Case: Management of Churakulam Tea Estate Private, Limited Vs. Its Workmen &amp; Another

2. We may briefly refer to the circumstances, leading up to the passing of the award in question. The appellant owns the Churakulam Tea Estate, in Kottayam, Kerala State. From 1946 onwards, the Planters Association of Kerala (South India) used to enter into agreements, with the representatives of the workmen, from time to time, for the payment of bonus. The first agreement, in 1946, related to the payment of bonus for the years 1947, 1948 and 1949; and by Exhibitthe said agreement was extended for the years 1950 and 1951. A fresh agreement, Exhibitwas entered into in 1955, for payment of bonus for the years 1952,1953 and 1954  there appear to have been subsequent agreements also. There is no controversy that the appellant paid bonus for nine years, i. e., from 1947 to 1951 and 1953 to 1956. There is also no controversy that the payment of bonus, for these years, was not at a uniform rate. For instances, from 1946 to 1949 bonus was paid at 4% of the total earnings whereas, for the year 1950, it was increased to 8 1/2 % of the total earnings. From that year onwards an initial payment of 4% was fixed, leaving the balance to be determined byagreements. Again, in 1955 and 1956, the initial payment was raised to 6 1/4 % of the total earnings. So far as the year 1952 was concerned, the appellants case was that it had not paid any bonus, as such, but, on the other hand, it had made an ex gratia payment of Rs. 3/to each worker; but the Tribunal has not accepted this plea and it has held that the said payment must be treated as one having been made towards bonus. According to the appellant, it paid bonus for the years, mentioned above, because it was earning profits.3. For the years 1960 and 1961 also, the appellant paid bonus to its workers in accordance with theagreements. In respect of the yearsand 1959, there was a memorandum of settlement, Exhibitdated January 25, 1960, between the managements of the various plantations and their workers, relating to payment of bonus. So far as tea estates are concerned, the agreement provides for payment of bonus, at a particular percentage of the annual total earnings of a worker, for the three years in question, depending upon the total extent of the estates concerned. There is no controversy that, under Cl. 7 of this agreement, it was provided that the agreement will not apply to the appellants estate. Therefore, so far as the payment of bonus for these three years is concerned, the appellant was not a party to any agreement.4. The appellant, on the ground that it had not earned any profit during these years and, on the further ground that it was not bound by the agreement, Exhibitdeclined to pay any bonus for these three years. The workmen started an agitation claiming bonus at the rates mentioned in Exhibitand conciliation proceedings in that regard failed. Twentyseven workers, in the factory of the appellant, struck work on the afternoon of November 30, 1961. The management declined to pay wages, for that day, to these factory workers. The management also laid off, without compensation, all the workmen of the estate, from December 1, 1961 to December 8, 1961.5. The State Government, by its order dated May 24, 1962, referred three questions, for adjudication, to the Industrial Tribunal,961 for factory workers.Before the Tribunal, both the management and the workmen were agreed that the bonus, which was the subject of adjudication, was not to be on the basis of available surplus and the said aspect need not be considered by the Tribunal. The respondents also accepted that the bonus claim, made by them, was not for profit bonus, production bonus or bonus connected with any festival or celebration. On the other hand, the specific claim, for payment of bonus, by the workmen, was on the basis that the said payment had become traditional and customary; or, at any rate, it had become an implied condition of service. So far as the strike, on November 30, 1961, was concerned, according to the workmen the strike was legal and justified and that the factory workers were entitled to wages, for that day. It was the further case of the workmen that the lay off, from December 1, 1961 to December 8, 1961, was illegal and it disclosed a vindictive attitude, on the part of the management, and that the workmen were entitled to wages for that period also.7. The management resisted the claim of the workmen, in respect of all the three matters. Regarding the claim for bonus, it pleaded that it was not a party to the agreement, ExhibitThe management contended that the payment of bonus had not become either traditional, or customary, in the plantation industry, nor was it an implied condition of service. It also urged that inasmuch as the claim for bonus, in this case, was not connected with any festival and, as previous payments had not also been at an uniform rate, the question of payment of bonus having become either a customary payment, or payment by virtue of an implied condition of service, was not sustainable in law. According to the management, the strike, on November 30, 1961, was both illegal and unjustified and hence the factory workers, who went on strike, were not entitled to wages. The Management also pleaded that thefrom December 1 to December 8, 1961, was perfectly justified, in view of the conduct of the workmen of the estate.8. After referring to the fact of payment of bonus, by the plantation industry, from 1946 and onwards, though not at an uniform rate, the Industrial Tribunal held that payment of bonus could be considered to have become an implied condition of service. The Tribunal, inasmuch as it was admitted that the claim for bonus had nothing to do with any festival, held that the question of its being a customary or traditional bonus, in the strict sense of the word, did not arise for consideration. In consequence, the Tribunal only considered the alternative basis of the claim, viz., that the payment of bonus had become an implied condition of service.9. In this connection, the Tribunal referred to the decision, of this Court, in Ispahani Ltd., Calcutta v. Ispahani Employees Union, (1960) 1 SCR 24  =(AIR 1959 SC 1147  ) and held that a term, for paying bonus, may be implied, even though the payment may not have been at an uniform rate throughout; and, under such circumstances, it is open to the Tribunal itself to consider what should be the quantum of payment in a particular year. The Tribunal held that the tests laid down in Ispahanis case, (1960) 1 SCR 24  =(AIR 1959 SC 1147  ), about payment being unbroken and having been made for a sufficiently long period, under circumstances excluding the payment being made out of bounty or as ex gratia, were all satisfied, in the instant case. Having come to the conclusion that the payment of bonus had become an implied condition of service, for the purpose of fixing the quantum that shout be awarded, the Tribunal referred to the agreement, ExhibitWhile conscious of the fact that the appellant was specifically excluded from the operation of this agreement, the Tribunal was of the view that the percentage of bonus, fixed under Exhibitfor tea industry, could be safely adopted. On this basis, the Tribunal awarded to the workmen, bonus atper cent of the total earnings of the workmen, for each of the three years 1957, 1958 and 1959.10. The Tribunal was also of the view that the strike of the factory workers, on November 30, 1961, was both legal and justified and hence directed the appellant to pay wages for that day. The Tribunal further held that theof the workmen, by the management, for eight days from December 1, 1961, was without just cause and it was done as a retaliatory measure. It made the management liable for payment of wages to the workmen for this period.

Reasoning:
It will be seen from the above extract that an additional circumstance has also been insisted upon, in the case of customary or traditional bonus, that the payment must have been at a uniform rate throughout to justify an inference that the payment at such and such a rate had become customary and traditional in the particular concern. Therefore, even if the claim, in the case before us, is considered as a customary or traditional bonus, this test will have to be satisfied and, as mentioned earlier, it is lacking in this case.Pausing here it must be noted that the payment, at a uniform rate, was not found necessary for establishing a claim for payment of bonus, as an implied condition of service, as that claim was held to relate to a festival. This aspect has been missed by the Tribunal in the award under consideration, and it has proceeded on the basis that this Court has laid down that, notwithstanding that a payment is not at a uniform rate, nevertheless, a claim based on an implied condition of service, can be recognised, provided the other tests are satisfied.From the decisions, cited above, it follows that the Tribunal, in the instant case, was wrong in holding that an inference could be drawn for payment of bonus, as an implied condition of service, in the circumstances of the present case, the payment, admitted, was not uniform and was not connected with any festival. In our view, it is impossible to infer an implied condition of service, where payment has not been uniform in the past, unless such payment can he connected with some festival. In this case, admittedly, the payments have neither been uniform, nor were they connected with any festival.19. The claim cannot also be sustained; even as a customary or traditional bonus, because, apart from the fact that it is not connected with any festival, one of the essential ingredients, viz., that the payment should have been at a uniform rate throughout, is also admittedly lacking in this case.Therefore, the Tribunal was in error in awarding bonus for the three years in question.20.The second question, that arose for consideration by the Tribunal, related to the claim for wages, of thefactory workers, who went on strike on November 30,1961. There is nocontroversy that the factory workers alone went on strike, for half a day, on November 30, 1961. The Tribunal has awarded wages for this period. Mr.Gokhale, learned Counsel, contended that the strike was both illegal and unjustified.The events leading up to the strike, on that date, may be briefly noted. The conciliation proceedings relating to the claim for bonus having failed, the question of referring for adjudication to the Tribunal was under consideration of the Government. The Labour Minister had called for a conference of the representatives of the management and the workmen and the conference had been fixed on November 23, 1961. The representatives of the workmen attended the conference, but the management boycotted the same. It is the case of the workmen that to protest against the recalcitrant attitude of the management in not attending the conference, thefactory workers alone went on strike, from 1 P. M. on November 30,doubt if the strike, in this case, is hit bySection23 (a), it will be illegal underSection24 (1) (i) of the Act; but we have already held that it does not come underSection23 (a) of the Act. It follows that the strike, in this case, cannot be considered to beour opinion, this decision does not at all support the appellant.There is a fundamental fallacy, in this contention of the appellant, when it proceeds on the basis that the strike by the factory workers, on November 30, 1961, was directly in connection with the demand for bonus for the years 1957 to 1959. On the other hand the evidence, which has been placed before us by Mr. Puri, learned Counsel for the respondent, clearly establishes that the strike was as a protest against the unreasonable attitude of the management in boycotting the conference held on November 28, 1961, by the Labour Minister of the State. The evidence ofthe Secretary of the Union, is to the effect that to protest against the attitude of the management in boycotting the conference held on November 23, 1961, the factory workers went on a token strike for half a day, on November 30,1961. There is noof this witness, on this aspect. There is also nothing in the evidence adduced by the management to show that the strike on November 30, 1961 was not for the reason spoken to by the Union Secretary. Therefore, the strike must be held to be neither illegal nor unjustified and in consequence it must be further held that the factory workers are entitled to wages for that day. The finding of the Tribunal in this regard, is accepted.25. The last question, that arises for consideration, relates to the claim for wages of the workmen, for the period ofviz., December 1, 1961 to December 8, 1961. On the very day that the factory workers went on strike i.e., November 30, 1961, the management put up a notice, Ex.to the effect that since all the factory workers had gone on strike at 1 P. M. without previous intimation, the management was forced towithout compensation all the workmen in the entire establishment as from December 1, 1961, underSection25E (iii) of the Act which lays down that no compensation shall be paid to a workman who has beenff; is due to a strike or slowing down of production on the part of workmen in another part of the establishment. The correspondence shows that due to the intervention of the Deputy Labour Officer, the Management was assured, on December 7, 1961, that the workmen would not resort to any strike and accordingly, theHere, again, the plea of the workers is that all of them reported for duty on December 1, 1961, but they were not given any work by the management on the ground that there was aThis plea has been found to be true, by the Tribunal; but, according to the management, thein this case, during this period, is justified, under the provisions ofSection25E (iii) and hence the workmen are not entitled to compensation. According to the management, inasmuch as there was a strike in the factory section, work in the other sections could not be carried on; and, as the management were not sure whether the workmen would turn up for work,in the circumstances, was justified. We are not inclined to accept this contention advanced on behalf of the management. We have already referred to the finding of the Tribunal thatfactory workmen alone went on strike on November 30, 1961, and the entire body of workmen presented themselves for work on December 1, 1961, but they were declined work by the management on the ground ofThe plea of the management that they suffered loss, on account of the half a days strike on November 30, 1961, justifying thehas not been accepted by the Tribunal. In fact the Tribunal has accepted the plea of the workmen that the effect of the three hours token strike on November 30, 1961, would not have resulted in any loss to the management, if they had allowed the workmen to do work on December 1, 1961. The Tribunal has also held that theby the management, was as a retaliatory or vindictive measure against thefactory workers, who went on strike on November 30,We are in agreement with the findings, recorded by the Tribunal in this behalf and the award by the Tribunal of wages to the workmen for this period is justified.