Time not ripe to include university employees in bonus scheme: Madras high court

ChennaI: Pointing out that the management of educational institutions can claim exemption under section 32 (v) (b) of the Bonus Act, which exempts universities and other educational institutions from payment of bonus to its employees, the Madras high court has set aside an order of the Industrial Tribunal, which allowed the claim of drivers and technical personnel of buses run by Sathyabama University and directed the University to pay bonus to them.

Justice Anita Sumanth gave the ruling while allowing a petition filed by the management of Sathyabama University.

 Originally, the Pudhiya Jananayaga Vagana Ottunargal Matturm Techniciangal Union comprising drivers and technical personnel filed a claim statement before the Industrial Tribunal that the members of the Union are entitled for bonus under the Payment of Bonus Act. The union said the management runs buses for the transportation of its students, teaching and non-teaching staff to the University and collects substantial transportation fee from the students as well as the employees using the facility. As such it is entitled to share the profits from such transport fee, the Union added. Resisting the claim, the management contended that the Bonus Act would not apply in the light of the exemption provided under section 32 (v) (b) of the Act. The Tribunal came to the conclusion that the Institution was not just profitable, but was indulging in profiteering and thus would not be entitled to the exemption and directed the management to pay bonus. Aggrieved, the management filed the present petition.

 Pointing out sub-clause (b) (universities and other educational institutions) and (c) (institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purpose of profit), of clause (v) of section 35 of Bonus Act, the judge said the petitioner’s case all along has been in terms of clause (v) (b) of section 35. Thus, there was really no reason to consider the provisions of sub-clause (c) at all that uses the phrase ‘not for profit’ except that the Union seeks to interpolate that phrase into the previous sub-clause as well, the judge added.

The judge said the petitioner nowhere admitted that it derives a profit from the services of transportation. Though, Senior Counsel S.Ravindran, appearing for the management fairly states that the costs for the provision of such infrastructure will be collected by the petitioner by way of consolidate payments imposed upon the students and faculty, there was nothing to support the conclusion of the Tribunal that the petitioner was engaged in ‘profiteering’, the judge added.

 The judge said, “The union has been seeking the copies of financials of the institution to establish its case. The same have not been produced by the Institution till date. However, no adverse inference can, in my view, be drawn from this fact, as the relevant provision, that is, section 35 (v) (b) does not refer to ‘profitability’ as a factor to be taken into consideration at all”.

 The judge said, “One walks a fine line while appreciating submissions in relation to changing times, evolving circumstances and stark realities on the one hand and the rigour of a statute that binds one in decision making, on the other. No doubt, there are those times that present an opportunity to legislate judicially and make an imprint on the changing sands of time and circumstances, and one must, if such an opportunity presents itself, avail the same, albeit cautiously and in appropriate measure. But this is not one such occasion”.