NEW INDIA INDUSTRIES EMPLOYEES ASSN BOMBAY Vs. NEW INDIA INDUSTRIES LIMITED BOMBAY

JUDGEMENT

(1.) This is a complaint filed by the New India, Industries Employees' Association, Bombay, against the New India Industries Ltd. (hereinafter referred to as the company) under S. 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as the Act.) The grievance in the complaint is that the agreement in the form of despatch of material bonus scheme dated 18-1-1967, as subsequently modified, is not implemented by the company. In the complaint it is stated that the company put up notice dated 6-11-1975 stating that in view of the New Bonus Ordinance dated 25-9-1975 the company discontinues the above - mentioned bonus scheme, as according to the company it is not open to it to pay bonus as per despatch of material bonus scheme (hereinafter referred to as the scheme). The complainant alleges that the scheme is not covered by the said ordinance, hence the company is not justified in discontinuing the said scheme.

(2.) By its written statement the company contends that it has been paying 20% annual bonus to its employees as per the provisions of the Bonus Act. As under the Ordinance mentioned above, payment of bonus above 20% is forbidden, hence the company is justified in putting up the notice dated 6-11-1975, and discontinuing the said scheme.

(3.) On behalf of the complainant Dr. Kulkarni contends that if the provisions of the said scheme are properly considered, it would be obvious that although it is called a bonus scheme, it is really an incentive wage scheme, not depending on earning of profits by the company, hence the ordinance would not apply. As against this contention, Mr. Gagrat for the company submits that the scheme provided bonus as the production goes on increasing, the scheme is related to productivity, and consequently on profits also, hence in view of the abovementioned ordinance and the subsequent amendment to the Payment of Bonus Act, (hereinafter referred to as the Bonus Act), it would not be open for the company to pay bonus more than 20%. It is further urged that if the amended Bonus Act and the earlier ordinance forbid the payment of bonus above 20% the Income-tax Authorities would not allow the expenditure in that respect, if it is more than 20%.