GUMAN MAL LODHA. J - (1.) AN important question of law has been raised in this appeal by the learned counsel Mr. Gupta for the E. S. I. The question is whether L. I. C. premium subsidee given to workmen by the management is to be included for the purpose of computation of wages in respect of the contribution to the Employees State Insurance fund.
(2.) THE Tribunal has come to the conclusion that it is not wages and therefore no contribution is required to be paid by the employer of the employee. In this appeal it has been argued that this is an additional remuneration within the meaning of section-2 sub-section (22) of the E. S. f. Act and this amount is wages. Reliance is placed on the judgment of the Hon'ble Supreme Court 1984 Lab. I. C. 1570. Mr. Sharma learned counsel for the management of Shri Ram Chemicals on the contrary seriously contests the correctness of the submission of Mr. Gupta. According to him this is a unilateral payment depending upon the discretion of the management and may be paid; or may not be paid; with express understanding that it would not be treated as wages for the purposes of contribution to the E. S. I. or any other. Mr. Sharma pointed out that the judgment of Hon'ble Supreme Court in Braitwait Case (1968 S. C. 416) still holds the field and that being so it covers the entire definition of wages including the part in which additional remuneration has been mentioned. According to Mr. Sharma once the payment is discretionary and unilateral, it cannot form the part of wages more so because it would never go in the hands of the employees or the workman, and the workman is also required to make payment of his part of contribution which he would never be able to do because it would never go in his hand. I have given a very serious and thoughtful consideration to the rival contentions of the learned counsel for the parties and issues involved in it.
(3.) SECTION 2 sub-section (22) defines wages and reads as under : "wages means all remuneration paid or payable in cash to an employee in terms of contract of employment express or implied, were fulfilled and includes (any payment to an employee in respect of any period of authorised leave, lock out, strike which is not illegal lay off hands) other additional remuneration if any paid at interregnum not exceeding two months not includes. Mr. Gupta's emphasis is on additional remuneration. Mr. Gupta's submission is that by the latest judgment of the Hon'ble Supreme Court it has been clarified that the earlier judgment would not apply to this clause of additional remuneration and the earlier judgment was only meant for the definition of wages in the first part and not in the third part Mr. Gupta's argument is that it is immaterial whether the wages or any amount in the form of wages goes in the hands of the employees workman or not because it may be paid or may be payable. Now the earlier judgment of the Hon'ble Supreme Court in what is popularly known as Braitwait's case may be first notices. In AIR 1968 S. C. 413, the Hon'ble Judges of the Supreme Court were required to consider whether Inam scheme is wages. It was not amongst the original terms of the contract of the employment of the employees of the company. In those terms there was no offer of any reward or prize to be paid for any work done by the employee. The only offer under scheme was to make incentive payments to certain specified conditions were to be fulfilled by the employees and the company reserved the right to withdraw the scheme altogether without assigning any reason or to revise its conditions at its sole discretion. The payment of Inam was dependent upon the employees exceeding the target of output appropriately applicable to them. But though primarily the right to receive the Inam dependent on the efficient working of the employee, there was another clause which laid down that if the targets were not fulfilled due to lack of order, lack of material, break down of machinery, lack of labour strike, lock out. go slow or any other reason whatsoever no inam was to be awarded. The company also laid down that if any deterioration of workmanship was noticed on the part of the employees in order to achieve the target prescribed for achieving the Inams the schemes could be abandoned forthwith. It was also made clear that the payment of reward was no where connected with part of wages. Their Lordships held that the payment of Inam though remuneration could not be said to have become a term of contract of employment within the meaning of definition of wages given in sub-section (22) of section 2. It appears that in that case the High Court relied upon legal fiction by extending section 14 explanation to the definition of wages for the purpose of considering the nature of Inam under the scheme. The Hon'ble Judges of the Supreme Court took exception to it and observed that the explanation to section 41 is not to be utilised for interpretation of general definition of wages given in sub-section (22) of section 2 of the Act and is to be taken into account only when the word wages requires interpretation of section 41 of the Act. The emphasis in that case was on part of contract of employment. " The Hon'ble Supreme Court considered it from the point of offer and acceptance by the employees as a condition of service. It was held it was never in implied terms of the contract or employment of the employees of the appellant. In the later case AIR 1984 S. C. 160 M/s. Harihar Polyfibre Vs. Regional Director E. S. T. Corporation, wages were again considered for the purposes of House rent allowance, chief guest and incentive allowances etc. ;