of the Act. Respondent No. 1. is the Regional Provident Fund Commissioner, Delhi, and the Union of India is respondent No. 3. Disputes were raised by respondent No. 2, which were referred for conciliation to the Conciliation Officer, Delhi, as contemplated by the Industrial Disputes Act, 1947. A settlement was arrived at between the employer and the employees and the Memorandum of settlement postulated by Section 12(3) of the Industrial Disputes Act read with Rule 58 of the Rules framed under that Act was reduced to writing and signed on March 21, 1970 (Annexure 'A' to the position). In consequence, the petitioner and its employees became bound by the Settlement arrived at. The settlement provides, inter alia, that the parties in consideration of the settlement arrived at on March 21, 1970 terminate an earlier settlement dated March 22, 1968. Further, the workman agree that there was no subsisting dispute thereafter and that all demands, whether pending in conciliation or before the company or before Industrial Tribunal shall be deemed to be settled so far as is provided in the settlement and that the rest shall be deemed to have been withdrawn. It was specifically agreed by Clause VIII of the settlement dated March 21, 1970 that the settlement shall come into force with immediate effect from the date of signing and shall remain in force until December 31, 1972 and continue in operation thereafter until the expiry of two months' notice of termination in writing served by either party on or after December 31, 1972. Among the various points on which settlement was arrived at. the workmen agreed to the employer's right to undertake such reorganisation measures as it considers necessary in the interest of promoting productivity and efficiency without prejudice to the legal rights of both the parties and ensuring that in pursuance of such reorganisation there will be no loss in the gross remuneration of any workmen. In consideration of this undertaking by the workmen, the employer agreed not to retrench any of the workmen during the period of settlement. With regard to the demand for bonus by the workmen the employer agreed that it will pay bonus for the years 1967, 1968, 1969, 1970, 1971 and 1972, to all workmen in labour and clerical cadres in the service of the employer and who have worked 30 days or more during the year for which the bonus is payable at the rate of 25 per cent of the annual basic wages actually earned during the said year in full and final settlement. It was stated that the employer had already offered bonusor the years 1967 and 1968 at the rate of 4 per cent of the gross wages earned, and where the bonus for the said years has been accepted, then only the difference between 25 per cent basic and 4 per cent gross shall be paid as bonus for the years 1967 and 1968. It was also agreed that the bonus for the years 1967, 1968 and 1969 will be paid before April 30, 1970 and thereafter for each of the remaining years mentioned earlier by the 15th February of the respective year following. It is worth noting that in Clause IV (b) it has been set out that the parties agrees that the bonus agreed to be paid was part of a package deal and would not be treated as a precedent for any purposes whatsoever in respect of future bonus for the year 1972 onwards which would be payable in accordance with the provisions of the payment of Bonus Act, 1965. Clause V of the said settlement reads as under :

(3.) It is common case that the settlement was duly implemented.