1976 PLP 80 (PLC)

2. Before us, it has been a common ground between the parties that the right of the workmen to claim bonus solely depends upon the existence of a custom which according to Mr.M.A. Khadim, the learned counsel for the respondents, has been established from the fact that for three consecutive years before the dispute arose, bonus was being paid by the appellants in spite of losses. It is interesting to note that although before us this has been the principal argument advanced on behalf of the respondents, the claim for customary bonus was not specifically pleaded by them before the learned Chairman.

5. According to various judicial pronouncements both in Pakistan as well as India, it has now come to be established that a custom before it can be validly established in law must be ancient or immemorial in origin, certain and reasonable in nature, not inconsistent with any law, continuous in use, and universally acquiesced by everyone concerned. Applying the same test to the customary bonus, a claim for customary bonus therefore can only be established if bonus is shown t have been paid to t15e workers continuously for many years at a fixed and uniform rate and the parties must have given their acquiescence in such a manner that it can be treated as an integral part of a contract between them The Supreme Court of India: in Grahams Trading Co. (India) Ltd. v. Their Workmen (17 F J R 130) has described the following four factors as relevant for establishing a claim for customary bonus: - (1) Payment must be for unbroken series of years, (2) it must have been made for a sufficiently long period, (3) the workers must have received it even in years of loss, and (4) it must have been paid at a uniform rate.

4. The first essential, therefore, for establishing a valid custom, is the length of time for which the custom has been followed. In the present case, according to the evidence produce, by the parties, bonus bad been paid to the workers in the yeas 1970-71, 1971-72 and 1972-73. No evidence has been produced before us regarding any practice followed in this behalf before the years mentioned hereinabove. Mr. Ghulam Hassan, the learned counst-1 for the appellants has pointed out that a period of three years for which the alleged custom is said to have been followed is very brief and as such not sufficient for establishing a custom. The leaned representative has argued that payment of bonus should have been made for a sufficiently long period, in order to establish a valid claim for the payment of customary bonus. In an attempt to meet this argument, the learned counsel for the respondents has contended that a business custom as opposed to land or family custom need not possess antiquity and may be of a recent origin and for that purpose he has relied upon the case of Jammadas Adukia and others v. Chetandas Daga and others (A I R 1928 Bom. 487) where it was observed: I do not mean that a business custom as opposed to say a land or family custom cannot be established within a period of six years. Their Lordships of the Privy Council pointed out long ago in Jugmohun Ghose v. Manickchand that a business custom may be valid in law although it does not possess antiquity. It is true that a business custom may still be in the process of growth and may not relate back to time immemorial or may be of a recent origin but at the same time the learned counsel for tale respondents has failed to point out even a single authority and we have ourselves not come across any, where a practice followed for a brief period of three years has been recognised as a valid custom in law. It is therefore obvious that the alleged custom e has failed to stand up to the first test under the law for establishing a valid claim to customary bonus.

5. The next factor essential for the proof of customary bonus is the uniformity of rate at which it has been paid because as earlier pointed out a custom in order to be established under the law must be shown to be certain in nature. The evidence adduced in the present case points out that in 1971 the workers received bonus equal to two months' Rages, and in 1912 and 1973, they received bonus equal to sixty-eight days and ninety-five days' wages respectively. Furthermore, according to settlement (Exh. R/7) signed by the parties, bonus was paid to "every employee" but in 1972, according to another settlement (Exh. R/8), signed by the parties, it was paid only to those workers who had completed ninety days' service. Therefore, the alleged custom is uncertain not only with regard to the rate at which the bonus was paid to the workers but also in respect of the workers who were entitled to receive it (bonus) from the appellants. In this respect I may' refer to the case of Vegetable Products Ltd. v. Their Workmen (1966 P L C 51), decided by the Supreme Court of India, wherein it was observed as follows: - The fourth circumstance mentioned above is to the effect that payment should have been made at a uniform rate throughout. That however does not mean that uniformity should be established from the beginning to the end. Take a case where for the first few years payment at a certain rate was made. But, later on, for a much larger number of years payment at a somewhat different but uniform rate has been made. In these circumstances, the tribunal may well come to the conclusion that the payment was at a uniform rate ignoring the first few years.

6. Coming to the next argument, Mr. Ghulam Hassan, the learned representative appearing on behalf of the appellants has pointed out that according to the two settlements (Exs. R/7 and R/8), they were signed after bilateral negotiations between the parties, each time after the workers had served a charter of demands upon the appellants, and demand for bonus being one of them. It is also an uncontroverted position between the parties that each time the appellants had suffered loss which did not ordinarily entitle the workmen to claim bonus from the appellants. This clearly shows that each time the appellants were compelled by the workers to sign a settlement with them after a charter of demands was served upon the appellants. Mr. Ghulam Hassan has therefore argued that only in that case the practice should develop into a valid custom where the employer ungrudgingly pays bonus and the employees similarly receive it and there appears to be lot of force in this argument. In Jugmohan Gose v. Manick chand the Privy Council observed: - It remains now to consider the other ground on which the plaintiff relied the evidence of mercantile usage The usage may be still in course of growth; it may require evidence for its support in each case, but in the result it is enough if it appear to be so valid and acquiesced that it may be reasonably presumed to have been an ingredient tacitly imported by the parties in their contract. It is therefore essential that a practice followed by the parties before being recognised as a valid custom, must have their tacit approval, and should have the common consent of the parties concerned in such a manner that it should come to be treated as an implied term of a contract between them. The circumstances of the present case show that the payments made by the appellants during the three years of loss were merely ex gratia payments which cannot give rise to any custom.

7. The last argument advanced by Mr. Ghulam Hassan is that the customary bonus could only be paid in connection with a festival, which according to him, can be Eid, Independence Day or any other like occasion. Therefore according to the learned representative, the payment of bonus in the present case not being connected with any festival, does not create a right of customary bonus in favour of the workers. We would have gone into this question as well, had we already not held that the respondents have failed to establish their claim for customary bonus. Having already come to that conclusion, going into this point at this stage would not be necessary.

8. The circumstances referred to above therefore compel us to hold that no valid claim for customary bonus has been established by the respondents in the present case, and as a result thereof, this appeal is allowed and the Award of the learned Chairman dated 26-4-1975, is set aside. The appellants will therefore be at liberty to recover any amount from the workers which might have been paid to them (the workers) under the said Award. BASHIR AHMAD MALIK (MEMBER).-I agree. FARHAT ALI KHAN (MEMBER).--I agree.