Case: Graham Trading Company (India) Limited Vs. Their Workmen

with the question of an implied term of the condition of service, it would be difficult to ignore the statement expressly made by the employer while making the payment from year to year.6. The question, however, whether the payment in this case was customary and traditional, still remains to be considered.In dealing with puja bonus based on an implied term of employment, it was pointed out by us in AIR 1959 SC l147, that a term may be implied, even though the payment may not have been at a uniform rate throughout and the Industrial Tribunal would be justified in deciding what should be the quantum of payment in a particular year taking into account the varying payments made in previous years. But when the question of customary and traditional bonus arises for adjudication, the considerations may be somewhat different. In such a case, the tribunal will have to consider: (i) whether the payment has been over an unbroken series of years; (ii) whether it has been for a sufficiently long period, though the length of the period might depend on the circumstances of each case: even do the period may normally have to be longer to justify an inference of traditional and customary puja bonus than may be the case with puja bonus based on an implied term of employment; (iii) the circumstance that the payment depended upon the earning of profits would have to be excluded and therefore it must be shown that payment was made in years of loss. In dealing with the question of custom, the fact that the payment was called ex gratia by the employer when it was made, would, however, make no difference in this regard because the proof of custom depends upon the effect of the relevant factors enumerated by us; and it would not be materially affected by unilateral declarations of one party when the said declarations are inconsistent with the course of conduct adopted by it; and (iv) the payment must have been at a uniform rate throughout to justify an inference that the payment at such and such rate had become customary and traditional in the particular concern. It will be seen that these tests are in substance more stringent than the tests applied for proof of puja bonus as an implied term of employment.7. Let us now see whether these tests are satisfied in the present case. The practice in the present case began in 1940 and was unbroken up to 1950. In between there was an adjudication in 1948 to which the company was a party. At that time it was said on behalf of the company before the industrial tribunal that some bonus was being paid and that there was no intention to discontinue it and consequently the tribunal did not adjudicate upon the matter, which shows that the company recognised the traditional and customary nature of the payment and it assured the tribunal that there was no intention then to discontinue the payment. The payment was continued from 1949 to 1951. In 1952, there was some dispute and originally the company paid one months wages as advance of pay and not as bonus some of the workmen, however, accepted the payment while others did not, because they were not satisfied with the amount being paid as advance of pay. The chairman of the board of directors of the company visited Calcutta in 1952 and then on the representation of the workmen the advance was converted into one months bonus and even those workmen who had not accepted the advance were allowed to draw the bonus. It cannot therefore be said that there was any break in the payment of bonus from 1940 to 1952, for if the chairman had not converted what was advance of pay into bonus in December 1952, the workmen might have raised the dispute even in that year and then there would have been no break up to 1951. So there has been unbroken payment and the period has been sufficiently long to justify an inference of customary and traditional bonus. It was pointed out that in four years during this period the payment was made in November and December and not about the time of the pujas; and, therefore, it could not be said that this was traditional and customary puja bonus. The delay in payment is not in our opinion material in this case, for one of the directors of the company, who appeared as a witness, stated as to this one months bonus that it was paid by the company to help its staff during pujas.8. The condition that the payment should have been made in years of loss also to exclude the hypothesis that it was paid only because profits had been made, has also been satisfied, for the evidence is that payments were made in at least two years of loss. Lastly, the condition that payment should have been at a uniform rate has also been satisfied because one months basic wage is the quantum of bonus from 1940 right up to 1952 without any change. It is true that in December 1951 further bonus for half a month was paid; but that year was a year of profit in which cloth-bonus for half a month was specially paid. Thus the rate so far as the puja bonus is concerned has always remained uniform at one months basic wage. It is true that the workmen pitched their demand too high for three months bonus in 1953. But that does not in our opinion betract from the inference to be drawn from the facts, proved in this case. All the conditions, therefore, of a customary and traditional bonus are satisfied in this case and there is no reason to interfere with the order of the Appellate Tribunal, though we should like to make it clear that we do not agree with the observations of the Appellate Tribunal in connection with the profits bonus aspect of the matter.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8. The condition that the payment should have been made in years of loss also to exclude the hypothesis that it was paid only because profits had been made, has also been satisfied, for the evidence is that payments were made in at least two years of loss. Lastly, the condition that payment should have been at a uniform rate has also been satisfied because one months basic wage is the quantum of bonus from 1940 right up to 1952 without any change. It is true that in December 1951 further bonus for half a month was paid; but that year was a year of profit in which cloth-bonus for half a month was specially paid. Thus the rate so far as the puja bonus is concerned has always remained uniform at one months basic wage. It is true that the workmen pitched their demand too high for three months bonus in 1953. But that does not in our opinion betract from the inference to be drawn from the facts, proved in this case. All the conditions, therefore, of a customary and traditional bonus are satisfied in this case and there is no reason to interfere with the order of the Appellate Tribunal, though we should like to make it clear that we do not agree with the observations of the Appellate Tribunal in connection with the profits bonus aspect of the matter.