Full Judgment Text
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PETITIONER:
THE WORKMEN OF WESTERN INDIA MATCH CO. LTD.
Vs.
RESPONDENT:
THE WESTERN INDIA MATCH CO. LTD.,
DATE OF JUDGMENT:
11/04/1962
BENCH:
MUDHOLKAR, J.R.
BENCH:
MUDHOLKAR, J.R.
SARKAR, A.K.
SUBBARAO, K.
CITATION:
1966 AIR 976 1963 SCR (2) 27
CITATOR INFO :
RF 1968 SC 585 (8)
RF 1972 SC 343 (10)
ACT:
Industrial Dispute--Scale of pay--Condition of service
--Dearness allowance--Employees of sales office and factory,
if could be equated--Earlier settlement--Termination of--
Charter of demand, if could be treated as notice of
termination of previous settlement--Industrial Disputes Act,
1947(14 of 1947), s. 19(2).
HEADNOTE:
R the respondent company has got a factory, with an office
attached thereto, in Alambazar a suburb of Calcutta and also
has its sales office in the commercial area of Calcutta.
Without first giving a formal notice under s. 19(2) of the
industrial Disputes Act, terminating an earlier settlement,
the Union made fresh demands, contained in a charter of
demands, inter alia for the enhancement of dearness allow-
ance, alteration of the basis of computing it and the
revision of pay scale alleging that what they get is much
below what corresponding employees at the sales office get
and that the present rates are inadequate in view of the
rise in cost of living
The dispute relating to dearness allowance alone was first
referred to the Tribunal but later the dispute relating to
grades and scale of pay was also referred to the same
Tribunal.
The Tribunal after overruling the preliminary objection of
the company that it had no Jurisdiction to proceed with the
reference because no notice terminating the settlement as
contemplated by s. 19(2) of the Act was given by the work-
men, found that the employees were not entitled to higher
dearness allowance or to the alteration of the basis of
computation of the dearness allowance, but there has been a
change in the circumstances which justified a revision of
the scale of pay.
Held, (1) that when during the pendency of negotiations the
Union by a letter had asked the company to treat the charter
of demand as a notice under s. 19(2) of the Act without
first terminating an earlier settlement under an award and
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the company had agreed to refer the matter in dispute
28
to the adjudication of a tribunal, the question of a formal
notice under s. 19(2) of the Act was immaterial, for the
presentation of the charter of demand followed by the letter
amounted to a notice of termination of settlement.
(2) that the members of a Union like the one of employees of
the responsible’s factory have bank dealt with by the
company on a different footing from the employees of a sales
office in Calcutta, the former being employees of an
engineering concern and the latter of a mercantile one, who
are governed by the recommendation of the Bengal Chamber of
Commerce and, therefore, the case of the factory employees
cannot be equated with that of the sales office employees.
The factory employees cannot, as of right, demand that the
benefit of the rates fixed by the Bengal Chamber of Commerce
be also given to them, because the rates were not intended
to be applied to them.
Clerks of Calcutta Tramways v. Calcutta Tramways Co. Ltd.
[1956] S.C.R. 722, applied.
(3) that there is no valid reason for compelling employers
to offer uniform terms of employment to their employees
working in different establishments because various
considerations must enter into the question such as the
value of their work to the employer, the employer’s ability
to pay, the cost of living the availability of persons for
doing the particular kind of work and so on The action of an
employers who does not offer uniform condition of service to
all its employees doing work which, broadly speaking may be
called similar, can not be regarded as discriminatory or a
breach of any principle of industrial law.
(4) that the Industrial Tribunal in refusing to extend to
the employees of the respondent in the factory in Alambazar
benefit of dearness allowance formulated by the Bengal
Chamber of Commerce has not contravened any principle of
natural justice or any important principle of industrial
law. Even assuming that an Industrial Tribunal has
exercised its discretion wrongly in not awarding uniform
dearness allowance to all the employees of the same employer
working in different establishments, that is no ground for
interference under Art. 136.
State, of Madhya Pradesh v. G. C. Manager [1955] S.C.R. and
Bengal Chemical & Pharmaceutical Works Ltd. Calcutta V.
Their Workmen, [1959] S. C. R. 136, ralied on,
29
(5) that an award of an Industrial Tribunal cannot
ordinarily be revised unless there is a circumstances ; but
here, there has been a change of circumstances because cost
of living has admittedly gone up since then. This is so
notorious a fact that court is entitled to take notice of
it. The object of awarding dearness allowance is to
neutralise, at least partially, the issue in the cost of
living and in the circumstances the factory employees are
entitled to have the old basis revised.
Burn& Co. Ltd. v. Their Workmen, 19561 S.C. R. 781, referred
to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION Civil Appeal No. 429 of 1961.
Appeal by special leave from the Award dated September 16,
1958, of the Fourth Industrial Tribunal, West Bengal, in
Cases Nos. VIII-II of 1958.
N. C. Chatterjee, A. N. Sinha and Dipak Dutta Choudhri for
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the Appellants.
C. K. Daphtary, Solicitor-General of India, B. Sen and B. N.
Ghosh for the respondent.
1962. April 11. The Judgment of the Court was delivered by
MUDHOLKAR, J.-This is an appeal by special leave against an
award made by the court of Industrial-Tribunal, West Bengal,
Calcutta.
The relevant facts are these : The Western India Match Co.,
(respondent) has got a factory with an office attached
thereto in Alambazar, which is a suburb of Calcutta. It has
also got a sales office at Calcutta which is situate in the
commercial area. Certain disputes arose between the factory
employees and the respondent, pursuant upon the presentation
of a charter of demands by them to the respondent on January
25, 1957. These demands were seven in number. The demands
included enhancement of the dearness allowance and
alteration of the basis of computing it. They
30
also included a demand for the revision of pay scales. The
respondent was unwilling to concede the demands and
thereupon the appellant-union approached the Labour
Commissioner, West Bengal. Apparently on his suggestion
certain conferences were thereafter held between the parties
and the Conciliation Officer with a view to arrive at a
settlement. During those conferences certain. counter
proposals were put forward by the respondent but they were
not accepted by the union. Eventually the Government of
West Bengal by its order dated January 14, 1958 referred the
dispute relating to the dearness allowance alone to the
Fourth Industrial Tribunal at Calcutta but not the other
disputes. Conciliation proceedings regarding other disputes
were resumed after the aforesaid reference was made and on
May 23, 1958 a settlement was reached between the Union and
the respondent on all issues excepting the one relating to
grades and scales of pay. It was agreed that this issue be
referred for adjudication to the same tribunal which was
dealing with the question of dearness allowance Upon this
the Government of West Bengal referred that issue to the
Fourth Industrial Tribunal, West Bengal by order dated June
3,1958.
Before dealing with the contentions of the parties it would
be desirable to set out some more facts. The Western India
Match Co., has got factories not only at Alambazar but also
at Bareilley in Uttar Pradesh Ambernath in Maharashtra,
Tiruvottiyur in Madras and at Port Blair. The Factory at
Alambazar was established in the year 1930. Besides these
factories the respondent maintains separate sales offices at
various places in India to push sales and execute orders.
One of such sales offices is located in the city of Cal-
cutta.
At the time of the reference 1, 866 persons were employed in
the factory at Alambazar. Out
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of them 1,504 were daily-rated or piece-rated employees and
the remaining 362 were monthly-rated employees. Amongst
them 27 were officers, 67 clerks and 32 supervisors. The
rest were bearers, watchmen, malis, fitters etc. Apart from
the officers all the monthly-rated employees admittedly Fall
within the definition of workers under the factories Act.
In the year 1946 a union called the Wimco Mazdoor Union was
formed comprising only of the daily-rated and piece-rated
workers. This union was given recognition by the
respondent. In the year 1950 another union called the Wimco
Employees, Union comprising solely of the monthly-rated
employees, other than officers, was formed and was duly
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recognised by the respondent. One of the conditions under
which the recognition was given was that its membership
should consist only of monthly-rated employees of the
factory except the officers.
Shortly after the recognition of this Union it entered into
an agreement with the management of the respondent company
whereby the scales of pay, dearness allowance and various
conditions of service of the monthly paid employees at Alam-
bazar factory were settled. The date of this agreement is
September 29,1951.
Certain disputes arose between the Union and ’the respondent
in the year 1954 which were referred by the Government of
West Bengal by its order dated September 1, 1954 to the
Second Industrial Tribunal, West Bengal, for adjudication.
In the course of the proceedings, however, an agreement was
reached between the appellant-union and the respondent on
April 29, 1955. Eventually on September 15, 1955 an award
made in pursuance of the settlement arrived at was published
in the Calcutta Gazette. It may be mentioned that the
32
settlement related to various matters relating to the
conditions of service of employees including pay and
dearness allowance. Further, under this agreement the
production bonus which the monthly rated workmen received
was merged in their basic pay. The aforesaid award was
terminable upon giving two months’ notice commencing after
December 31, 1956. Without giving a formal notice
terminating the agreement the appellant-union made fresh
demands on January 25, 1957 pertaining to the same matters
which were covered by th at agreement.
What happened thereafter has already been indicated by us
above.
The main ground on which the appellant union sought revision
of the previous award and the alteration of the basis of
computation of the dearness allowance and alteration of the
scales of pay is that what the respondent is paying to the
factory employees works out to something very much below
what corresponding employees at the sales office get. This,
they say, is unfair. The second ground on which their claim
with respect to these two matters is based is that other
com. parable concerns give better terms to their employees
than the respondent. The third is that the present rates
are inadequate in view of the rise in cost of living and the
fourth, that the respondent in making large profits and can
easily afford an upward revision in dearness allowance and
scales of pay.
On behalf of the respondent a preliminary objection was
taken to the effect that the tribunal had no jurisdiction to
proceed with the reference because no notice terminating the
settlement as contemplated by s. 19, sub-s. 2 of the
Industrial Disputes Act, 1947 was given by the appellant.
On merits its contentions were
33
(1) that the conditions of service of
employees of the sales office are different
from those working in the factory;
(2) that there has been no material change
of circumstances since the making of the
previous award justifying any revision of the
scales on the lines suggested;
(3) that the conditions of service to scales
of pay and dearness allowance prevailing in
the factory at Alambazar are as good, if no
better, than those of employees of other
concerns such as Bridge &. Roof Co., Imperial
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Chemical Industries, Hindusthan Lever and
Marshall & Sons which. are in fact much larger
concerns and cannot be compared with the
respondent-company;
(4) that the respondent has not the capacity
to pay higher dearness allowance to its
monthly-rated employees in the factory, due to
increase in the cost of production, labour
charges, enhancement of excise duty and keen
competition of the products which have
together resulted in reducing the percentage
of profits.
The preliminary objection was overruled by the Tribunal.
It, however, bold that the employees at the factory were not
entitled to a higher dearness allowance or to the alteration
of the basis of computation of the dearness allowance but
that there has been a chanae in the circumstances which
justified a revision in the scales of pay. The Tribunal
accepted the contention and adopted the revised scales of
pay offered by the respondent-company to the appellant-union
daring the conciliation proceedings
Mr. B. Sen for the respondent-company reiterates the
objection based on s. 19 (2) of the Industrial Disputes Act
1947. That provision is to the
34
effect that a settlement arrived at between the employer and
the employees shall be binding for such period as is agreed
upon by them and if no such period is agreed upon for a
period of six months from the date of the settlement and
shall continue to be binding on them after expiry of that
period until the expiry of two months from the date on which
a notice in writing of his intention to terminate the
settlement is given by one of the parties to the other
party. Unquestionably the parties had arrived at a
settlement on April 29, relating, amongst other things, to
dearness allowance and the scales of pay and no formal
notice as contemplated by sub. s. (2) of s. 19 was given.
In our opinion, however, it is not open to the respondent-
company to raise this contention in so far as revision of
Pay scales is concerned because in the memorandum of
settlement May 23, 1958 signed by the representatives of the
parties to this appeal it is clearly provided that the
revision of scales of pay be referred for adjudication to
the same Industrial Tribunal which was dealing with the
question of dearness allowance. Besides, that, this
memorandum contains the following recital:
"Parties were met jointly on several occasions
as a result of which the entire dispute,
except the issues of (1) Dearness allowance
(which has already been referred to the Fourth
Industrial Tribunal for adjudication) and (2)
Revision of scales of pay, has been settled on
the following terms;..........."
This recital shows that the respondent was agreeable to
refer to the Tribunal not only the issue relating to
revision of pay scales but also that dealing with dearness
allowance. Further, in para 37 of its written statement the
respondent-company clearly accepted the’ position that the
Tribunal had jurisdiction to deal with the issue of dearness
allowance. This circumstance precludes the respondent from
35
now objecting to the jurisdiction of the Tribunal, Apart
from that we may point out that in its reply dated March 29,
1957 to the charter of demands sent on behalf of the
appellant-union it was stated that the previous settlement
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had not been validly terminated and in answer to that the
General Secretary of the Union wrote on April 8,1957 saying
that various representations made by the union to the
respondent and the presentation of the charter of demands
amounts to a notice of termination of the settlement. Thus,
though no formal notice under s. 19(2) was given this letter
can itself be construed as notice within the meaning of that
provision. It may be noted that the representation was made
long after the expiry of two months from this date. For
these reasons we overrule the contention of Mr. Sen.
Now, coming to the merits, the main point urged by Mr.
Chatterjee on behalf of the union is that there has been
discrimination between the employees of the respondent in
the Alambazar factory and their counterparts in the sales
office in Calcutta. According to him even though these per.
sons do the same kind of work they are given different
grades and scales of pay and different scales of dearness
allowance. He contends that the employees of the same
employer doing the same kind of work in the same city ought
not to be differentiated in this manner and that decision of
the Tribunal denied the members of the appellant-union
equality with their counterparts in the sales office and is
contrary to the principles of industrial law we may,
however, point out that the appellant-union claimed party
with-the sales office employees only in the matter of
dearness allowance and have referred to the existence of
different pay scales in the sales office only in support of
their claim for an upward revision of the present pay
scales. It is, therefore, not open to learned counsel now
to urge that the pay scales also
36
should be same for the factory employees as for the sales
office employees. We shall, therefore, consider the
argument based on the ground of unwarranted discrimination
only in so far as it relates to the question of dearness
allowance.
For considering this argument it is desirable to bear in
mind the history of industrial adjudication in Bengal and
also the precise reason why a different basis for computing
dearness allowance is applied to the respondent employees in
the sales office from that applied to its factory employees.
Towards the end of the year 1945 the Bengal Chamber of
Commerce made an enquiry as to the cost of living of the
clerical staff employed in mercantile firms in the city of
Calcutta. On the basis of that enquiry it fixed a certain
amount as dearness allowance for these employees. It also
fixed for the employees what it called the middle class cost
of living index and recommended acceptance of its findings
to its constituent members. Mr. Sen stated that the
respondent’s sales office is a member of the Bengal Chamber
of Commerce but its factory in Alambazar is not a member of
the Chamber of Commerce and this was not controverted by Mr.
Chatterjee.
In the year 1948 disputes arose between the employees and
employers of engineering firms in Calcutta as well as
employees and employers of mercantile concerns in Calcutta.
These disputes were referred to separate Industrial
Tribunals. The first Engineering Tribunal was appointed on
July 3, 1948 to which disputes relating to 119 companies,
including the respondents factory, were referred. The award
made by it was eventually published in the Calcutta Gazette
and effect was given to it. Further disputes arose between
some engineering concerns and their employees. These were
referred to a second Engineering Tribunal on August 31, 1950
37
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and effect was given to its award. It would, there. ’fore,
appear that members of a union like the one of employees of
the respondent’s factory at Alambazar have been dealt with
on a different footing from the employees of a sales office
in Calcutta, the former being employees of an engineering
concern and the latter of a mercantile one. It was,
however, contended before us that they are not two indepen-
dent undertakings but parts of the same one, that is,
Western India Match Co., and, therefore, in the matter of
payment of dearness allowance at least they should be dealt
with on the same footing.
As we have already pointed out the employees in the sales
office are governed by the recommendations of the Bengal
Chamber of Commerce which .the respondent was more or less
bound to accept to be in line with other similar
establishments and, therefore, the case of the factory
employees cannot be equated with that of the sales office
employees. In Clerks of Calcutta Tramways v. Calcutta Rail-
ways Co. Ltd.(1) the clerical staff of the Calcutta Tramways
claimed that since they belonged to the middle class they
should be paid dearness allowance on the basis of the
finding of the Bengal Chamber of Commerce. Their plea was
negatived by this Court on the ground that in the matter of
grant of dearness allowance no hard and fast rule is appli-
cable to all kinds of employees, that there are different
grades amongst middle classes and the clerical staff of the
Calcutta Tramways cannot claim to be awarded dearness
allowance at the rates fixed by the Bengal Chamber of
Commerce for mercantile firms. It may further be pointed
out that the factory employees cannot all claim to belong to
the middle class because admittedly two-thirds of them
belong to what is known as the subordinate staff.
It may be that the clerical staff both in Calcutta proper
and, in Alambazar does work which
(1) [1956] S.C.R. 772.
38
one set of clerks does is not the same as that of the other
set. Clerks in the factories have to do work in connection
with the manufacturing processes in the factory, the labour
employed in the factory, raw materials arriving in the
factory, the finished products of the factory and so on and
so forth. The work which the clerical staff in the sales
office has to do is connected with the marketing of the
finished product, dealing with other firms, carrying. on
correspondence with the head office and other units and so
on and so forth. There is no identity in the work of the
two sets of clerical staff though there may be similarity.
It is said that the work they do carries more
responsibility. That may or may not be so but clearly ’if
the work each set of employees does is hot identical, it
would be open to the employer to place different values on
them. The same thing could be said about the work of the
subordinate staff. If under these circumstances the
respondent agreed to adopt a different mode .of computation
of dearness allowance in respect of the employees in the
sales office from that offered by it to the employees in the
factory, could it be said that the respondent was making
invidious distinction? The sales office being a mercantile
office the respondent bad to fall in line with other similar
establishments and pay to the employees in the sales office
the same dearness allowance as other mercantile firms were
paying to their employees. In the circumstances the
factory employees cannot as of right demand that the
benefit of the rates fixed by the Bengal Chamber of
Commerce be also given to them though those rates were not
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intended to be applied to them.
Moreover it has to be borne in mind that in the previous
settlement the appellant-union was content to accept, the
working class cost of living index as the basis for
determining their dearness
39
allowance and even in their present demands they have
alternatively suggested that the same be adopted with
certain variations in the rates in three slabs.
It is true that the employees in Alambazar as well as in
Calcutta are living within the limits of the Corporation of
Calcutta. But that circumstance though relevant is not by
itself sufficient to justify payment to them of the same
rate of dearness allowance as the sales office employees.
We cannot ignore the fact that the employees of other
factories situate in that area are not paid dearness
allowance at the rates formulated by the Bengal Chamber of
Commerce and, therefore, if those rates are adopted by the
respondent with respect to the factory employees the
existing industrial peace in that region may be destroyed.
The tribunal must, therefore, be said to have exercised its
discretion properly in not acceding to the appellant’s
demand in this respect.
We may also point out that the employees in the factory have
been recruited on terms and conditions which from the
beginning are different from those that govern the sales
office employees. It is not disputed that certain benefits
such as those relating to rations, free quarters, gratuity
etc., which are extended to the factory employees are not
extended to the sales office employees. What is said,
however, is that the sum total of these considered along
with the pay and dearness allowance of the factory employees
still place them at a disadvantage as compared to the sales
office employees. It is true that the sales office
employees are, by and large. in a comparatively better
position; but that again is due to the fact that
recruitments in the two establishments have all along been
made on different terms and conditions.
We do not think that there is any valid reason for
compelling employers to offer uniform terms of
40
employment to their employees working in different
establishments because various considerations must enter
into the question such as the value of their work to the
employer, the employer’s ability to pay, the cost of living,
the availability of persons for doing the particular kind of
work and so on. Indeed, the Minimum Wages Act itself
proceeds on the basis that the employer has large discretion
in so fax as the most important condition of service is
concerned, that is, pay, so long at it is not below the
minimum wage prescribed. It is a well known fact that the
highest employer, the State, does not offer uniform
conditions of service to all employees doing work which,
broadly speaking, may be called similar. Thus to take one
illustration, the clerical staff and the menial staff-now
called class IV staff-employed in the Secretariat are
governed by terms and conditions of service different from
those prevailing in other offices such as those under the
Delhi Administration. High powered Pay Commissions have not
regarded this as discriminatory treatment or breach of a
principle of industrial law. In the State of Madhya Pradesh
v. G.C. Mandawar (1) it was contended on behalf of the
clerical staff in the State of Madhya Pradesh that they
should be paid dearness allowance at the same rate as the
Central Government employees posted in Madhya .Pradesh on
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the ground that they were doing similar work at the same
place. Their contention was, however, rejected by this
Court.
Looking at the matter thus we cannot say that the Industrial
Tribunal in refusing to extend to the employees of the
respondent in the factory in Alambazar the benefit of
dearness allowance formulated by the Bengal Chamber of
Commerce has contravened any principle of natural justice or
any important principle of industrial law. In this
connection we
(1) (1955) 1 S.C.R. 599.
41
may refer to the decision in Bengal Chemical &
Pharmaceutical Works Ltd., Calcutta v. Their Workmen (1)
where Gajendragadkar, J., who spoke for the Court observed:
"Though Article 136 is couched in widest
terms, it is necessary for this Court to
exercise its discretionary jurisdiction only
in cases where awards are made in violation of
principles of natural justice, causing
substantial and grave injustice to parties or
raises an important principle of industrial
law requiring elucidation and final decision
by this Court or discloses such other
exceptional or special circumstances which
merit the consideration of this Court."
Therefore, even assuming that an Industrial Tribunal has
exercised its discretion wrongly in not awarding uniform
dearness allowance to all the employees of the same employer
but who are working. in different establishments, that is no
ground for interference under Art. 136.
The second ground on Which the ’tribunal’s decision
regarding dearness allowance is challenged is that even at
the stage of giving evidence Mr. Was mouth, the General
Manager of the respondent said that the respondent still
sticks to the offer regarding dearness allowance but despite
’that the Tribunal did not make any change in the dearness
allowance. It is contended on the basis of this stand of
Mr. Wasmouth that the respondent accepted the position that
there was scope for raising the dearness allowance. In
answer to this argument Mr. B. Sen urged that the offer
which the company had made was a package deal but since the
appellant-union was not willing to accept the whole of the
respondents offer, the Tribunal was right in not granting
any increase in the dearness allowance. We may point out,
however, that the
(1) (1959) Supp. 2 S.C.R. 136,140.
42
only outstanding questions between the parties were two-one
relating to the dearness allowance and the other relating to
the scales of pay. A comparative chart showing the union’s
demand and the company’s offer of the existing scales of
pay, dearness allowance, superannuation, casual leave, sick
leave and over-time has been placed on record and is
annexure G.I. We are not concerned with matters other than
the first two and we, therefore, reproduce below only that
portion of the chart which relates to the first two of these
matters:
Union’s demand Company’s offer
RS. Rs.
1. Grade & A 1 35/- 118/-65/- (30yrs.) 30/- 1/4/
50--EB-1/4/- 55/-
scales of A 2 40/- 2/8/- 90/- " 35/- 1/4/-
55-EB-1/4/- 60/-
pay A 3 60/- 3/8/- 130/- " 60/- 2/0/- 80/
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B 1 65/- 5/0/- 115/-EB-7/- 55/-4/0/- 95/-
EB-5/- 125/,
185/- (20 yrs.) no offer
C 1 75/- 6/0/- 135/.EB-8/- 70/- 5/8/-125/-
EB-7/
215/- (20 yrs.) 167/-EB-195/-
C 2 95/- 8/0/-175/-BB-12/. 85/-7/81-160/-
EB-10)-
295/-(20 yrs.) 220/.EB-10/-260/-
C 3 120/- 12/0/- 240/-EB- 18/- 110/-10/-210/
EB-16/.
420/-(20 yrs.) 3061-EB-16/-370/-
C 4 Upto a limit of Rs. 650/- Upto a
limit of Rs. 500/-
43
A. As per sales office
2. Dear- Employees No offer
ness on
allo-
wance
B. Rs. Rs.
1 to 50/-basic 125% 1 to 25/- basis 125%
51 to 100 " 25% 26 to 50 " 40%
101 to 160 " 17% 51 to 150 " 30%
151 to 200 " 12% 151 to 200 " 12%
201 to 250 " 7% 201 to 250 " 7%
251 to 300 " 5% 251 to 300 " 5%
In addition 3% for In addition 3% for
every 5 pts. rise every 5 pts. rise
or fail of work- or fail of work-
ing class index ing class index
figure. figure.
Adjusting the existing
R. B. with this salb.
It will be clear from this that the union had made
alternative demands in respect of dearness allowance, one
was that the same scale as that for sales office employees
should be adopted and the other was variation in three slabs
of the present scheme accepting as the basis the working
class cost of living index figure. The company refused to
make any counter-offer with regard to the primary demand of
the appellant-union. But in regard to the alternative
demand it made a counter-offer. If we understand Mr.
Wasmouth right the respondent company stood by its counter-
offer based on the working class cost of living index
figures before the Tribunal even though the
44
conciliation proceedings broke down. During these
proceedings this counter-offer was linked with the
counteroffer pertaining to grades and scales of pay.
Presumably, therefore, the company regarded the package deal
not merely as a concession made for putting an end to
disputes but also because it regarded it as fair and the
financial commitment entailed by it to be within its means.
No doubt in the evidence Mr. Wasmouth has said that the
respondent-company does not stick to its offer relating to
grades and scales of pay. But that would not render what
was a fair and reasonable offer during the stage of
negotiations, no longer fair and reasonable or necessary.
The Tribunal has revised the pay scares on basis of the
respondent’s offer. If, therefore, dearness allowance is
revised on the basis of the respondent’s offer what would in
effect be done would be only that which the respondent
company during the conciliation proceedings had itself
offered to do, a thing which was considered to be fair and
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reasonable and also necessary. In these circumstances we
find it difficult to understand the principle on which the
Tribunal proceeded in refusing to revise the scales of
dearness allowance on the basis of the respondent-company’s
offer.
Though, therefore, we reject the contention of the
appellant-union that the dearness allowance should be fixed
on the same basis as that obtaining in the sales office we
think that in view of the stand taken by the respondent-
company throughout the proceeding& dearness allowance should
be revised in accordance with the company’s offer. The fact
that it made such an offer is indicative of two things : the
necessity and propriety of revision of the dearness
allowance as well as the ability of the respondent-company
to pay higher dearness allowance. It was no doubt contended
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before us that the offer was made during negotiations and
was without prejudice and we should therefore, keep it out
of our mind. But we cannot overlook the fact that Mr.
Wasmouth stuck to that offer even after the conciliation
proceedings had ended infructuously and thus in effect
revived the original offer.
Mr. Sen, however, argued that on the basis of the decision
in Bun & Co. Ltd., v. Their Employees (1) that an award of
industrial Tribunal cannot be reopened unless it is
established that there has been a change in the
circumstances on the award is based and that since there has
been no such change the award of’ 1955 pertaining to
dearness allowance ought not to be revised. It is true that
an award cannot ordinarily be revised unless there is a
change of circumstances. But here, there has been a change
of circumstances because cost of living has admittedly gone
up since then. This is so notorious a fact that we are
entitled to take notice of it. The object of awarding
dearness allowance is to neutralise, at least partially, the
rise in the cost of living, and in the circumstances the
factory employees are entitled to say that the old basis
needs to be revised. There is thus no substance in Mr.
Sen’s argument.
On the question of the grades and scales of pay the
contention of learned counsel is that the Tribunal has not
applied its mind to the question but ha,; mechanically
accepted the respondent’s offer. This statement is not
wholly accurate, No doubt the Tribunal has accepted as
reasonable, the offer which the respondent has made ; but it
has given reasons for doing so. In its award the Tribunal
has stated
"The principal point made in support of the
demand is that the grades and scales of pay
are too short and that they should be
(1) [1956] S,C,R. 781.
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extended with such modifications as may appear
necessary in the circumstances of the case. "
Then after comparing the existing grades with
the company’s offer the Tribunal observed:
"It would appear at a glance at this chart
that the existing rates provide for scales of
pay in the case of six grades upto 16 years
and in the case of one it provides for ten
years only. The Union’s demand is for
extending the scales upto 20 years in place of
ten and sixteen years, and both the minimum
and maximum limit of the scales of pay would
be raised in all cases. The Company’s offer
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except in the case of grade B(1) if much in
advance of the existing grades and scales of
pay. There are good justifications for
revision of the grades and scales of pay, and
the Company’s offer, in my opinion, should
have been accepted by the Union. The revision
of the grades and scales of pay as in the
Company’s offer will, to a great extent,
remove the hardships of the employees, who,
for the present, must remain satisfied with
such revision.
It has, therefore, applied its mind to the company’s offer
and also borne in mind the demand made by the union. Upon
consideration of these matters the Tribunal came to the
Conclusion that the company’s offer is a reasonable one.
Its finding in this regard is one of fact and cannot be
permitted to be challenged in an appeal under Art. 136.
In this view we allow the appeal partly and direct that the
award be modified by providing for a revision of the
dearness allowance on the basis of the company’s offer.
Subject to this modification, the appeal will, be dismissed.
In view of the partial success of the parties we make no
order as to costs.
Appeal allowed in part.
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