CIPLA EMPLOYEES UNION Vs. CIPLA LIMITED

JUDGEMENT

(1.) THE first respondent, which carries on the business of manufacturing drugs and pharmaceuticals, has establishments at Bombay Central, Vikhroli and Kanjurmarg in the City of Mumbai and at Patalganga, Banglore and Pune. The petitioner is a recognised Union for the establishment of the first respondent within the City of Mumbai. The Company employed at the material time 140 workmen at Vikhroli and 105 at Bombay Central. Under the provisions of the Payment of Bonus Act, 1965 ("the Act"), the maximum salary within which employees were entitled to the payment of bonus was Rs. 2500/- during the period 1st April, 1989 and 31st March, 1994 and Rs. 3,500/- thereafter, during 1st April, 1994 and 31st March, 1995. The salary ceiling for calculating bonus under the Act was Rs. 1,600/- between 1st April, 1989 and 31st March, 1994 and Rs. 2,500/- for the period 1st April, 1994 to 31st March, 1995. The first respondent was and continues to be under a statutory obligation under the provisions of the Act to pay bonus to employees eligible to receive it. Employees whose salaries exceed the ceiling prescribed by the Act are not entitled to bonus under the Act. The first respondent at least since 1st April, 1989 provided a payment, styled as an ex gratia. This ex gratia consisted of two components. The first component was equivalent to bonus computed at the rate of 20%, the rate provided by the Act to those employees who were eligible to the payment of bonus under the Act. A majority of the employees of the first respondent were in receipt of salaries which exceed the ceiling prescribed by the Act. To all these employees, the first respondent provided bonus at the same rate of 20% as was applicable to those employees who were eligible to receive bonus under the Act. For the years 1-4-1989 to 31-3-1990, 1-4-1990 to 31-3-1991, 1-4-1991 to 31-3-1992, 1-4-1992 to 31-3-1993 and 1-4-1993 to 31-3-1994 a uniform payment of R. 3,840/- was provided to all employees at the Mumbai Central, Vikhroli and Kanjurmarg establishments of the first respondent. This first component, which for the purposes of convenience in description may be referred to as "ex gratia-I", was provided by the first respondent without any industrial settlement having been entered into with the petitioner. This is common ground between the parties and is accepted by both the learned Counsel as reflecting the correct factual position. The first component, it would be material to reiterate, was paid at a fixed rate of Rs. 3,840/- between 1-4-1989 and 31-3-1994 and there was no variation in this figure based upon the profits which were earned by the first respondent. The second component of payment which for the sake of convenience may be described as "ex gratia-II" was paid under settlements which were entered into by the petitioner with the first respondent from year to year. Ex gratia-II was paid at the rate of Rs. 1000/- for 1989-90, Rs. 1,660/- for 1990-91, Rs. 2,560/- for 1991-92 and Rs. 3,160/- each for 1992-93 and 1993-94. The total amount of ex gratia which was paid to the workmen comprised of the sum total of these two payments, the first being a fixed payment of Rs. 3,840/- per year between 1989 and 1994 without any industrial settlement and the second, a variable payment which ranged from Rs. 1000 to Rs. 3160/- between 1989 and 1994 and which was entirely on the basis of negotiated industrial settlements.

(2.) IN so far as the payment of Ex-gratia-II was concerned, a reference may be made to one of the settlements which was entered into between the petitioner and the first respondent for, the subsequent settlements, contained broadly the same provisions. On 1st October, 1990, a settlement was entered into between the petitioner and the first respondent in which it was recorded that the union had approached the company "with a request for payment of an ex gratia amount towards the continuing co-operation being extended by the workmen in improving productivity, maintaining discipline and in the interest of peaceful and harmonious industrial relations". The terms of the settlement then provided in Clause (1) that the company shall pay to the permanent workmen a sum of Rs. 1,500/- as ex gratia and that the amount will be adjusted pro rata to the attendance during the period 1st April, 1989 to 31st March, 1990. Clause (4) of the settlement provided as follows :

(3.) SOMETIME in July 1995, a lockout came to be declared by the first respondent as a result of a situation of industrial unrest. According to the first respondent, the lockout was a result of agitational activities adopted by the workmen at Vikhroli who are organized under the banner of the petitioner-union. Accordingly, for the period 1st April, 1994 until 31st March, 1995, the first respondent entered into a settlement purportedly with 10 individual workmen of the company, who are borne on the rolls of the establishment at Mumbai Central. According to the first respondent, an individual settlement with 10 workmen was necessitated by virtue of the fact that the employees at the Mumbai Central unit had resigned from the membership of the petitioner. Be that as it may, Clause 4 of the settlement contained the same clause as in the earlier settlements, setting out that the payment on ex gratia was as "a very special case" and shall not create any precedent for the subsequent years. Clause 5 of the settlement thereafter provided as follows :