Haryana State vs Presiding Officer, Labour Court and Others

T.H.B. Chalapathi, J.—This writ petition is filed challenging the award of the Industrial Tribunal-cum-Labour Court Hissar, dated April 6, 1993.

The State of Haryana filed this writ petition. The Respondents 2 to 11 are working as daily wage employees under the Haryana Roadways which is a part of the Transport Department of the State Government. For the employees of the Transport Department, the State Government formulated a scheme and the Governor of the State accorded sanction to the payment of ex-gratia in lieu of bonus at 20 percent (as a special case) on the emoluments to certain categories of employees of the Transport Department, Haryana for the year 1989-90. The ex-gratia payment under the said order was made applicable to the employees working on daily wages who have completed 3 years of service and those employees who have not completed three years of service filed applications before the Labour Court, Hissar, u/s 33-C(2) of the Industrial Disputes Act, 1947, all the daily wages employees are entitled to ex-gratia if they worked in an establishment for not less than 30 working days in a year. According to the respondents since they have worked for not less than 30 working days in the year, they are entitled to the payment of ex-gratia as announced by the State of Haryana in its memo No. 12/14/81-ST, dated May 31, 1990. The State of Haryana took a plea before the Labour Court that the daily wage employees, who have not completed 3 years of service, are not entitled to ex-gratia payment under the terms of the instructions dated May 31, 1990. As the respondents have not completed 3 years of service, they are not entitled to claim the ex-gratia payment in lieu of bonus.

It was contended before the Labour Court that the Bonus Act is not applicable. The Labour Court came to the conclusion that the Bonus Act is applicable and in view of the provisions contained in Section 8 of the Bonus Act, once the employees completed actual 30 working days during the year, they are entitled to bonus. It was further held by the Labour Court that simply because the payment being made is an ex-gratia in lieu of bonus, it does not take away from the purview of the Bonus Act. Accordingly, the Labour Court allowed the application and directed the management of the Haryana Roadways to pay ex-gratia with interest @Rs. 12 per cent P.A.

Aggrieved by the said award, the State of Haryana filed this writ petition. The sole contention raised by the learned counsel for the petitioner is that the Payment of Bonus Act is not applicable to the employees of the State Government or the employees of any establishment employed by or under the authority of any department or a local authority. Learned counsel for the petitioner relied upon Section 32 of the Payment of Bonus Act, 1965 the relevant portion of which reads as under:

"Section 32--Nothing in this Act shall apply to--

(i) xx xx xx xx xx

(ii) xx xx xx xx xx

(iii) xx xx xx xx xx

(iv) employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority.

XX XX XX XX XX

Thus as the Industry is directly run by the Government or by the Governmental Department, the provisions of Payment of Bonus Act are not applicable to such establishments. It has been held in The Director of Industrial and Commerce Vs. K. Vellaichami and Others, as follows at p 451 :

"Thus, an establishment in public sector is an establishment owned by a Government company in which the Government or the Reserve Bank have substantial proportion of shares. This would be put in contradiction to an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority. In the latter case the industry is run directly by the Government and in such a case the Act does not apply. In the former case, the industry is run by a Company or Corporation owned by the Government or in which the Government or the Reserve Bank of India hold not less than 40% of the shares. This distinction the Labour Court failed to keep in mind and thus misdirected itself and this has been responsible for the wrong award. The error is apparent on the face of the record."

In the instant case there is no dispute that the Haryana Roadways is run by the Transport Department of the Government. Haryana Roadways is not constituted either under the Road Transport Corporation Act, 1950 or under any State Legislature. It is not a statutory Corporation. It is run by the Department of the Government. There cannot be any dispute that the Haryana Roadways is an industry: Therefore, the employees employed by an establishment engaged in any industry carried on by or under the authority of the State Government are excluded from the operation of the provisions of Payment of Bonus Act, 1965 by virtue of Section 32(iv) of the said Act. The same view was taken by the Bombay High Court in D.P. Kelkar Amalner v. Ambadas Keshav Bajaj and Ors. AIR 1971 Bomb 124.

Therefore, I am of the opinion that the Haryana Roadways will not come within the provisions of Payment of Bonus Act. Therefore, the employees of the Haryana Roadways which is purely an establishment of the State Government working under the control of the Transport Department are not entitled to get any bonus or ex-gratia by virtue of the provisions of the Payment of Bonus Act, 1965. If any employee is granted bonus, it is only by virtue of the specific order of the State Government either by granting the bonus or ex-gratia and in this case the order granting ex-gratia was made on May 31, 1990 by the State Government. The Governor accorded sanction to make ex-gratia payment in lieu of bonus for the employees working in the Transport Department.

The learned counsel for the employees contended that there is a discrimination between the employees who have completed 3 years of service as daily waged workers and those who have not completed 3 years of service and according to him this amounts to discrimination. But I am not able to appreciate this contention. It is open to the State Government to specify the employees who have put in 3 years of service and the employees who have put in less than 3 years of service. To make the employees eligible for ex-gratia, the Government took a policy decision to have 3 years of service as a condition precedent. Therefore, it does not amount to discrimination.

In view of my foregoing discussion, I am of the view that the Payment of Bonus Act is not applicable to the employees of the Haryana Roadways and thus it is always open to the State Government to stipulate the condition under which any employee of the Transport Department including the employees of the Haryana Roadways is to get ex-gratia payment in accordance with the policy of the Government. Therefore, I am of the opinion that the writ petition deserves to be allowed.

The writ petition is accordingly allowed. The order of the Labour Court dated April 6, 1993 is set aside. As the Respondents 2 to 11 did not complete 3 years of service by May 31, 1990, they are not entitled to ex-gratia payment. There will be no order as to costs.