The Madurai Bench of the Madras High Court has ruled that as per the Payment of Bonus Act, if a workman had worked for 30 days in a relevant period, he was eligible for a pro rata bonus. Therefore,once the management was ready to pay bonus as per the law for the period 1991-92 (and it had so notified), it could not refuse to pay ex-gratia amount to workers.
Dismissing a writ petition by Nagammal Mills Ltd, Nagercoil, challenging the order dated May 31, 2004 of the Labour Court, Nagercoil, in computing the amount of ex-gratia as were due to 14 workmen, Mr Justice K. Chandru held that the interpretation given by the Labour Court pursuant to the demands of bonus for 1991-92 and in terms of advice note issued by the Commissioner Labour on October 15, 1992 was in order.Online GST Certification Course by TaxGuru & MSME- Click here to Join
The attempt of the management to make a distinction between workers who had left and those who continued in service, could not be accepted, the judge ruled. It was contended on behalf of the management that a reading of notice dated October 19, 1992 would show that the notice was prospective and it was not applied to workmen who had left service.
In the notice it was stated that all workers who had agreed to abide by the advice of the Labour Commissioner and give a letter in writing, would be given bonus at rate of 8.33 per cent together with an ex-gratia of 11.17 per cent. The judge said that once the management was ready to pay bonus as per the Act, it could not refuse to pay ex-gratia to workers who had left service before the issuance of notice.
What was relevant was the year of payment, and admittedly, respondents 2 to 15 were eligible to get bonus for that year.
The writ petition was dismissed.