-- M.K. Prashar, Mumbai

Dearness allowance is undoubtedly included in the definition of "salary" or "wages" under section 2(21) of the Payment of Bonus Act. In one case, it has been held that the free food allowance would be "wages" within the meaning of Payment of Bonus Act, if it is part of the remuneration and was payable on fulfilling the terms of employment or it is paid in lieu of the whole or part of the salary or wages payable to an employee. On the facts of one case it has been held that the food allowance is not part of the "wages".

Similarly, the value of uniforms and chappals/slippers could not be said to be remuneration and hence cannot come within theterm "wages" or "salary" of the Payment of Bonus Act.1 However, city compensatory allowance will be taken into consideration to calculate bonus payable to the employees in the absence of an agreement under section 34 of the Act between the employer and the employees relating to any formula for the payment of bonus.2 The Gujarat high court has held that even a suspended employee will be entitled to bonus on suspension allowance under the Payment of Bonus Act.3

1. S.P. Janakipatti vs. Presiding Officer, Labour Court, Madras and Another, 1979 II LLJ 340 (Mad. HC).

2. S. Krishnamurthy vs. P.O., Labour Court, 1986 I LLN 710 : 1986 I LLJ 133: 1986 (53) FLR 535.

3. Project Manager, Oil & Natural Gas Commission vs. Sham Kumar Sehgal & Another, 1995 LLR 619 (Guj. HC).

Our establishment is covered under the Payment of Gratuity Act. The visiting inspectors have advised that we should display the abstracts of the Act and the rules. Is it necessary that an employer should display any notice under the Payment ofGratuity Act and the Rules?

-- A.D. Singh, New Delhi.

Yes. There is statutory obligation under Rule 4(1) to display a notice conspicuously at or near the main entrance of the establishment in bold letters in English and in language understood by the majority of the employees specifying the name of the officer with designation authorised to receive notices under the Act or the rules. A fresh notice is required to be displayed as per Rule 41(2) of the rules immediately after the notice referred to in sub-rule (1) becomes illegible or requires a change. The displaying of abstract of the act and the rules at a conspicuous place at or near the main entrance of the establishment by the employer has also been made obligatory under Rule 20 of the Payment of Gratuity (Central) Rules, 1972. The rule provides that the employer shall display an abstract of the Act and the rules made there under as given in Form "U" in English and in the language understood by the majority of the employees at a conspicuousplace at or near the main entrance of the establishment.

In view of the changing scenario, when the enlightened employers are emphasising human resources development, we are also moving in this direction. We have been advised by our consultants to improve the working conditions of our workers. We seek your opinion as to whether good conditions of work in any industry play an important role in establishing the industrial peace and increasing productivity of the workers?

-- Raj Kishan Ahuja, Ghaziabad

Yes. The conditions under which workers perform their tasks have a great influence on their health, efficiency, ways and industrial relations. The presence of good and healthy working conditions bring about a contended labour class, besides increase in productivity of the workers through an increase in their efficiency, lowering down the heavy rate of absenteeism and high labour turnover to rather minimum, as these give permanency to the labourers to reside near the work place. On the contrarylack of good working conditions results in a discontended labour force, fall in efficiency and in production, high rate of labour turnover and absenteeism besides widening the gulf between the employers and employees and such conditions compel the workers to leave the factories and visit their village as often as possible to get relieved of the tensions of the industrial life.

The enlightened employers have felt the necessity of improving working conditions of their own accord, while others have rarely done more than that they are forced to do by law and even this much provision is evaded in certain cases.

Our workers have been agitating at the instance of trade union representing the workers and have been staging violent demonstration by using abusive and threatening language to the executives. As a result there to the image of the company has been besmirched. Willing workers and the officials of the company are humiliated. What steps can be taken by us to restrain the workers? Can we approach thelabour authorities including constituted under the Industrial Disputes Act? In case, there no such remedy, can we approach the civil court?

-- Sham Sunder, Pune

There is no provision under the Industrial Disputes Act or any labour law to approach the authorities or the Labour Court or the Industrial Tribunal for restraining the workers from staging of demonstration or picketting by workers. But holding of demonstration is not an absolute right of the workers or the trade unions.

The civil courts, when approached, can strike a balance between right of the workers and that of the employer in holding that no demonstration can be staged within the radius of 50 metres of the gates of the establishment. For ready reference, the following judgments can be referred to in support of arguments for grant of injunction order.

Mahanagar Telephone Nigam Ltd. vs. Bhartiya Mahanagar Telephone Nigam Karamchari Sangh and Ors., 1991 LLR 792 : 1992 (65) FLR 30 (Del.HC).

Ram Singh & Ors. vs. Ashoka IronFoundation & Ors., 1993 LLR 327 : 1993 (66) FLR 1006 : 1993 II CLR 362 (P&H HC).

Ashoka Machine Tools Corpn. vs. Bhartiya Udyogic General Kamgar Union & Ors., 1994 LLR 342 : 1995 (70) FLR 238 : 1994 II LLN 142 (Del. HC).

The East India Hotels Ltd. vs. Oberoi Intercontinental Hotel Employees Union (Regd.) & Ors., 1994 LLR 929: 1995 I LLJ 1177 (Del. HC).

Ranutrol Ltd. vs. All India Engineering & General Mazdoor Union & Ors., 1995 LLr 372 : 1995 I LLJ 408 (Del. HC).

Delhi Security Printers vs. hindustan Engg. & General Mazdoor Union, 1966 LLR 714 (Del. HC).

Standard Chartered Bank vs. Chartered Bank Employees’ Union & Ors., 1996 LLr 418 (Del.HC).

Punjab & Sind Bank vs. Punjab & Sind Bank Officers Committee, 1997 LLR 1111 (Del. HC).

We have to terminate the services of an employee who is covered under ESI Act. I seek clarification. Can an employer terminate the services of an employee during his period of sickness, if he is covered under E.S.I. Act?

-- M.N. Ganguli,Calcutta

Section 73 of the Employees' State Insurance Act, 1948 prohibits an employer to dismiss, discharge or reduce or otherwise punish the employee during the period an employee is in receipt of sickness benefits or maternity benefits!

However, the cases of abandonment of service on the part of an employee are not covered.

It has been held that the refusal of the employer to take back an employee after remaining absent with leave and thus giving effect to Standing Order 8(2) did not contravene the provisions of section 73 of the Act.

2 In another case, it has been held that if the termination of services of an employee follows automatically either from the contract or from standing order, section 73 of the ESI Act does not apply in such case even if the employee remained sick during the last days of his service and was in receipt of sickness or disablement benefit.3 and 4

1. Premier Tyres Ltd. vs. A. Abraham, 1976 Lab.IC 684:1976 I LLJ 161:1976 I LLN 518.

2. Buckingham & Karnataka Co.Ltd.vs. Venkatiah, 1963 (7) FLR 343:AIR 1964 SC 1272:1963 II LLJ 638:25 FJR 25 (Supreme Court)

3. Moti Singh vs. The Factory Manager, Cimmco Ltd., Bharatpur & Anr., 1989 (58) FLR 900 (Raj. HC).

4. Management of Guestkeen Williams Ltd. vs. Presiding Officer, 2nd Additional Labour Court, 1992 I CLR 433 (Kar.HC) (DB).

Some of our employees are in the habit of absenting themselves and we have to take disciplinary action. Can we dispense with the services of those employees who are in the habit of absenting themselves despite warnings? Also whether the punishment of dismissal will be proportionate to the misconduct of habitual absenteism?

-- Ram K. Kulkarni, Jalgaon

Absence from duty for a short period or for a day or two is not an offence serious enough to merit dismissal, but during the period of his duty if a workman leaves the premises without permission and does so repeatedly, then it becomes a serious misconduct and he may be punished and even discharged. In one case, the attendancerecord of the workman established that he was chronic defaulter.

He has not given up the habit of attending office at his convenience and then behaving in arrogant fashion.

His removal from service was held not to be harsh. It was further held that the order of the minister cannot be faulted because the time has come when it is necessary to observe some discipline and some norms of good behaviour in employment.

1 The Kerala high court has also held that the dismissal of a ‘workman’ guilty of habitual absence will be justified.2 In another case the Madras high court has come with a categorical judgment which says that if an employee has lost the confidence of the employer due to habitual and frequent absence from duties, his dismissal by the management will not be unjustified. It was further held that if the labour court orders for the reinstatement of the employee, it would perpetuate the ruptured feeling between the parties which would be harmful for both.

1. Indian United Mill Ltd. vs. RashtriyaMills Mazdoor Sangh, Bombay, 1959 II LLJ 120 (IC Bom) and B.M.S. Motor Service, Coimbatore vs. Workmen, 7 FJR 602 (IT): Chandrakant Tatoba Kumbhar vs. The Chairman, Agriculture Produce Market Committee and Ors., 1989 LLR 166.

2. K.I. Varkey vs. FACT Ltd., 1993 LLR 263 (Ker.HC).

3. M. Arungiri vs. Bata India Ltd., 1991 LLR 7 (Mad. HC).