whether any ex gratia payment made to the employee by the Bank would be regarded as
Bonus (production, incentive or customary). This Court held that it was not. It was held that it is not possible to employ a term of service on the basis of employment contract. It was held that the payment made as ex gratia was neither in the nature of production bonus nor incentive bonus nor customary bonus and nor any statutory bonus.
It cannot be regarded as part of the contract “employment”. It was accordingly held that the ex gratia payment made by the Bank cannot be regarded as remuneration paid or payable to the employees in fulfillment of the terms of the contract of employment within the meaning of definition of wage under Section 2 (rr) of the ID Act. We are, therefore, of the considered opinion
that the respondent rightly paid Rs.1103.40 to the appellant by way of his wages for one month along with his dismissal order. Such payment, in our view, was made strictly in accordance with the requirements of Section 2(y) read with Section 6E (2) of the Act. On the other hand, we find that the appellant failed to adduce any evidence to prove that Rs.110/ was being paid to him every month by the respondent as a part of his term of the employment and, if so, under which head. In view of the foregoing discussion, we are of the view that the High Court was not justified in holding that such amount, even if, held to be the wages, the same could be adjustable against the payments made by the respondent under other head in the appellant’s monthly wages. The High Court, in our view, failed to examine the main question as to whether a payment of Rs.110/ was in the nature of “wages” or its component within the meaning of Section 2(y) of the Act. Without deciding this question, the High Court held that such amount could be adjusted against the payment made by the employer (respondent) to the appellant under “leave encashment”. In our opinion, it was not the correct approach.