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An illegally dismissed employee is entitled to both the wages and bonus: Calcutta High Court.

When calculating ‘wages’, the bonus would not be included but while paying wages to an illegally dismissed employee “bonus” is to be added to the “wages” due to the legal fiction that the illegally dismissed employer was in continuous service. It is to be kept in mind that “bonus” not included within the meaning of “wages” and “bonus” of an illegally dismissed employee are different things. A single Judge bench comprising Hon’ble Justice Abhijit Gangopadhyay in the matter of Kanchan Oil Industries Limited Vs. Sri Ranganath Sukla & Anr (WPA 3111 of 2016), Dealt with an issue where an employer filed a writ application against the order passed by the Second Labour Court in connection with an application under Section 33C(2) of the Industrial Disputes Act, 2 1947, (ID Act, in short).

In the present case, the employee was a security person/darwan in the oil mill of the petitioner, who was on unauthorised leave for some time. Because the leave was unauthorised, a disciplinary proceeding was initiated against him, where on the first day he arrived with a stranger, and hence was not allowed to participate and other next further dates he remained absent, hence the proceeding went Ex-parte and the employee was terminated. The employee challenged the termination and the matter was taken up by the 7th Industrial Tribunal where oral evidence was adduced by the parties and documents were exhibited.

To this, the employer had submitted before the court that the 2nd labour court had gone beyond its jurisdiction and have wrongly awarded interest on the amount due to the employee. The petitioner further clarified my mentioning the definition of wages as given in Section 2(rr) of the ID Act that the wages can never include the VDA, the bonus and the medical allowance. The petitioner also stated that the amount that was required to be paid as per the award has been paid but the respondent was not entitled to get any more amount any further.

The employee/Respondent submitted the petitioner had withheld the salary statement etc, to suppress it from the tribunal that the employee was getting VDA, Medical Allowances and bonus. The respondent also submitted that he was getting house rent which he could not prove as well as the petitioner submitted that the 2nd labour court did not exceed its jurisdiction if it only calculated the amount which comes within the definition and meaning of wages. Further the respondent submitted that as the dismissal was held illegal, so a legal fiction comes into play which holds the employee was in service without any break and hence he cannot be deprived of the bonus. Moreover, a Bonus is something paid in excess of the wages. Therefore, as per the respondent, the direction by the 2nd Labour Court for payment of bonus cannot be said as a direction beyond Jurisdiction as because the 2nd Labour Court had only calculated the benefits to be given to the employee in accordance with the award.

After hearing both sides the court observed that- “that the employee/respondent was deprived of the amount of money which he is entitled to and therefore, he is also entitled to interest as consequential benefit. Calculating the interest part as 10% per annum is not an exorbitant rate at all and the same need not be interfered with”. Further, the court directed to pay the amount which earlier had been deposited the Registrar General of this Court by the Company (i.e. the writ petitioner) within a period of one month from the date the said amount to respondent No.1 with accrued interest thereon till the date of withdrawal of the amount from the bank. Further, it directed, the petitioner to pay the rest of the amount with interest @ 10% per annum from the date of dismissal of the employee till the date immediately before the date of payment.

Thereby the court dismissed the writ petition with a cost of Rs.25,000/-, that the petitioner needs to pay to the respondent.

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