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Bonus‑Industrial or commercial concern cannot be required to pay even incentive bogus in respect of year in which it is not in sound financial position--Provident Fund--Scheme of contributory provident fund‑Cannot be imposed upon such concern unless there have been fairly good profits for some yeas and future prospect of continuance of such profits are fair. Air Lines

Hotel Ltd. v. Their Warkmen 1961 P L C 1058 (1062) eel.

Habibur Rahman Sharif for Appellant.

S. M. Mofakhar for Respondent.

‑This is an appeal under section 12 (5) of the Industrial Disputes Ordinance, 1959 by Dacca Aluminium Works (hereinafter referred to as to Company) against award in favour of the respondent, 1st party, Dacca Aluminium Workers Association.

The appeal is directed against an award for bonus for one year from July 1963, introduction of a scheme of contributory Provident Fund for the worker's granting of certain leave facilities, and lastly granting of re‑instatement of Spinners. At the time of hearing of the appeal Mr. Habibur Rahman Sharif, learned Advocate appearing for the appellant‑company did not press the grounds of appeal in respect of the award regarding the leave facilities and re‑instatement of the Spinners. Accordingly, the appeal is to be dismissed in respect of the order regarding the leave facilities and re‑instatement of the Spinners as awarded. As regards the remaining two grounds, Mr. Sharif has rightly contended that bonus in respect of a year can be granted only when there has been considerable profits in the business of that that year and further that in requiring the management of an Industry to start a scheme of Provident Fund the financial position of the Industry must be sound. Now, from the evidence of D. W. 2 Monoranjan Saba, the Manager of the appellant-- Company it appears that the company earned profits from 1953 to 1962 but the witness denied having earned any profit in the Sear 1963 this statement is supported by the Production Chart, Exh D., which shows that in 1962 production of Handies and Facies (Fancy Utensils) were of the figures 4190‑38‑3 and 528‑27‑2 respectively as against the figures 240‑13‑1 and 539‑20‑5 respectively for the year 1963. This chart clearly shows that there was a disastrous fall in the rate of production in 1963. The difference is said to be due to non‑availability of Aluminium circle, as the import of aluminium circles was banned in 1963 whereas the import of circles had been open in previous years. The great fall in production in 1963 is also supported by the latter Exh. C dated 22 3‑63. In this letter by the Controller of Imports and Exports, Chittagong to the Director of Commerce and Industries, Dacca two categories of aluminium factories are mentioned, namely, those having rolling capacity and those not having rolling capacity, and it is stated that as the units without rolling capacity cannot compete in the market with the units having rolling capacity the former units are likely to go out of existence.

It is an admitted fact and it is also mentioned in the award that the appellant‑company have no rolling machine. It appears also from the award that in discussing the matter of termination of services of 9 highly waged Spinners whose services had been terminated by the company, the Court was of opinion that it was not "due to their Trade Union activities but was partly due to compelling circumstances and partly due to the policy of the Management in their desperate bid to reduce expenditure . . . . " It further appears from the award that the company admittedly made profits from 1953 to 1962 the learned Chairman did not men tion the financial position of 1963 but observed that bonus should be paid by way of incentive to the workers to work more efficiently. Now, it is quite obvious that a concern cannot in fairness be required to pay even any incentive bonus in respect of a year in which it is far from bring in a sound financial position. In the circumstances, the grant of the demand for bonus was not justified.

In awarding the demand regarding Provident Fund the learned Chairman simply observed as follows:‑

"As regards Issue No. 3 Provident Fund, I hold in the circumstances of the case that this demand should be allowed in case of workers who have completes 5 years of service . .:"

The rate of contribution by the Management as awarded would be equal to the total amount subscribed by the workers and the scheme was to be introduced within two months from the date on watch the award would be published in the official Gazette.

It is now well established that a scheme of contributory Provident Fund cannot be imposed upon an industrial or commercial concern unless it has been earning fairly good C profits for at least some years and it bid; fair to continue to do so is future. In this connection the observation of the Supreme Court of India in the case of Air Lines Hotel Ltd. v, Their Workmen (1961 P L C 958 (1062)) may be usefully quoted:

"While there can be no reasonable objection to this scheme (by way of retiring benefits) the industrial adjudication has in deciding what retiring benefit should be granted to consider first and foremost the financial capacity of the employer to bear the additional burden imposed. Some regard has to be paid to the practice prevailing in other units of the same industry in that region. Future prospects have also to' be taken into consideration."

In the result, we find that the award in respect of the demand for bonus and Provident Fund should be set aside. The appeal is accordingly allowed to this extent. The appeal against the award of re‑instatement of nine workers and leave facilities is rejected as not pressed. The spinners whose re‑instatement has been ordered in the award under appeal shall be re‑instated in their respective posts, provided they report themselves for duty within thirty days from the date of intimation of this order to be sent to them by the Industrial Court by registered post with acknowledgment due, to the address to be supplied to the Court by both the Company and the Union within ten days from the date of receipt of the record of the case in that Court or such further time as the Court may at its discretion attend for supplying the address of the workers concerned intimation shall be sent to both present and home address of the workers and in case of any divergence in the address given by the Union and the Company, the intimation shall be sent to both such divergent addresses. The company shall deposit the entire requisite amount of postal expenses for intimation under this order within such time as the Industrial Court may order.

On resumption of duty each of the re‑instated workers shall get 30 percent of their average monthly wages for the period from the date of termination of his service till the date of publication of the Industrial Court's Award in the official Gazette; the average pay shall be calculated on the basis of the average pay earned during the previous 12 (twelve) months immediately before the month of termination of services.

There will be no order for costs.

.‑I agree.

A. E.

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