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Judgment
K. Chandru
These three Writ Petitions challenge a common award passed by the Industrial Tribunal, Chennai in I.D. No. 30 of 2000, I.D. No. 27 of 2001 and I.D. No. 55 of 2001 dated17.3.2006. All the three disputes relate to the demand of the trade union, namely, Tamil Nadu Kudineer Vadikal Variya Oozhiyar Madhiya Amaippu to the maximum bonus at the rate of 20% in respect of the accounting years 1997-98, 1998-99 and 2000-2001, On the dispute raised by the trade union, the State Government issued G.O. (D) No. 86, Labour and Employment Department dated 8.2.2000 referring the dispute relating topayment of bonus at the rate of 20% for the accounting year1997-98 for adjudication by the Industrial Tribunal.
The Industrial Tribunal took up the dispute as I.D. No. 30 of 2000 and issued Notice to the parties. There after, for the successive year 1998-99, once again similar dispute was raised and that was referred for adjudication by G.O.(D) No. 243, Labour and Employment Department dated 31.3.2001. That dispute was taken on file as I.D. No. 27 of 2001. Similarly for the year 2000-2001, theTrade Union demanded interest plus ex-gratia payment at therate of 20% and that issue was referred for adjudication by G.O. (D) No. 1027, Labour and Employment Department dated 26.11.2002. The said dispute was taken on file I.D. No. 55 of 2002. The Tribunal consolidated all the three disputes andconducted a joint trial.
Before the Tribunal, on behalf of the trade union, S. Chandrasekaran was examined as W.W.1 and on their side, 26 document were filed and marked as Ex.W.1 to Ex.W.26. On theside of the Tamil Nadu Water Supply and Drainage Board (forshort ''TWAD Board''), one S.Paranthaman, who was the Office Superintendent was examined. On the side of the TWAD Board, 10 documents were filed and marked as Ex.M.1 to Ex.M.10.
A perusal of the impugned award clearly shows thatthe Tribunal is unfamiliar with the calculation of bonus asper the Payment of Bonus Act, 1965. The Tribunal whileawarding 20% bonus in respect of accounting years 1996-97and 1997-1998, in respect of the accounting years 1998-99and 2000-2001, it declined to grant any relief. Therefore,as against the Award in I.D. No. 30 of 2000, the TWAD Boardhas filed W.P.No.24934 OF 2007. That Writ Petition was admitted on 23.7.2007. Pending the Writ Petition, this Court granted an interim stay.
Aggrieved by the other two awards, namely I.D. No. 27of 2001 and 55 of 2002, the trade union has filed the twoWrit Petitions, namely W.P.Nos.7686 and 7687 of 2008. Thosetwo Writ Petitions were admitted on 28.3.2008. Subsequently, they were directed to be posted along with theearlier Writ Petition filed by the TWAD Board. Hence, allthe three Writ Petitions were grouped together and a commonorder is passed.
The contention of the TWAD Board was that in allthe three accounting years, the Board has paid minimum bonusat the rate of 8.33% as per the provisions of Payment ofBonus Act. But the Tribunal while ordering bonus in respectof the years 1996-1997 and 1997-98 failed to note that therewas no allocable surplus payment even in respect of the saidyears and they passed an erroneous award. The bonus paid tothe workmen was as per the directions and circulars issuedby the State Government. Therefore, the workmen were notentitled for any bonus other than what has been paidalready.
In the affidavit filed by the trade union inrespect of two industrial disputes, it was contended thatthe Tribunal erred in denying relief to them without goinginto the calculation in terms of the II Schedule to thePayment of Bonus Act and not made by the Balance Sheet andProfit and Loss Account produced before the Tribunal. Theworking sheet produced by the trade union fairly shows thatthere was availability of surplus as well as allocablesurplus and hence it was wrong on the part of the managementto deny the bonus.
As to whether the provisions of the Payment of Bonus Act are applicable to the TWAD Board is the question, whichis no longer res integra. The Supreme Court vide itsjudgment in Tamil Nadu Water Supply Drainage Board vs. TamilNadu Water Supply Engineers'' Association and others reported in 1998 Labour Law Notes 941 has held that the Act appliesto them and the Board cannot seek for exemption in terms of Section 32(5)(c) of the Payment of Bonus Act. On the other hand, when a dispute is raised in respect of the Payment ofBonus, the bonus will have to be applicable in terms of Section 15 of the Payment of Bonus Act, wherein thecalculation has to be made as set out in the Schedule.
Since the trade union has demanded maximum bonus, Section 11 of the Payment of Bonus Act provides the method under which it has to be calculated and Section 11 reads as follows:
Payment of maximum bonus: (1) Where inrespect of any accounting year referred to insection 10, the allocable surplus exceeds theamount of minimum bonus payable to the employeesunder that section, the employer shall, in lieu ofsuch minimum bonus, be bound to pay to everyemployee in respect of that accounting year bonuswhich shall be an amount in proportion to thesalary or wage earned by the employee during theaccounting year subject to a maximum of twenty percent, of such salary or wage.
(2) In computing the allocable surplus underthis section, the amount set on or the amount setoff under the provisions of section 15 shall betaken into account in accordance with theprovisions of that section.
u/s 25 of the Payment of Bonus Act, if any dispute is raised regarding the quantum of bonus u/s 22, the Act makes it very clear that if the accounts of such employer audited by any auditor duly qualified to act as auditor of company, then the accounts cannot be questioned before any forum and it is made clear that the said authority will not permit any trade union or employees to question the correctness of the said account.
In the present cases, a perusal of the impugned award does not show that the Tribunal kept in mind theparameters under which the bonus calculation has to be madeand the Tribunal has made the easy way by recording thatthere was a surplus of Rs.20,23,04,927/- in respect of balance brought forward from the balance sheet for the year 1997-1998. Therefore, in the financial year ending 31.3.1998, there was an excess of income over expenditure, which was transferred to the balance sheet, which is more than Rs.20 Crores. Hence, there was was a surplus incomeand it is available for distribution of bonus.
A perusal of the entire award clearly shows thatthe Tribunal did not keep in mind the procedure to calculate bonus as directed in Section 11 read with Section 15 of the Bonus Act. On the other hand, the Tribunal in paragraph 13 records that as per the document produced by the Trade Unionin Ex.W.3, it clearly proves that there was no surplus in come for the year 1996-1997 and hence they are notentitled for maximum bonus and the union demand was un justified in respect of the year 1996-1997. Having soobserved in paragraph 13, in paragraph 20 of the impugned award, the Tribunal held that the workers are entitled for 20% bonus for the year 1996-1997 in I.D. No. 30 OF 2000. But, in respect of I.D. No. 27 of 2001 and I.D. No. 55 of 2002, it held that there was no allocable surplus for grant of maximum pension. Thus, the Labour Court is erred that thefindings are contradictory and the calculation has not beenmade in terms of the Accounts produced by the TWAD Board.If there was no surplus income for the year 1996-1997, it is not clear as to how the Tribunal can record that thebalance brought forward from the previous balance sheet willcontain the surplus. This Court finds that the calculationof bonus requires certain amount of technical skill and alsoone must know the auditing procedure.
Under Rule 49 of the Industrial Disputes Rules,1959, the Tribunal has power to appoint an assessor in termsof Section 11 (5) of the Industrial Disputes Act read with Section 11-A(4) of the I.D.Act to get expert opinion on thequestion of calculation of bonus. Nothing prevented theTribunal from making such appointment even if the partieshave not made any such application. But, in the presentcase, the Tribunal without reference to the calculation procedure set out in the Payment of Bonus Act and withoutreference to the accounting year, granted relief to the workmen in respect of I.D. No. 30 of 2000 for the years 1996-1997 and 1997-98. This finding is not supported by the previous discussion in paragraphs 13 to 15 of the award.
Under the circumstances, this Court is obliged tointerfere with the award in I.D. No. 30 OF 2000. Though Mr. M. Muthupandian, learned counsel for the trade unionstates that allocable surplus was found for the year 1997-1998 and the relief should have been granted in respect ofI.D. No. 27 of 2001, nothing prevented the trade union from making an application before the Tribunal for making acorrection if it is only a mistake that has crept in. TheTribunal has power under Rule 55 of the Tamil Nadu Industrial Disputes Rules.
Likewise, the discussion in the award withreference to I.D. No. 27 of 2001 and I.D. No. 55 of 2002 iscasual and there is no discussion with reference to the calculation made in respect of the accounting years. In the light of the above, all the three Writ Petitions stand allowed and the common impugned award dated17.3.2006 stands set aside and the three Industrial Disputes are remitted back for fresh disposal by the Industrial Tribunal, Chennai. The Tribunal, if it is un familiar with the accounting procedure and the calculation to be made in respect of Payment of Bonus Act, more particularly u/s 11 read with Section 15 of the Act, it can also appoint an Assessor, if it so desires. No costs. The connected Miscellaneous Petition is closed.