DECCAN CHRONICLE Vs. EMPLOYEES STATE INSURANCE CORPORATION

JUDGEMENT

(1.) This is an appeal preferred by the Management of the Deccan Chronicle against judgment of the Employees Insurance Court, made in E.I. Case No. 47 of 1976 dated 14/03/1977, holding that the quarterly payments made to certain categories of employees of the Deccan Chronicle under a settlement entered into between the management and the workmen under S. 12(3) of the , on 31/03/1973, as subsequently revised on 28/04/1976 constitute as and account for wages within the meaning of S. 2(22) of the Employees State Insurance Act, 1948.

(2.) It appears that the management of the Deccan Chronicle and their employees had originally entered into an agreement on 3/09/1970, whereunder it is provided, that the employees of the Deccan Chronicle working in the departments of job, news, lino and rotary sections, etc., should he paid a special allowance once in every quarter for the extra work done over and beyond norms in connection with the extra pages on certain terms and conditions. This agreement was entered into under S. 18(1) of the Industrial Disputes Act, and covered only the non-editorial staff of the newspaper. Some of the terms and conditions, which are mentioned in the agreement are to the effect that the payment is to be made once in every quarter and that it should not form part of either of the basic or the Dearness Allowance or pay of the recipient, and that it is purely a Special Allowance for efficient work beyond the norms. It is particularly stated that this agreement is purely temporary. Subsequently, on 31st March, 1973, the ma management have entered into a similar agreement with the Sub-editors, Reporters, Chief Sub-editors, Chief Reporters and News Editors of the Deccan Chronicle. This agreement is one which has been entered into under S. 12(3) of the Industrial Disputes Act, 1947. The terms and conditions of this agreement are more or less the same as those to be found in the agreement above referred to and entered into between the management and the employees, on 3/09/1970. This agreement is also temporary and it is also agreed between the parties that that payment should not form part of either the basis or the Dearness Allowance or pay of the recipients of the quarterly special allowance for efficient work beyond the norms. It is mentioned that only permanent employees employed in the Editorial Department shall be eligible for the special allowance payable under that agreement. This agreement dated 31/03/1973 has been revised on 28/04/1976 by means of a fresh agreement entered into between the management and the employees, under S. 18(1) of the Industrial Disputes Act, 1947. We need not only one extra feature of this agreement dated 28/04/1976. In clause (2) of the agreement it is, stated that the payment should not form part of either the basic or the Dearness Allowance or pay of the recipients of this quarterly special allowance for any purpose whatsoever. The words alike bonus, E.P.P. and E.S.l., were specifically added. The quarterly Special Allowance payable to the News Editors, Chief Sub-Editors, Chief Reporter, Sub-Editors and Reporters has been enhanced and it was specifically mentioned under clause (6) of the agreement that it will be strictly paid once in every quarter only since it is not a wage. It may be mentioned that thee agreements entered into between the management of the Deccan Chronicle and their employees are still in force and terms of the agreements are being observed by the parties thereto, throughout giving the agreements a high degree of permanency. But the management treating the payments being made to their employees under the above Special Allowance scheme as not not been taking that amount into account for the purpose of making its contribution under the Employees State Insurance Act, 1948. Under the First Schedule, the amount of weekly contribution payable in a contribution period in respect of an employee shall be calculated with reference to the average daily wages during the first wage period in respect of that employee ending in such contribution period. This Schedule would, therefore, require the determination of the wages being paid to the employees by the management. For the purpose of contribution being made by the management under Chapter IV of the above Act the management is treating this quarterly Special Allowance being paid to the employees as not constituting a wage. The department disagreeing with that view of the management had called upon the management to make contribution treating the Special Allowance being paid to the employees as wage. The mnagement has thereupon disputed this claim and went before the Employees Insurance Court at Hyderabad, under S. 75 of the above Act. The Employees Insurance Court by its judgment dated 14/03/1977. Held that the quarterly special allowance being paid by the management to the employees is wage and is, therefore, liable to be taken account of for the purpose of calculating the amount of contribution to be made by the management under the above Act. The findings of the Insurance Court are, that the quarterly special allowance agreed to be paid by the Management to the employees falls under "additional remuneration", if any, referred to in later part of S. 2 (22) of the above Act. Having been aggrieved by that finding of the Employees Insurance Court, the Management has filed this Civil Miscellaneous Appeal under S. 82(2) of the above Act.

(3.) Mr. Srinivasa Murthy, learned counsel appearing for the management, has argued that this quarterly special allowance cannot be regarded as wage coming under the definition clause of S. 2(22) of the above Act. This argument is that the agreement entered into between the management and the employees is merely a temporary agreement and that is more it expressly provides that the quarterly Special Allowance shall not be treated and accounted as wage for the purpose of Employees State Insurance Act, and therefore, the Employees Insurance Court is in error in holding that the quarterly Special Allowance is a wage for the purpose of the Act. He particularly attacked the judgment of the Employees Insurance Court which held that the quarterly special allowance, which is made payable at the end of every quarter, still falls under the description of "Additional remuneration" by reason of the fact that it is being paid every month. He has argued that the settlement entered into between the parties on 31/03/1973, as revised on 28/04/1976, does not form part of contract of employment between the management and their workmen and, therefore, the finding of the Employees Insurance Court that it is wage is wrong.