Case: Poona Electric Supply Company Limited, Poona Vs. S Industrial Tribunal (S. Taki Bilgrami)

The petitioner is the Poona Electric Supply Company, Ltd. , and respondents 2 and 3 are the trade unions representing the workmen employed by the petitioner. On 24 August 1962, respondent 2 gave a strike notice calling upon the petitioner to concede some of their demands which included a demand for bonus. They claimed that every worker should be paid bonus equal to 50 per cent of his total earnings during the yearAs the petitioner is a public utility service, the matter came before the conciliation officer who, after holding conciliation meetings brought the parties to an agreement. A settlement was arrived at and the demand for bonus made on behalf of the workers was as followsworker should be paid bonus for the year ending 31 March, 1962 equal to 50 per cent of his total earnings (pay inclusive of allowances) In the year 1962. "( 2 ) ACCORDINGLY, the Deputy Commissioner for Labour (Administration), who has been duly authorized in this behalf by the State Government referred the dispute to respondent 1 (industrial tribunal) under S. 10 (2) of the Industrial Disputes Act, 1947. When the parties were called upon to file their statements of claim, respondent 2 union, on 14 November 1962, informed the industrial tribunal as followss. Thefinancial position of the company is quite sound and as such it can afford to bear the burden on account of grant of bonus to be extent demanded. The demand does not need further clarifications. "( 3 ) THE petitioner filed its written statement on 17 October 1962, and with regard to demand 6, it stated that it was not ready with its profit and loss account and the balance sheet for the yearand that it should be permitted to submit the statement in due course. On 14 January 1963 the petitioner filed a statement with regard to the calculation of bonus and pointed out that there was no surplus available. After this the case was adjourned for hearing. On 6 February 1963 respondent 2 union made an application for an award of interim bonus for three months, alleging that there was an unbroken and continuous practice and custom of paying three months bonus for every year since 1950 and that payment of three months bonus was a term of the service of contract of all the workmen. An amendment in the statement of claim was made accordingly. This was opposed by the petitioner. The petitioner company contended that the demand for bonus made by the union was on the surplus profit basis and not on any customary basis and since an agreed reference had been made for bonus calculated on the basis of the Full bench formula, the case now made out by the amendment was a new case and therefore, the tribunal had no jurisdiction to entertain it. This contention has been rejected by the tribunal by its order dated 27 June 1963. The tribunal held that themerely wanted to add another ground for claiming bonus and since the nature of the claim was not changed and the terms of the joint consent reference had not been affected, there was no justification for rejecting the amendment. It is from this order that the petitioner has come to this4 ) AT the outset, it must be stated that the petitioner came to this Court from an interim order passed by the tribunal. Ordinarily we would not have been disposed to interfere in this matter at this stage, but since lengthy arguments have been addressed to us, we think it is necessary to deal with them. The demand for bonus for the yearis still under investigation and it is always in the interest of the parties that a dispute of this should be settled as early as possible.

Court's reasoning:
( 14 ) AT one stage there was some confusion about the "customary" bonus. That term was promiscuously used for what is now really customary bonus paid in connexion with a festival as also for what is paid as an implied term of contract of service. The difference between the two forms of bonus has been brought out in Grahams Trading Company v. Their workmen [1959II l. L. J. 393] (vide supra ). One of the four circumstances which went to show whether a bonus was a customary bonus or not was to see whether the payment has been made at a uniform rate throughout. In the case of bonus paid as a term of implied contract, the bonus is not uniform; it can be variable [see also Ispahani, Ltd. v. Ispahani Employees Union (1959II L. L. J. 4) (vide supra)]. Therefore, when a claim for bonus is made on the basis that it was an implied term of contract, it was always open for theto contend that though till now they were paid bonus equivalent to three months wages, they were entitled to be paid a higher bonus in view of the increased financial prosperity of the company. Sri Ramaswami wants to construe the demand as a demand based entirely on the Full Bench formula. We do not think that there is any justification for such a restricted construction upon the demand actually made and referred to above. Sri Ramaswami referred to a decision of the Supreme Court in Bridge and Roof Company (India), Ltd. v. Union of India [1962II L. L. J. 490] for supporting his contention that as soon as you demand bonus for a particular year, it must reference to the individual year, it must necessarily imply the application of the Full Bench formula. We do not think there is anything in this report to justify this conclusion. That case deals with the word "bonus" found in the definition of the expression basic wages" in S. 2 (b) (ii) of the Employees Provident Fund Act, 1952. We cannot read this decision as an authority for the proposition that when a demand is made by a party for bonus being paid for any given year, that is equivalent to demanding it on the basis of the Full Bench formula. In these circumstances, therefore, when on 6 February 1963 the respondents made a claim for an interim award of bonus for three months as a term of service contract, that cannot be regarded as in any way inconsistent with the demand made in the reference itself. The demand in the reference is reference as much to the full Bench formula as to the term of service contract. In the application dated 6 February 1963 respondent 2 union stated as follows(2) That payment of three months bonus is a term of service contract of all the workmen. (3) That there is an implied contract of service that the workers are entitled to payment of three months bonus per year. (4) It is therefore prayed that three moths bonus should be awarded as interim bonus immediately. "( 15 ) WHAT follows is important,(5) The union reserves its right to submit the bonus calculations and the justification of the same at a later date. "( 16 ) IN other words, the demand made in the reference is referable both to the terms of contract and the Full Bench formula. Since the company had paid bonus for a number of years prior tothe respondent unions, apparently, made an application for the award of an interim bonus at least at that rate pending the adjudication with regard to the demand already made. In our view, the tribunal was perfectly justified in considering that though the claim for bonus was one, it was claimed on two different grounds, and it was open to the tribunal to consider both the grounds without feeling it necessary to exclude one by the other. In our opinion, there is no good reason for interfering with the order passed by the tribunal.