Holding

Night shift allowance does not form part of wages unless actually earned by working the night shift, and therefore need not be included in the one month's wages required under section 33(2)(b).

Summary

Bharat Electronics Ltd dismissed a bus driver, B. Sridhar, for misconduct and sought approval of the dismissal under section 33(2)(b) of the Industrial Disputes Act, paying him Rs.607.90 as one month's wages. The workman objected, later adding that the amount was short by Rs.12, the night‑shift allowance he claimed he was entitled to under the company's standing orders. The Industrial Tribunal accepted this additional objection and declined the employer's application, holding that the night‑shift allowance formed part of wages. On appeal, the Supreme Court examined the definition of "wages" in section 2(rr) and held that an allowance payable only when the employee actually works the night shift is not part of wages for the purpose of section 33(2)(b). Consequently, the Court allowed the appeal, set aside the Tribunal’s order and approved the employer’s application. The validity of the domestic enquiry was not decided, as the Court found it unnecessary.

Issues considered

Whether night shift allowance is included in the definition of "wages" under section 2(rr) of the Industrial Disputes Act for the purpose of section 33(2)(b).
Whether the employer must pay the night shift allowance as part of the one month's wages before a dismissal can be approved.

Legislation cited

Industrial Disputes Act, 1947s. 2(rr), s. 33(2)(b)

Subjects

night shift allowancedefinition of wagesIndustrial Disputes Actsection 33(2)(b)dismissal approvalallowance inclusiondomestic enquiry

Judgment

BHARAT ELECTRONICS LIMITED, BANGALORE
A
v.
INDUSTRIAL TRIBUNAL, KARNATAKA,
BANGALORE AND ANR.

MARCH 15, 1990
B
[RANGANATH MISRA, MADAN MOHAN PUNCHHI AND
"' K.J. REDDY, JJ.)

Industrial Disputes Act, 1947: Section 33(2)(b)-'Night shift
al/owance'-Whether 'Wages'
Respondent-workman was in employment of the Appellant- c
management as Bus driver. Following an incident of misconduct com·
milted by him, a domestic inquiry was conducted against him under
Standing Orders IS(l)(b) and IS(l)(r) of the Company wherein he was
held guilty by the Enquiry Officer and was eventually dismissed from
the service w.e.f. 31.12.1979. On that day itself the management moved
an application before the Industrial Tribunal under section 33(2)(b) of D
the Act for approval of the action taken and towards meeting the
requirements of the provisions of the act paid to the workman before
hand wages for one month. The workman filed his objection Statement
to that application raising several contentions denying all the allega·
lions made against him and challenging the validity of the domestic
enquiry. This application somehow was kept pending by the Tribunal E

- for over six years when sometime in July, 1986 the workman moved an
application before the Tribunal seeking amendment of his objection
petition to urge an additional ground that one month's wages paid to
him were short by Rs.12, being the monthly night shift allowance as -he
was ordinarily expected to work by rotation as per standing orders of
the Company and thus as full one month's wages had not been paid to F
him as required under section 33(2)(b) of the Act, the approval sought
for ought to be declined. The management contended that the night
shift allowance is neither paid nor payable unless the night shift is
actually performed and thus this amount cannot form part of the
month's wages automatically. The Industrial Tribunal while abandon·
ing giving any finding on the validity of the domestic enquiry, upheld G
the additional obJection taken by the workman and declined the
management's application seeking approval to the dismissal of the
workman. Hence this appeal by special leave by the management. Set·
ting aside the impugned judgment and order of the Tribunal and allow-
ing their application made under section 33(2)(b) of the Industrial Dis-
H
putes Act, this Court in allowing the appeal,
971
972 SUPREME COURT REPORTS I1990] 1 S.C.R.

HELD: The workman had to earn night shift allowance by actu-
~ ally working in the night shift and his claim to that allowance was ~
contingent upon his reporting to duty and being put to that shift. The
night shift allowance did not automatically form part of his wages and it
was not such an allowance which Oowed to him as an entitlem~t of his
service. [98IC]
B
The Tribunal fell into a grave error in declining the application of "'
the management for approval on the ground of short payment of Rs.12
on account of night shift allowance, which the workman supposedly
would have earned had he goue to report for duty. [91HD1

Syndicate Bank Limited v. Ram Nath Bhat, [1967-68] (XXXll) FJR 490
C at 497; Mis. Podar.Mills Ltd. v.Bhaf(wan Singh and Anot/fer, 11974] 3
SCC 157; Bennett Coleman & Co. (P) Ltd. v. Punya Priya Das Gupta,
[1970] 1 SCR 181 and Dilbagh Rai Jarry v. Union of India & Ors., ,.(
[1974] 2 SCR 178, referred to.

D CIVIL APPELLATE JURISDICTION: Civil Appeal No. 744
of 1987.

From the Judgment and Order dated 9.10.1986 of the Industrial
Tribunal Kamataka in Serial No. J/80 in I.D. No. 26 of 1979.

E Narayan B. Shetye, Vineet Kumar and Vinay Bhasin for the
Appellant. -::_

M.C. Narasimhan and Jitender Sharma for the Respondent No. f
2.

F The Judgment of the Court was delivered by

PUNCHHI, J. Whether "night shift allowance" forms part of
"wages" in the context of section 32(2)(b) of the Industrial Disputes
Act, 1947 (hereinafter referred to as 'the Act') is the issue which crops
up for decision in this appeal by special leave against the order dated
6 October 9, 1986 of the Industrial Tribunal, Karnataka at Bangalore in
Serial No. 1of1980 in I.D. No. 26 of 1979.

It arises on these facts.

Bharat Electronics Limited, Bangalore, the appellant-herein, is
H the "management" and the respondent Shri B. Sridhar, "workman"
BHARAT ELECTRONICS v. INDUSTRIAL CORPN. [PUNCHHI, J.] 973

was in employment with the management as a bus driver. The
establishment of the management, at _the relevant time, had about A
13 ,500 employees out of whom about 2,800 were females. The
management provided transport facilities for picking up and dropping
down its employees from and at stipulated official stops. The drivers
plying buses of the establishment on a rotational basis, working on
night shifts, used to get a variable night shift allowance. On May 1, 8
1979 the workman was detailed to work in the first shift for picking up
certain employees of the second shift and general shift, and for drop-
ping school children at various scheduled points. He was also detailed
to pick up female employees, who were to report for the shift com-
mencing from 10.30 a.m. to 7.00 p.m. from the stipulated official
stops. En route the workman did not park his vehicle at one of the
stipulated establishment bus stops but rather quite away from it, which c
caught the attention of Shri K.L. Balasubramaniam, a senior Engineer
in the employment of the Management wanting to go the factory. Shri
Balasubramaniam went there and in the process of boarding the bus
enquired whether he could go to the factory in the same bus. He was in
for a shock to see the workman indulging in sexual act with a woman in D
the gang way of the bus. The sudden appearance of Shri Balilsubra-
maniam surprised the workman and he abruptly and falsely replied in
the negative. The matter was reported to the high officials of the
Management. He confessed his guilt before Shri M.V. Subbarayappa,
Deputy Manager, Transport. The misconduct committed by the work-
man became the subject matter of a domestic enquiry. At the enquiry E
S/Shri Balasubramaniam and Subbarayappa appeared for the manage-
ment and deposed to the aforesaid facts. The Enquiry Officer found
the workman guilty of the misconduct imputed under Standing Orders
15(1)(h) and 15(1)(r) of the Standing Orders of the Company.The
workman was thereafter dismissed from service with effect from
December 31, 1979. On that very day, the management sought F
approval from the Industrial Tribunal, Kamataka at Bangalore under
section 33(2)(b) of the Act of the action taken and towards-meeting the
requirement of the provision paid to the workman before-hand a sum
of Rs.607.90 as wages for one month.
/

Before the Industrial Tribunal the workman filed an objection G
stateme.nt raising various contentions denying inter alia the allegations
made against him and challenging the validity of the domestic enquiry.
It somehow kept pending for over six years though under the
unamended section 32(5), it was required of the Tribunal to without
delay hear the application and pass such order in relation thereto as it
deemed fit. Now with effect from 21-8-1984, three months time limit is H
974 SUPREME COURT REPORTS (1990) 1 S.C.R.

fixed though extendable by an order in writing. Anyway while that was
A
in progress, he made an application on July 13, 1986 before the Tri-
bunal seeking amendment of the objection petition enabling him to
urge an additional ground to the effect that one month's wages paid to
him were short by Rs.12, the monthly sum due for night shift allo-
wance. The additional objection was based on the premises that since
B the workman was ordinarily expected to work on night shift on a
rotational basis as per the Standing Orders of the Company, such
allowance should have formed part of the wages. On that basis it was
urged that since full wages had not been paid to the workman, there
was a serious infraction of the provisions of section 33(2)(b) warrant-
ing the sought for approval to be declined.
c The management could not, and did not, deny that factually the
night shift allowance had not been included in one month's wages as
paid to the workman. The management however maintained that the
question of the validity of the domestic enquiry, which the Tribunal
had already undertaken, should first be settled and that in any case the
D additional objection raised by the workman required leading evidence.
The management further contended that the night shift allowance was
neither paid nor was payable to the workman as he could not be said to
have earned it automatically as part of wages unless he had actually
worked on the night shift. It was pointed out that the said allowance
was variable in nature depending upon the number of shifts in which
E the workman had actually performed work. It was asserted that the
night shift allowance is not payable to the workman when he does not
come for work for any reason and thus was not such allowance which
-
would automatically flow even without working. Lastly it was pro-
jected that since during the pendency of the domestic enquiry the
. workman was under suspension there could otherwise arise no occa-
F sion for his coming on duty to earn the night shift allowance.

The Presiding Officer, Industrial Tribunal, Bangalore relying on
the views expressed by an Hon'ble Single Judge of the Karnataka High
Court in Writ Petition No. 6607 of 1985 decided on August 28, 1986,
titled Ramakrishnappa v. The Industrial Tribunal & Another, sus-
G tained the objection of the workman taking the view that night shift
allowance should have formed part of one month's wages and on that
score went alongwith the workman in abandoning giving any finding
on the validity of domestic enquiry. Consequentially for the view so
taken the management was declined approval to the dismissal of the
workman. So the order of the Tribunal taking that view is directly
H under attack in this appeal by special leave and indirectly at issue is the
BHARAT ELECTRONICS v. INDUSTRIAL CORPN. [PUNCHHI, J.] 975

correctness of the decision of the Kamataka High Court in Ramakrish-
nappa's case aforementioned. A

Two provisions of the Act which would require being adverted to
are these.

Section 2(rr) provides the definition to the word "wages". It B
reads as follows:

"2. DEFINITIONS-In this Act, unless there is anything
repugnant in the subject or context,

(rr) 'wages' means all remunerations capable of
being expressed in terms of money, which would, if the C
terms of employment, expressed or implied, were fulfilled,
be payable to a workman in respect of his employment, or
of work done in such employment, and includes-

(i) such allowances (including dearness allowance) as D
the workman is for the time being entitled to;

(ii) the value of any house accommodation, or of
supply of light, water, medical attendance or other amenity
or of any service or of any concessional supply of food-
grains or other articles; E

(iii) any travelling concession;

(iv) any commission payable on the promotion of
sales or business. or both;
F
but does not include-

(a) any bonus;

(b) any contribution paid or payable by the employer
to any pension fund or provident fund or for the benefit of G
the workman under any law for the time being in force;

(c) any gratuity payable on the termination of his
service;

Section 33(2)(b) as extracted reads as follows: H
976 SUPREME COURT REPORTS I1990] 1 S.C.R.
"33. CONDITIONS OF SERVICE, ETC. TO
A REMAIN UNCHANGED UNDER CERTAIN CIR-
CUMSTANCES DURING PENDENCY OF PROCEED-
INGS-

(2) During the pendency of any such proceeding in
B respect of an industrial dispute, the employer may, in
accordance with the standmg orders appl!caole to a wurK-
man concerned in such dispute [or where there are no such
standing orders, in accordance with the terms of the con-
tract, whether express or implied, between him and the
workman],-

c (b) for any misconduct not connected with the dis-
pute, discharr,e or punish, whether by dismissal or other-
wise, that wor~<:man:

Provided that no such workman shall be discharged
D or dismissed, unless he has been paid wages for one month
and an application has been made by the employer to the
authority before which the proceeding is pending for ap-
proval of the action taken by the employer."

It is not disputed .that section 33(2)(b) was attracted to the facts
E of this case. The only point, as said before, is whether night shift
allowance was to be paid to the workman as part of wages even though
he had not factually worked on the night shift.

The definition of the word "wages", as given in clause (rr) of
section 2 is comprehensive enough to inclpde (vide inclusion 1) such of
IF the allowances as the workman is for the time being entitled. Yet,
de.spite such comprehension, the inclusive meaning is subject to a
meaningful change if there is anything repugnant in the subject or
context. The proviso to section 33(2)(b) mandates that unless the
workman is paid wages for one month and an application as contemp-
lated is made by the employer for approval of his action, no such .
<iJ workman can be discharged or dismissed. The intention of the legisla-
ture in providing for such a contingency is not far to seek and as was
pointed out by this Court in the case of Syndicate Bank Limited v. Ram
Nath Bhat, [ 1967-68] (XXXII) FJR 490 at 497 was "to soften the rigour
of unemployment that will face the workman, against whom an order
of discharge or dismissal has been passed". One month's wages as
!ff thought and provided to be given are conceptually for the month to
BHARAT ELECTRONICS v. INDUSTRIAL CORPN. [PUNCHHI, J.] 977

follow, the month of unemployment and in the context wages for the
inonth following the date of dismissal and not a repetitive wage of the A
month previous to the date of dismissal. If the converse is read in the
context of the proviso to section 32(b), it inevitably would have to be
read as double the wages as earned in the month previous to the date
of dismissal and that would, in our view be, reading in the provision
something which is not there, either expressly or impliedly. We have B
thus to blend the contextual interpretation with the conceptual
interpretation to come to the view that night shift allowance could
never be part of wages, and those would be due only in the event of
working. This Court in Mis. Podar Mills Ltd. v. Bhagwan Singh and
Another, [ 1974] 3 SCC 157 ruled that the date of dismissal under
section 33(2\(b) is the date when the approval application is filed, after
dissmlssal. With effect trom that dll.te_, the occa8ion to earn ,night shift c
allowance cannot, and will not, anse.

This Court in Bennett Coleman & Co. (P) Ltd. v. Punya Priya
Das Gupta, [1970] 1 SCR 181 was called upon to rule whether car
allowance and benefit of free telephone and newspaper were such D
allowances, includible in wages under section 2(rr) of the Act in order
to determine a claim of gratuity of a journalist. This Court held as
follows:

"Since wages has not been defined in the Act, its meaning
is the same as assigned to it in the Industrial Disputes Act. E
Under s. Z(rr) of that Act, "wages" means all remunera-
tion capable of being expressed in terms of money, which
would, if the terms of employment, expressed 9r implied,
were fulfilled, be payable to a workman in respect of his
employment or of work done in such employment, and
includes (i) such allowances (including dearness allowance) F
as the workman is for the time being entitled to; (ii) the
value of any house accommodation, or of supply of light,
water, medical attendance or other amenity or of any
service or of any concessional supply of food-grains or
other articles; (iii) any travelling concession; but does not
include any bonus and other items mentioned therein. Mr. G
Ramamurthi's argument was that the car allowance as also
the benefit of the free telephone and newspapers would fall
under the first part of the definition as they are remunera-
tion capable of being expressed in terms of money. The
argument, however, cannot be accepted as neither of them
can be said to be remuneration payable in respect of emp- H
978 SUPREME COURT REPORTS [1990] 1 S.C.R.

loyment or work done in such employment. Neither the car
A allowance nor the benefit of the free telephone was given
to the respondent in respect of his employment or work
done -in such employment as the use of the car and the
telephone was not restricted to the employment, or the
work of the respondent as the special correspondent. There
B was no evidence that the car allowance was fixed after tak-
ing into consideration the expenses which he would have
ordinarily to incur in connection with his employment or
the work done in such employment. Even if the respondent
had not used the car for conveying himself to the office or to
other places connected with his employment and had used
other alternative or cheaper means of conveyances or none
c at all, the car allowance would still have had to be paid. So
too, the bills for the telephone and the newspapers whether
he used them or not in connection with his employment or
his work as the special correspondent. Therefore we have to
turn to the latter part of the definition and see if the two items
0 properly fall under. So far as the car allowance is con-
cerned, there was, as aforesaid, nothing to suggest that it
was paid to reimburse him of the expenses of conveyance
which he would have to incur for discharging his duties as
the special correspondent, or that it was anything else than
an allowance within the meaning of s. 2(rr) of that Act. It
would, therefore, fall under the inclusive part (i) of the
E
definition. Likewise, the benefit of the telephone and
newspapers was allowed to the respondent and merely for
the use thereof in connection with his employment or
duties connected with it. Both the car allowance and the
benefit of the free telephone and newspapers appear to
F have been allowed to him to directly reduce the expendi-
ture which would otherwise have gone into his family
budget and were therefore items relevant in fixation of fair
wages. [See Hindustan Antibiotics Ltd. v. Workmen, [ 1957]
1SCR652]. That being the position, the two items could on
the facts and circumstances of the present case be properly
regarded as part of the respondent's wages and had to be
G
taken into calculations of the gratuity payable to him."
(Emphasis supplied)

The above extract and more so the emphasised words are signif-
icant to convey that the car allowance and the benefits of free tele-
H phone and newspapers were held allowances inc!Udible in wages in the
BHARAT ELECTRONICS v. INDUSTRIAL CORPN. [PUNCHHI, J.] 979

facts and circumstances of that case. These allowances were held part
of the wages of the journalist on the finding that he was entitled to A
them not as remuneration capable of being expressed in terms of
money but as allowances within the meaning of the First inclusion.

In Dilbagh Rai Jarry v. Union of India & Ors., [ 1974] 2 SCR 178
this Court was required to determine whether "running allowance" B
formed part of wages for the purpose of Payment of Wages Act, 1936.
That was a case in which a railway guard, who was convicted in a
criminal case but later acquitted, and who in the meantime had been
dismissed from service but his dismissal too had been upset by the
High Court followed by his reinstatement, had asked for back wages
for the period between the date of his dismissal and the date of rein-
statement. Finally he was let to this Court reiterating his claim that a c
running allowance was part of his wages which he would have earned
while on duty. This Court in that context observed as follows:

Mr. Bishan Narain further contends that Running Allo-
wance was a part of the pay or substantive wages. In sup- D
port of this argument he has invited our attention to rule
2003 of the Railway Establi.shment Code, clause 2 of which
defines 'average pay'. According to the second proviso to
this clause'in the case of staff entitled to running allowance,
average pay for the purpose of leave salary-shall include
the average running allowance earned during the 12 E
months immediately preceding the month in which a Rail-
way servant proceeds on leave sub.iect to a maximum of 75
per cent'' of average pay for the said period, the average
running allowance once determined remaining in operation
during the remaining part of the financial year in cases of
leave not exceeding one month. The crucial words, which F
have been underlined, show that such Running Allowance
is counted towards 'average pay' in those cases only where
the leave does not exceed one month. It cannot, therefore,
be said that Running Allowance was due to the appellant as
part of his wages for the entire period of his in active
service. Travelling allowance or running allowance is eligi- G
ble if the officer has travelled or run, not otherwise. We
therefore negative this contention."
(Emphasis supplied)

It is noteworthy that running allowance or travelling allowance, as the H
980 'SUPREME COURT REPORTS [1990] 1 S.C.R.

case may be, had to be earned by actually travelling or running, and
A not otherwise, as held in Dilbal(h Rai Jarry's case (supra). Only a
fiction was avatlable for a limited period as per Clause 2003 of the
Railway Establishment Code. The average running allowance once
determined in accordance with the Clause, afore-quoted, was to
remain operative during the remaining part of the financial year only
8 in those cases where the employee had taken leave not exceeding one
month, and not otherwi:;e. In cases of leave exceeding one month the ·;ii
fiction on its· own dropped.

Now copfluencing the two legal thoughts expressed in Bennett
Coleman's case (supra) and Dilbagh Rai Jarry's case (supra), the
stream of thought which inevitably gurgles up is that an allowance
c which from the term of employment flows as not contingent on actual
working is part of wages for the purposes of section 33(2)(b) but an
allowance which is earnable only by active serving is not an allowance
which will form part of wages, within the meaning of the said
provision.
D
In Ramakrishnappa's case Hon'ble Single Judge of the Kama-
taka High Court employed Bennett Coleman's case to come to the
conclusion that night shift allowance was part of the wages by observ- )._.
ing as follows:

"Therefore, I find it difficult to accede to the conten-
tion of the management that conveyance allowance, night
shift allowance and turnout allowance were not wages as
defined in section 2(rr) of the Act, and therefore, they
were not required to be included in computing the wages of
the petitioner for one month. The decision of the Supreme
F Court in Bennett Coleman and Co. [ 1970] 37 FJR 498; AIR
1970 SC 427, though it arose in the context of quantifica-
tion of gratuity, the.view taken therein that the allowance•
given for purchase of newspapers, towards telephone and
conveyance also should be calculated in computing one
month's wages for the purpose of computing gratuity, sup-
ports the construction placed on section 2(rr) of the Act for
the petitioner, for, the Supreme Court invoked the said
definition as the word "wages" had not been defined in the
Working Journalists (Conditions of Service and Miscel-
laneous Provisions) Act, 1955. In the Case of Jarry, AIR
1974 SC 130, on which the learned counsel for the second
hi respondent relied, the question decided was, whether
BHARAT ELECTRONICS v. INDUSTRIAL CORPN. [PUNCHHI, J.] 981

wages payable to a railway guard for the period he was kept
A
.} out of service consequent on his dismissal from service till
he. was reinstated included the amount of running allo-
wance, which was under the rules payable only if the rail-
way servant had gone on duty, and the Supreme Court held
that it was not, in view of the condition. Section 2(rr) of the
Act did not come up. for consideration in that case and, B
therefore, not apposite to this case."
¥
This view, as said before, was adopted by the Tribun~l to decline
approval to the management. But for reasons set out before, we are of
the view that the Hon'ble Single Judge fell into an error in enlarging
the scope of Bennett Coleman's case and dwarfing that of Dilbagh Rai
Jarry's case. Thus the conclusion is inescapable that the workman had c
to earn night shift allowance by actually working in the night shift and
;.... his claim to that allowance was contingent upon his reporting to duty
and being put to that shift. The night shift allowance automatically did
not form part of his wages and it was not such an allowance. like in
Bennett Coleman's case which flowed to him as his entitlement not D
restrtcted to Ii.is service. Thus we hold tbat ~e tribunal fellin16 a.grave
error in declining the application of the management for approval on
the ground of short payment of Rs.12 on account of night shift allo-
·~ wance, which the workman supposedly would have earned had he
gone to report on duty, which in the circumstances he could not, or
having worked rotationally at night, which he did not, and that too E
fictionally, in the month following the month and the date of the
application, on which date the dismissal was to be effective.

- i
We cannot refrain from expressing our concern to th' manner in
which the other issue before the Tribunal regarding the validity of the
domestic enquiry was side-tracked. Had there been a finding on the F
same, one way or the other, we could-have easily finalised the.matter.
For over six years the matter on that count was kept pending and the
additional objection being permitted to be raised was unaccountably
abandoned. The matter could have in this situation been sent back to
the Tribunal but at this late stage we do not propose to do so and are
inclined to close the matter, as we are otherwise satisfied that plea G

~·
about the validity of the domestic enquiry was without merit and even
though raised was by conduct abandoned.

Before concluding the judgment the observations in Syndicate
Bank's case, afore-quoted, are again to be borne to mind. In the facts
and circumstances of this case the management paid to the workman a H
982 SUPREME COURT REPORTS [ 1990] 1 S.C.R.

A sum of Rs.607.90 as a month's salary "to soften the rigour of unemp-
loyment that will face the workman". How could a short payment of
Rs.12 be said to have lessened the softening of such rigour is thought
stirring. Viewed in the context, there could genuinely be a dispute, as
in the present case, as to whether a particular sum was due as wages. It
is, of course, risky for the management to raise it as to pay even a paise
B less than the month's wages due under section 33(2)(b), would be fatal
to its permission sought. But at the same time it needs to be clarified
that it is for the management to establish, when questioned, that the
sum paid to the workman under section 33(2)(b) represented full
wages of the month following the date of discharge or dismissal, as
conceived of in the provision and as interpreted by us in entwining the
c ratios in Bennett Coleman's case (supra) and Dilbagh Rai Jarry's case
(supra) and adding something ourselves thereto.

Thus for the foregoing reasons, we allow this appeal, set aside
the judgment and order of the Industrial Tribunal, Karnataka at
Bangalore and allow the application of the management under section
D 33(2)(b) of the Industrial Disputes Act without any order as to costs.

R.N.J. Appeal allowed.

' .
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