(Oral).
1. Challenge in this writ petition is the award dated 16/03/2007 of the Industrial Tribunal at Dibrugarh, Assam in Reference No. 9/2005 by which while answering the following issues, the Tribunal has held that the management of Behubor Tea Estate (the writ petitioner) was not justified in not paying ex-gratia to 25 Nos. of employees pertaining to the year 2003-04 and that the said employees are entitled to ex-gratia payment in lieu of bonus @ Rs. 4500/-.
â(1) Whether the Management of Behubor Tea Estate is justified is not paying exgratia/bonus to 25 Nos. of Employees for the a/c year 2003-2004 ?
(2) If not what relief they are entitled toâ
2. When the Govt. of Assam vide its notification No. GLR.219/05/9 dated 23/09/2005 made a reference in respect of the dispute that was raised by the respondent No.1 on the above quoted issues, the Industrial Tribunal having registered the dispute as Reference Case No. 9/2005 issued notice to the parties requiring them to submit their written statements.
3. In the written statement filed by the petitioner-management, it was stated that the Tea Estate running by it was facing recession for the last several years leading to virtual closure of the Tea Estate. It was their plea that inspite of having heavy financial losses over the years, they extended helping hands to the workers and staff members who had crossed the eligibility criteria under the Payment of Bonus Act, 1965. In the year 2003-04, its financial position had completely collapsed and as such it was not possible for it to pay any ex-gratia to the concerned 25 employees who had also crossed the ceiling limit of Rs. 3500/- per month. According to the petitioner-management, they were not under any obligation to make the ex-gratia payment and that the earlier payments made was not liable to be set as a precedent.
4. In the written statement filed by the respondent No.1 it was their plea that since the ex-gratia in lieu of bonus was continued to be paid over the years, the same could not have been stopped in the year 2003-04 irrespective of crossing the ceiling limit. It was pleaded that such denial led to unfair labour practice.
5. During adjudication, the management examined 1(one) witness as MW-1 while the respondent Union examined 2 (two) witnesses as UW-1 and UW-2.
6. Identifying the main issue for adjudication as to whether the management of Behubor Tea Estate was justified in not paying ex-gratia/bonus to its 25 No. of employees for the account year 2003-04, the learned Presiding Officer of the Tribunal having held that the Management was not justified and directed payment of the same @ Rs. 4500/-, the management invoked the writ jurisdiction of this Court towards assailing the award by filing the instant writ petition. While entertaining the writ petition by order dated 29/08/2007, the operation of the impugned award was stayed.
7. I have heard Mr. N. Deka, learned counsel for the petitioner and have also heard Ms. A. Bhattacharyya, learned counsel representing the respondent Union. I have also considered the entire materials on record including the LCR received from the Tribunal.
8. Mr. Deka, learned counsel for the petitioner submits that the management being under not in any compulsion to pay the ex-gratia beyond the statutory obligation, the learned Presiding Officer of the Tribunal was not justified in answering the award in favour of the respondent Union and to direct the management to pay ex-gratia for the year in question. Referring to the provisions of the Payment of Bonus Act, 1965 and also the judgement of the Apex Court reported in 1992(1) SCC 500 (Coffee Board Employees Association, Vs. A.C. Shiva Gowda and others), he has submitted that on both the counts i.e. the precarious financial condition of the management and there being no statutory obligation to pay ex-gratia to the employees in question, the Tribunal could not have issued direction for payment of the same.
9. Countering the above argument, Ms. A. Bhattacharyya, learned counsel for the respondent Union submits that there being no perversity attached to the impugned award, this Court exercising writ jurisdiction will not sit on appeal over the findings recorded by the Tribunal. She also submits that the ex-gratia having been paid to the concerned employees over the years uninterruptedly, there could not have been sudden stoppage of the same for the year 2003-04. She has also placed reliance on the following decisions :-
1. (1983) 4 SCC 156 (Sadhu Ram Vs. Delhi Transport Corporation ;
2. AIR 1988 SC 2181 (Bharat Singh and others Vs. State of Haryana and others);
3. (1999) 2 SCC 143 (Savita Chemicals (P) Ltd. Vs. Deys and Chemical Workers Union and another);
4. (2008) 12 SCC 275 (General Manager, Oil and Natural Gas Commission, Silchar Vs. Oil and Natural Gas Commission Contractual Workers Union) ;
5. (1995) 6 SCC 749 (B.C. Chaturvedi Vs. Union of India and others); and
6. (2014) III LLJ 478 SC (Bhuvnesh Kumar Dwivedi Vs. Hindalco Industries Ltd).
10. All the aforesaid decisions are on the point of ambit, scope and jurisdiction of the High Court under Article 226/227 of the Constitution of India. It has been consistently held that whether reference of dispute is valid conferring jurisdiction on the Labour Court or Tribunal to adjudicate, findings on jurisdictional facts recorded by it are not open to interference. It has also been held that interference on a mere technical ground is not proper. It is only when the findings are patently erroneous and de-hors the factual and legal position in record, interference would be proper and justified.
11. There is no quarrel with the aforesaid proposition of law laid down by the Apex Court in the matter on judicial review of award of Industrial Tribunal and / or Labour Court exercising jurisdiction under Article 226/227 of the Constitution of India. The point which arises for determination in this proceeding is as to whether the findings arrived at by the Tribunal is dehors the factual and legal position and /or findings recorded are perverse. The learned Tribunal while answering the issues referred to it for adjudication and resolution, has placed reliance on two decisions, (1) AIR 1959 SC 1147 (Ispahani Employees Union Vs. M/s. Ispahani Ltd) and (2) reported in 2012 LAB I.C. 1062 (Cipla Employees Union Vs. Cipla Ltd, and others). It will be pertinent to mention here that the decision in Ispahani Ltd. (Supra) was rendered prior to coming into force the Payment of Bonus Act, 1965. That was a case relating to Puja Bonus. As recorded in the said judgment, puja is a special festival in Bengal and it has become the usual practice with many firms there to give bonus before Puja to their workmen. Answering the issue as to whether there was an implied term of employment for payment of Puja Bonus @ one months wages for every year, the Apex Court laid down the following tests :-
i) The payment must be unbroken;
ii) It must be for a sufficiently long period ;
iii) The circumstances in which payment was made should be as such to exclude that it was paid out of bounty.
12. In the aforesaid case, number of matters came to be adjudicated upon, one of which was â whether the workmen were entitled to Puja bonus for 1953. Laying down the aforesaid test, the apex Court when found that the appellant Union members had been paid the bonus continuously since its birth, agreeing with the findings of the appellate tribunal that the circumstances justified the inference of an implied term of employment for payment of Puja bonus at the rate of one months wages every year, dismissed the appeal filed by the employer company.
13. In Cipla Employees Union (Supra), the Bombay High Court referring to the negotiated settlement for ex-gratia payment only for the relevant year and not to cite as precedent in subsequent years held that the denial of payment for the year in question was not improper. Dealing with the question of denial of payment of ex-gratia bonus on the basis of customary practice and as to whether such payment had become matter of customary bonus or in alternative a condition of service, the matter was remanded back to the Industrial Tribunal for re-consideration.
14 On perusal of the above two decisions, what is important to note is that the decision in Ispahani Ltd. (Supra) was prior to the coming into force the Payment of Bonus Act, 1965 and was confined to Puja bonus. Applying the three tests for inferring an implied agreement and also noticing the fact that the same was paid to the members of the Union continuously since its birth, the Apex Court upheld the decision of the Appellate Tribunal. In Cipla Employees Union (Supra) it was held that denial of payment for the year in question was not improper, inasmuch as, there was an agreement to confine the payment only to the relevant year.
15. In the instant case, the learned counsel for the petitioner has referred to the settlement that was arrived at by and between the parties in the conciliation proceeding held on 19/07/2004, a copy of which was also enclosed to the written statement filed by the respondent Union. As per the said negotiated settlement, the management had agreed to pay ex-gratia equal to 15% of earnings of 2002-03. The said settlement was confined only to the year 2002-03 and not beyond. Thus, it cannot be said that there was any negotiated settlement to pay ex-gratia to the employees in question in future also irrespective of the statutory limit imposed by the provisions of the Payment of Bonus Act, 1965. As the award itself would reveal, the ex-gratia was paid for the years from 1998-99 to 2002-03. It was the consistent plea of the management that because of precarious financial condition it was not in a position to pay the ex-gratia. When the same was refused to be paid for the year 2002-03, the aforesaid negotiated settlement was arrived at only for the said year. Thus, it is not a case of drawing an inference of an implied term of employment for payment of ex-gratia like that of Puja bonus which was paid to the workmen in Ispahani Ltd. (supra).
16. As per Blacks Law Dictionary, meaning of the term ex-gratia is out of grace; a matter of grace ; favour of indulgence ; gratuitous. Ex-gratia payment means payment by one who recognizes no legal obligation ; the payment without legal consideration. It means a payment not legally required. In Coffee Board Employees Association (Supra), the Apex Court held that ex-gratia payment is in the nature of incentive payment which is in the discretion of the management to make. While holding that the decision to make payment is to be left entirely to the discretion of the management, the Apex Court observed thus :-
ââ¦â¦â¦â¦â¦â¦..All legitimate payment made to the staff would constitute the cost of labour engaged in the said activities. An ex-gratia payment to the staff is well recognized legitimate mode of incentive payment. Incentives are necessary for securing from the workmen cooperation and efficient work. In the absence of efficiency, the cost of the work undertaken is bound to increase. In the long term such payment helps to keep down the costs and acts in the interests of the industry. The decision to make the payment has, therefore, to be left entirely to the discretion of the management.â
17. As per the definition of the term âemployee defined under Section 2(13) of the Payment of Bonus Act, 1965 (as was applicable at the relevant time) â âemployeeâ means any person (other than an apprentice) employed on a salary or wage not exceeding (three thousand five hundred rupees) per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied.
18. If we go by the said definition of the term âemployee, admittedly the employees in question are not entitled to receive the ex-gratia. It is in this context, Mr. N. Deka, learned counsel for the petitioner has submitted that the management cannot be forced to do any particular act beyond the statutory obligation and / or limitation. The tribunal while answering this issue has only referred to para 2 of the written statement filed by the management, which reads â âthat the management Tea Estate is suffering very heavy financial losses from year to year yet in order to extend helping hands to the workers and staff they were paid minimum bonus and exgratia, even to the staffs who have crossed the eligibility criteria under the Payment of Bonus Act, so as to come to the conclusion that the said statement would itself show that the management had paid bonus and ex-gratia to the employees who had crossed the eligibility limit of salary even in the years of loss. Apart from the fact that such payment did not form any long drawn practice, the same also did not constitute the situation in which an inference could be drawn of an implied term of employment for payment of ex-gratia.
19. As noted above, such payment had been made only in recent past and to be precise from 1998-99. Even in the year 2002-03, there was one time settlement. If the employees had exceeded the limitation prescribed in the Payment of Bonus disentitling them to ex-gratia, in my considered opinion there could not have been any direction in the given facts and circumstances to pay the same to the said employees. The foundation for such a claim for continuity of payment of ex-gratia is missing in the instant case.
20. All the above aspects of the matter having not been discussed and dealt with by the Tribunal towards answering the issues in favour of the respondent Union, I am of the considered opinion that the same is liable to be interfered with which I accordingly do. The impugned order dated 16/03/2007 passed by the learned Presiding Officer, Industrial Tribunal, Dibrugarh in reference case No. 9/2005 stands set aside and quashed.
21. Writ petition is allowed, without however, any order as to costs.