The Excise Department gave an advertisement in the newspaper for certain vacancies of subordinate staff under the signature of Bhuwan. In the advertisement it was clearly mentioned that such staff will be paid the daily

CS Professional · Labour Laws and Practice · PYQS · December 2024
The Excise Department gave an advertisement in the newspaper for certain vacancies of subordinate staff under the signature of Bhuwan. In the advertisement it was clearly mentioned that such staff will be paid the daily wages only. After some time, the newly recruited subordinate staff in Excise Deptt. started demanding for the equal salary as are being paid to other employees of the same class and when their demand was not accepted by the management, they collectively filed a suit against the department. In the court, the management argued that the new employees accepted the employment with full knowledge that they will be paid on daily wages only and nothing else, hence the department is not liable to accept their demand. Based on the given facts, answer the following questions: Ramesh was working as a conductor with a State Transportation Corporation from 1st January 2013. On 21st October 2020, finding him guilty of fraud and misappropriation, he was dismissed from the services of the Corporation. Aggrieved by the order of dismissal, Ramesh raised a dispute and on failure of conciliation the same was referred for adjudication. During the pendency of the above case, by virtue of a settlement under Section 18(1) of the Industrial Disputes Act, Ramesh was appointed as a fresh entrant by a settlement dated March 6, 2023 and accordingly, he reported for duty with effect from March 16, 2023. As per clause 3 of the settlement, it was agreed by Ramesh that he will not claim any benefit or approved privileges, for the period of his service before dismissal, i.e. for the period from January 01, 2013 to October 21, 2020. The Corporation announced bonus for the year 2019-20 and 2020-21 after his termination. Since the bonus announced pertained to year during which Ramesh was under employment, he claimed bonus for the period from Corporation. Based on relevant case law and statutory provisions under The Payment of Bonus Act, 1965, decide the validity of his claim.

Answer & Explanation:

Section 8 of the Payment of Bonus Act, 1965 provides that every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year. Further, Section 9 of the Act deals with the disqualification for bonus and it states that an employee shall be disqualified from receiving bonus if he is dismissed from service for- fraud; riotous or violent behaviour while on the premises of the establishment; or theft, misappropriation, or sabotage of any property of the establishment. It is to be noticed that the Payment of Bonus Act, 1965 is a complete and exhaustive Code on the payment of bonus to the employees and the Act gives a right to the employees to receive bonus in accordance with the provisions of the Act. The Act does not permit an employer to withhold payment of a bonus during the pendency of a disciplinary inquiry. It is, therefore, obvious that if an enquiry is pending for a long period, bonus cannot be withheld on that account. In the case of Wheel & Rim Company of India Ltd. v. Government of Tamil Nadu, Hon'ble High Court was not inclined to accept the argument that Section 9 is restricted only to the receiving of bonus by the disqualified employee payable for the accounting year in which the order of dismissal is passed. On a consideration of all the circumstances, and the High Court observed that this disqualification is applicable to whatever bonus was payable under the Act. In the present case, in as much as the dismissal took place, the employer was entitled to disqualify the employee for the bonus for the accounting year 2019-20 as well as for the accounting year 2020-21. Moreover, the employee had entered into a settlement under section 18(1) of the Industrial Dispute Act, 1947 by which he gave up his claim prior to his dismissal. Even though the settlement was not marked before the Labour Court, the employee is bound by the said settlement and, therefore, cannot at all claim any benefit for the period prior to this dismissal. In accordance with the above, Ramesh may not be entitled to the Bonus.

Topics: Wages and Benefits

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