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Showing contexts for: maximum bonus in Himalaya Drug Co. Makali vs Ii Additional Labour Court, Bangalore on 3 January, 1986Matching Fragments
6. A literal interpretation of S. 9 would definitely support the case of the petitioner and that was the view taken by the learned Judge of the Madras High Court. But, in my view, a mere examination of these three provisions to which I have adverted would not provide a proper clue to the interpretation of S.9. It is well-settled that while interpreting the provisions of a beneficial piece of legislation, the entire scheme and object of the Act should be taken into consideration, that is to say, a schematic interpretation of the Act would be a better guide for interpreting the beneficial provisions of the Acts like the Payment of Bonus Act or the Industrial Disputes Act or for that matter any other Act pertaining to social legislation. It is an undeniable fact that the concept of bonus has undergone considerable change. Now it has become a statutory right and no more a bounty of the management for the good work turned out by the workmen during an accounting year. The workmen can claim minimum bonus as a matter of right irrespective of the fact that the management makes profits or not and they can claim the maximum bonus of 20 per cent., if they make out a case in terms of Schedules I, II and III of the Act. When such is the right conferred on the workmen for minimum and maximum bonus, can that right be taken away all because the workmen happen to commit some grave misconduct during a particular accounting year which had resulted in their dismissal ? It is understandable that bonus due in a particular accounting year could be withheld if the workman is dismissed from service for the misconduct proved against him during that accounting year. But S.9 does not say so. Therefore, this Court has to gather the intention of Parliament from the words of the statute. If the scheme of the Act of Payment of bonus is taken into consideration, it is not possible to accept the contention of the petitioner that the workman will forfeit the amount of bonus due including the amounts which became due to him during the year or years preceding the accounting year in question. The scheme of the Act for payment of bonus could be discerned by properly appreciating the words 'accounting year' which are found in the various provisions of the Act. S. 2(1) defines 'accounting year' thus :
"The available surplus in respect of any accounting year shall be the gross profits for that year after deducting therefrom the sums referred to in S. 6. .............. ".
I have already referred to Ss. 8 and 9 of the Act. S. 10 of the Act which prescribes the payment of minimum bonus is also with reference to the accounting year, S. 11 of the Act which deals with the payment of maximum bonus is also with reference to the accounting year. Likewise, computation of the number of working days which would entitle the workmen to claim bonus is also with reference to the accounting year. The set-off and set-on provisions relating to allocable surplus are also with reference to the accounting year. Likewise, the provisions regarding infancy protection under S. 16 are also with reference to the fifth to eighth accounting years. S. 17 of the Act requires to be noticed in detail in order to ascertain the scheme and object of the Act. It reads as under :
It should be noticed that the settlement contemplated in S. 31A for bonus linked with production or productivity does not say that it should be a settlement in a particular accounting year. What all it provides for is payment of annual bonus linked with production and productivity. I have referred to the omission of the words "accounting year" in S. 31A in order to bring out the fallacy of the argument of the learned counsel for the petitioner that the omission of the words "accounting year" in S. 9 would make all the difference for its correct interpretation. The opening words of S. 31A make it clear that notwithstanding anything contained in the Act, it is open to the parties to have a settlement for payment of bonus linked with production and productivity. That means to say that notwithstanding the provisions for profit sharing bonus under the Act and the other provisions which empower the workmen to claim minimum and maximum bonus and also the provisions disqualifying the workmen from claiming bonus under the Act or proportionate payment of bonus (see section 8), the management and the workmen could enter into a settlement for bonus linked with production and productivity in lieu of profit sharing bonus. The second proviso to S. 31A makes it clear that annual bonus linked with production and productivity should not exceed 20 per cent. of the salary or wage earned during the relevant accounting year. This bonus is payable to the workmen even if they incur the disqualification under S. 9 or entitled to proportionate bonus under S. 8.
13. However, it was contended by the learned counsel for the petitioner that the provisions of S. 31A would not be a proper guidance for the interpretation of S. 9 of the Act. According to him, the non-obstante clause in S. 9 overrides the non-obstante clause in S. 31A of the Act and, therefore, in the absence of the words "accounting year", in S. 9, the intention of the Legislature is very clear, that is, to confer a right on the employer to forfeit the entire amount of bonus due to the workman irrespective of the fact that the order of dismissal was passed against him in the relevant accounting year or not. In my view, if full effect has to be given to the non-obstante clause in S. 9 of the Act, there is no good reason for not giving the same effect to the non-obstante clause in S. 31A of the Act. The two non obstante clauses in S. 9 and 31A of the Act will have to be interpreted with reference to the object and purpose of the Act under consideration since these two non-obstante clause operate in the same field overriding anything contained in the Act. The object and purpose of the Act is to confer a statutory right on the employees for minimum and maximum bonus under the Act and, therefore, the non-obstante clause in S. 9 should not be given full effect so as to override the non-obstante clause in S. 31A of the Act which will result in an interpretation that is contrary to the object and purpose of the Act. As observed by the Supreme Court in Sarwan Singh v. Kasturi Lal, , in a slightly different context, statutory interpretation has no conventional protocol and cases of conflict had to be decided with reference to the object and purpose of the laws under consideration. The interpretation put by me on S. 9 of the Act does not in any way offend the scheme, purpose or object of the Act. No anomaly or injustice would result from putting that construction, as rightly contended by the learned counsel for the workmen. If full effect is given to the non-obstante clause in S. 31A of the Act, it will not lead to any anomalous results as contended by the management. The object of S. 31A is to enable the parties to enter into a collective bargaining settlement. It is not an individual agreement or settlement as contemplated in the Law of Contracts but as contemplated under S. 12(3) or 18(1) of the Industrial Disputes Act. If the object of collective bargaining is kept in view, the fact that an individual workman commits misconduct or a small group of men commit misconduct in an accounting year is not relevant or of no consequence to their claim of bonus linked with production or productivity under a settlement between the parties for payment of annual bonus. If that is understood, there won't be any difficulty in construing S. 9 of the Act harmoniously with the other provisions of the Act. Additionally, S. 31A was inserted by Act 23 of 1976 with effect from 25th September, 1975 and, therefore, the Legislature must be deemed to have in view the non-obstante clause in S. 9. If that be so, the later non-obstante clause overrides the earlier clause in S. 9. Thus construed, it is clear that the right of the management to forfeit bonus on the ground that the workman was dismissed from service for misconduct, more particularly mentioned in S. 9 of the Act, would be only with reference to the accounting year in which the said act of misconduct was committed and not with reference to any year or years preceding or succeeding the accounting year in question.