Full Judgment Text
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PETITIONER:
WORKMEN OF THE BHARAT PETROLEUM CORPORATION LTD. (REFININGDI
Vs.
RESPONDENT:
BHARAT PETROLEUM CORPORATION LTD. AND ANOTHER
DATE OF JUDGMENT06/10/1983
BENCH:
REDDY, O. CHINNAPPA (J)
BENCH:
REDDY, O. CHINNAPPA (J)
DESAI, D.A.
VARADARAJAN, A. (J)
CITATION:
1984 AIR 356 1984 SCR (1) 251
1983 SCC (4) 470 1983 SCALE (2)736
CITATOR INFO :
R 1987 SC 51 (4,6)
D 1987 SC1527 (25,34)
ACT:
Industrial Disputes Act-Industrial dispute regarding
raising of retirement age-Different factors for determining
retirement age-Trend in a particular area-Most important
factor-Trend need not be static-Modern conditions and
general trend in favour of raising retirement age-Trend in
Bombay region in flavour of raising retirement age. For
applying industry-cum regional formula- If no comparable
industries in the region-Regional aspect to be given
precedence.
HEADNOTE:
An industrial dispute with regard to the raising of the
age of retirement of the clerical staff employed in the
Refinery Division of the respondent oil Company at Bombay
from 55 to 60 years was referred to the Industrial Tribunal.
The workmen contended that there was a trend in the Bombay
region to fix the age of retirement of clerical employees at
60 years and in the comparable concerns as well as in the
Marketing Division of the Company itself the age of the
clerical employees was above 55 years. The Company contended
that the wage scales of their clerical employees were far
better than those of similar categories of employees in
comparable concerns and that the company took a generous
view in the settlement dated 31-10-1973 and arrived at a
package deal and revised the benefits of the employees
taking into consideration the agreement of the employees to
continue the age of retirement of the clerical employees of
the Refinery Division at 55 years. Neither party led any
oral evidence but filed their respective comparative
statements. The Tribunal found as a fact that the wage
scales of the Company were not much better than the wage
scales of other comparable concerns. The Tribunal also
noticed that the age of retirement of the clerical staff of
the Company in its Marketing Division both at Bombay and
other places was fixed at 58 years. But the Tribunal found
that the Company’s contention regarding the settlement being
a package deal in regard even to the age of retirement after
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taking other benefits into consideration was not without
substance and observed that it was, however, not sufficient
to reject the workmen’s demand in toto and that it had to be
taken into account while considering the extent to which the
age of retirement should be raised. Having regard to the
circumstances of the case and in the interest of industrial
harmony, the Tribunal raised the age of retirement to 58
years only. In appeal to this Court the workmen relied on
the ’trend’ in the Bombay region while the Company relied on
the position in other oil Companies.
252
Allowing the appeal and fixing the age of retirement at
60 years, by majority.
HELD - (Per Desai and Chinnappa Reddy, JJ.)
In fixing the age of superannuation, the most important
factor that has to be taken into consideration is the trend
in a particular area. From the various decisions rendered by
this Court and by the Tribunals, it is obvious that in the
early sixties the trend in the Bombay region was to raise
the age of superannuation to 60 years. Industrial and labour
conditions do not remain stagnant despite the passage of
time. Industrial-labour relations need revision from time to
time to fit and suit changing conditions. That there was an
upward trend to raise the age of retirement to 60 in the
early sixties may not necessarily mean that the same trend
has continued till today. [259 H; 260 D-E; 260 G-H]
Guest, Keen, Willians Private Ltd. vs. P. J. Sterling &
Ors. [1960] 1 S.C.R. 348; Dunlop Rubber Company Limited v.
Workmen & Ors. [1960] 2 S.C.R. 51; Imperial Chemical
Industries (India) Pvt. Ltd. v. Workmen [1961] 2 S.C.R. 349;
British Paints (India) Ltd. v. Its workmen [1961] 2 S.C.R.
523; G.M. Talang v. Shaw Wallace & Co. [1964] 7 S.C.R. 426;
Burmah Shell Oil Storage & Distributing Company of India
Ltd. v. Their Workmen [1970] I LLJ 363, referred to.
In the instant case, the Company did not plead that
there was any reversal of the trend nor did the Company urge
that there was any such reversal of the trend. On the other
hand, it may very well be said that there has been much
progress in the last two decades in the matter of better
living conditions and availability of medical and health
facilities and, therefore, a further raise of the age of
retirement may be considered necessary and justified. [260
H; 261 A]
In the instant case while raising the retirement age of
the clerical staff of the Refinery Division to 58 years
instead of 60 years since the retirement age of the clerical
staff of the Marketing Division of the Company had been
fixed at 58 years, the Tribunal fell into a serious error in
failing to notice the relevant and outstanding fact that the
clerical staff of the Marketing Division have a pension
scheme while the clerical staff of the Refinery Division
have no such scheme. The general terminal benefits on
attaining the age of superannuation are pension, gratuity
and provident fund. It is not in dispute that while the
clerical staff of the Marketing Division have all the three
benefits, the clerical staff of the Refinery Division are
not entitled to any pension. This must necessarily have an
impact on the raising of their retirement age. On the
material available the Court thinks that the retirement age
in the case of clerical staff of the Refinery Division
should be fixed at 60 years. [262 E-H]
In applying the region-cum-industry formula the
emphasis to be placed on region or industry depends upon
varying factors. Where there are no comparable industries in
the region, the regional aspect of the region-cum-industry
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formula must be given precedence. [263 F; 265 G]
Greaves Cotton and Co. Ltd. v. Their Workmen 1964 (I)
L.L.J. 342; Workmen of Hindustan Motors v. Hindustan Motors
1962 (II) L.L.J. 352;
253
French Motor Car Company v. Their Workmen 1962 (II) L.L.J.
744; Workmen of Orient Paper Mills Ltd. v. Orient Paper
Mills Ltd. 1969 (II) L.L.J. 398 referred to:
It is observed that nowadays, because of better
conditions of living and availability of medical and health
facilities, the average span of life has increased and a
person between 55 and 60 years of age is alert, active, hale
and healthy may be said to be at the prime of his life. That
is also the time when he has to meet several financial
commitments and demands. To retire him at that age may mean
virtually throwing him to the wolves. Can the nation afford
to throw away the knowledge and experience of these people
by retiring them when they are still capable of turning out
some years of good work and have on its hand several
families unable to fully support themselves ? On the other
hand, can the nation afford to have an army of unemployed
youngmen necessarily leading bitter and frustrated lives by
allowing them to fritter away their energies in unhealthy
pursuits to which they may be tempted ? But then arises the
broader question, is the retirement of men of experience at
an age when they are still useful to the community the
proper solution to the problem of unemployment among the
young ? Is not the solution the creation of greater
employment opportunities, by increasing production and its
modes ? All these questions are difficult to answer and
require deep investigation, research and study. [261 D-H]
(Per Varadarajan, J.
Though the trend in a particular area is the most
important factor to be taken into account for fixing the age
of retirement of employees, it is only one of the several
factors like the nature of work assigned to the employees,
the wage structure of the employees, the retirement benefits
and other amenities available to the employees, the nature
of climate where the employees work and the age of
superannuation fixed in comparable industries in the region.
Moreover, the trend must undoubtedly be in comparable
industries. [272 D-E; F]
Guest Keen Williams Private Ltd. v. Sterling and Ors.
1959 (II) L.L.J. 405; Burmah Shell (Delhi region) (1971) (I)
L.L.J. 363 referred to.
In the present case, the employees have not placed any
material on those factors before the Tribunal apart from
relying upon the trend in the Bombay region. They have also
not placed any material on record to show that there is any
trend in the Refinery Division of any other oil company in
the Bombay region to fix the age of retirement of clerical
employees at 60 years. They have relied upon the trend
generally and not in any comparable industry. There is no
evidence to show that there is any other Refinery in the
Bombay region than that of the Company. From the comparative
statements filed by the Company, it appears that the trend
in the Refinery Division of the Company throughout the
country is to fix the age of retirement of the clerical
employees at 58 years. There is nothing in the award of the
Tribunal to show that the employees contended before it that
the "trend in the Bombay region" heavily relied upon by
them, could be general in nature and not in comparable
industries in the region. [272 F; G; 273 B-C]
254
Unfortunately, very limited material is available on
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record for arriving at a decision in this case. The
comparative statements filed by the Company show that the
pay scales of junior grade clerical employees in the
Refinery Division of the respondent company are better than
those in another oil company. The pay scales of junior grade
clerical employees and senior grade clerical employees of
the company in the Refinery Division at Bombay compare
favourably with pay scales of junior grade clerical
employees and senior grade clerical employees in the
Marketing Division of the Company at Bombay Therefore, in
considering the absence of a pension scheme for the clerical
employees of the Company in the Refinery Division one has to
take note of the fact that the pay scales of those employees
are more advantageous and compare favourably with the pay
scales of clerical employees of the company in the Marketing
Division at Bombay. There is no material on record to show
the quantum of disadvantage to which the employees in
question are subjected by the absence of a pension scheme
compared with the section of clerical employees of the
Company’s Marketing Division at Bombay who have the benefit
of a pension scheme in addition to gratuity and provident
fund benefits to which alone the employees concerned in this
appeal are entitled as retirement benefits. In those
circumstances, there is no satisfactory reason for
interfering with the Tribunal’s award raising the age of
retirement of the clerical employees of the Company’s
Refinery Division at Bombay from 55 years to 58 years. [270
A; 271 A; E-F; 272 B-C; 273 H; 274 A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1396 of
1982.
Appeal by Special leave from the Award dated the 26th
July, 1980 of Shri A.K. Thorat, Industrial Tribunal,
Maharashtra, Bombay passed in Reference (IT) No. 54 of 1980.
M.K. Ramamurthi, P. Gaur, Jitendra Sharma for the
Appellants.
G.B. Pai, O.C. Mathur, S. Kumaran, Ms. Meera Mathur,
D.N. Misra for the Respondents.
The following Judgments were delivered by
CHINNAPPA REDDY, J. : The workmen of the Bharat
Petroleum Corporation Limited, Bombay raised an Industrial
dispute with regard to the retirement age of the clerical
staff employed in the Refinery Division of the Bharat
Petroleum Corporation Limited at Bombay. The demand of the
workmen was that the retirement age of the clerical staff of
the Refinery Division at Bombay must be raised from 55 years
to 60 years in keeping with the ’trend’ in the Bombay
region. The Company resisted the demand on the ground that
in all similar oil companies, the retirement age of the
clerical
255
staff engaged in the Refinery Division had never been fixed
at 60 years. Before the Industrial Tribunal, Maharashtra at
Bombay to whom the dispute was referred for adjudication,
neither party led any oral evidence. The workmen relied upon
several decisions of this court to establish that the trend
of industry in Bombay was to fix the retirement age of the
clerical staff at 60 years, while the company contented
itself by filing a statement showing the age of retirement
of clerical staff employed in various oil companies. The
Industrial Tribunal found as a fact that the wage scales of
the company were not much better than the wage scales of
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other comparable concerns. The Industrial Tribunal also
noticed that the age of retirement of the clerical staff of
the company in its Marketing Division both at Bombay and
other places was fixed at 58 years. The Industrial Tribunal,
therefore, held that there was no valid reason why the
retirement age of the clerical staff employed in the
Refinery Division should not be raised at least to 58 years.
But having regard to the circumstance that the clerical
staff employed in the Refinery Division had already been
granted, under a settlement, the benefits of Provident Fund
and Gratuity and having further regard to the fact that
while the number of members of the clerical staff employed
in the Refinery Division was 148 only, there were as many as
1095 workmen in the non-clerical category, who would also
surely raise a dispute to revise their retirement age, the
Industrial Tribunal thought that in the interest of
industrial harmony, it would be proper to raise the
retirement age of the clerical staff to 58 years only and
not to 60 years. The workmen have preferred this appeal
under Art. 136 of the Constitution. As before the Industrial
Tribunal, so too before us, the workmen relied on the
’trend’ in the Bombay region while the company relied on the
position in other oil companies.
In fixing the age of retirement, several factors have
to be taken into consideration. These factors have been
explained at length in Guest, Keen, Williams Private Ltd. v.
P.J. Sterling & Ors., Dunlop Rubber Company Limited v.
Workmen & Others, Imperial Chemical Industries (India) Pvt.
Ltd. v. Workmen, British Paints (India) Ltd. v. Its Workmen,
G.M. Talang
256
v. Shaw Wallace & Co.’ and Burmah Shell Oil Storage of
Distributing Company of India Ltd. v. Their Workmen.
Guest, Keen Williams Private Ltd. v. P. J. Sterling &
Others was a case from Calcutta and it may not be useful to
discover the trend in the Bombay region. However, some of
the relevant factors to be taken into account in fixing the
age of superannuation have been stated and we may usefully
extract the observations made by the learned judges in that
case. It was said:
"In fixing the age of superannuation industrial
tribunals have to take into account several relevant
factors. What is the nature of the work assigned to the
employees in the course of their employment ? What is
the nature of the wage structure paid to them ? What
are the retirement benefits and other amenities
available to them ? What is the character of the
climate where the employees work and what is the age of
superannuation fixed in comparable industries in the
same region ? What is generally the practice prevailing
in the industry in the past in the matter of retiring
its employees ? These and other relevant facts have to
be weighed by the tribunal in every case when it is
called upon to fix an age of superannuation in an
industrial dispute."
The ’trend’ of industry in the Bombay region to raise
the age of retirement from 55 to 60 years was noticed by
this court in Dunlop Rubber Company v. Workmen & Others,
Imperial Chemical Industries (India) Pvt. Ltd. v. Workmen,
British Paints (India) Ltd. v. Its Workmen, G.M. Talang v.
Shaw Wallace & Co. and Burmah Shell Oil Storage &
Distributing Company of India Ltd. v. Their Workmen.
In the Dunlop Rubber Company case, the Tribunal noticed
that the trend in the Bombay region was to raise the age of
retirement to sixty years for clerical staff and,
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accordingly, raised the age of the clerical staff of the
company to sixty years, notwithstanding the fact that in the
previous agreement, the retirement age was
257
fixed at 55 years. The Supreme Court upheld the award as it
accorded with the prevailing conditions in many concerns in
that region. One of the submissions made to the Supreme
Court was that the clerical staff of the company employed in
Bombay was a small minority of the total clerical staff
employed by the company through out India, that in the case
of the large majority employed outside Bombay, the age of
retirement was 55 and, therefore, the retirement age of the
small minority of workmen employed in Bombay should not be
raised from 55 to 60 years. It was argued that the company
was an All-India concern and occupied a special position,
and it was, therefore, desirable and proper that no change
should be made to benefit a small minority of workmen
employed in Bombay. The submission was repelled by the
Supreme Court and it was observed:-
"There is no doubt that in the case of an all-
India concern it would be advisable to have uniform
conditions of service through out India and if uniform
conditions prevail in any such concern they should not
be lightly changed. At the same time, it cannot be
forgotten that industrial adjudication is based, in
this country at least, on what is known as industry-
cum-region basis and cases may arise where it may be
necessary in following this principle to make changes
even where the conditions of service of an all-India,
concern are uniform. Besides, however, desirable
uniformity may be in the case of all-India concerns,
the Tribunal cannot abstain from seeing that fair
conditions of service prevail in the industry with
which it is concerned. If, therefore, any scheme, which
may be uniformly in force through out India in the case
of an all-India concern, appears to be unfair and not
in accord with the prevailing conditions in such
matters, it would be the duty of the tribunal to make
changes in the scheme to make it fair and bring it into
line with the prevailing conditions in such matters,
particularly in the region in which the tribunal is
functioning irrespective of the fact that the demand is
made by only a small minority of the workmen employed
in one place out of the many where the all-India
concern carries on business."
It will be seen that great emphasis was laid on the
conditions prevailing in the region even to the extent of
overriding the conditions
258
of service of other workmen in the employment of the very
company elsewhere.
In Imperial Chemical Industries (India) Pvt. Ltd. v.
The Workmen, Gajendragadkar, J observed:
"It is generally recognised in industrial
adjudication that where an employer adopts a fair and
reasonable pension scheme that would play an important
part in fixing the age of retirement at a comparatively
earlier stage. If a retired employee can legitimately
look forward to the prospect of earning a pension then
the hardship resulting from early compulsory retirement
is considerably mitigated; that is why cases where
there is a fair and reasonable scheme of pension in
vogue would not be comparable or even relevant in
dealing with the age of retirement in a concern where
there is so much pension scheme".
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In that case it was submitted by the Attorney General who
appeared for the company that the company was an All-India
concern and it was of great importance that the terms and
conditions of service prevailing in several branches of the
company all over the country should be stable and uniform
and that in the matter of retirement the company had
uniformly fixed the age of retirement at 55 since 1950 and
this arrangement should not be disturbed because it would
inevitably upset the age of retirement in all other
branches. It was also submitted that the Tribunal had raised
the age of retirement from 55 to 58 and that the Supreme
Court should not interfere with the decision of the Tribunal
and further raised it to 60. It was also urged that the
general terms and conditions provided by the company to its
employees were very liberal and that the industrial concerns
in Bombay where the age of retirement had been fixed at 60
were not comparable to the company and, therefore, no
importance should be attached to the trend disclosed by
those companies. All these submissions were rejected by the
court on the primary consideration that the recent trend in
the Bombay area clearly appeared to be to fix the age of
retirement at 60.
In British Paints India Limited v. Its Workmen, this
court expressed the view that there had been a general
improvement in the standard of health in the country and
that longevity had increased and therefore, fixation of age
of retirement at 60 years appeared to
259
be quite reasonable in the circumstance. The court, further
observed that the age of retirement at 55 years was fixed in
the last century in Government service and had become the
pattern for fixing the age of retirement every where. The
court then said:
"But time in our opinion has now come considering
the improvement in the standard of health and increase
in longevity in this country during the last fifty
years that the age of retirement should be fixed at a
higher level, and we consider that generally speaking
in the present circumstances fixing the age of
retirement at 60 years would be fair and proper, unless
there are special circumstances justifying fixation of
a lower age of retirement".
In G.M. Talang v. Shaw Wallace & Co. reference was also
made to the report of the Second Pay Commission which had
referred to the age of retirement in 48 countries of the
world and to the report of the Norms Committee, a Committee
on which both employers and employees of the Bombay region
were represented, which had said:-
"After taking into consideration the views of the
earlier Committees and Commissions including these of
the Second Pay Commissions the report of which has been
released recently, we feel that the retirement age for
workmen, in all industries, should be fixed at 60
years. Accordingly the norm for retirement age is fixed
at 60".
The comment of the court on the report of the Norms
Committee was:-
"This considered opinion of a Committee on which
both employers and employees were represented
emphasised the fact that in the Bombay region, at least
there is a general agreement that the age of retirement
should be fixed at 60."
In the Burmah Shell Oil Company case, this court
observed.-
"In fixing the age of superannuation the most
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important factor that has to be taken into
consideration is the trend in a particular area. That
position is made clear by this court in Talang (G M )
and Others v. Shaw Wallace & Co. Ltd. There is no
denying the fact
260
that life expectation has greatly increased in recent
years due to healthier living conditions, better food
and improved medical facilities though we have still a
long way to go in that regard. Under modern conditions,
speaking generally, the efficiency of workmen is not
impaired till about 60 years. The needs of a workman
are likely to be greater between the age of 50 to 60
years as during that period he has to educate his
children, marry his daughters, in addition to
maintaining his family. If one looks at the word trend
it is obvious that the age of superannuation is
gradually pushed
up.....................................................
.... ................As we said earlier, in the matter
of fixing the age of superannuation, the trend in a
particular area is the most important factor, though in
the matter of determining the other conditions of
service of workmen, the principle of region-cum-
industry is by and large the determinative
factor.................................................
...."From the various decisions rendered by this court
and by the tribunals, it is obvious that the trend is
to raise the age of superannuation. It is also clear
from those decisions that so far as Bombay, Calcutta
and Delhi areas are concerned, the trend appears to
raise the age of superannuation to 60 years."
On the facts of the case, however, the court noticing that
in the appellant company, there was a fair pension scheme
for the clerical staff, fixed the age of superannuation in
their case at 58 years, while leaving untouched the decision
of the Tribunal fixing the retirement age of other workmen
at 60 years.
It is to be noticed that the four cases which related
to the Bombay region were all of the early sixties. Two
decades have passed, Industrial and labour conditions do not
remain stagnant despite the passage of time. Industrial-
labour relations need revision from time to time to fit and
suit changing conditions. That there was an upward trend to
raise the age of retirement to sixty in the early sixties
may not necessarily mean that the same trend has continued
till today. But, in the present case, the company did not
plead that there was any reversal of the trend nor did Shri
G.B. Pai, learned counsel for the company, urge before us
that there was any such reversal of the trend. On the other
hand, it may very well be said
261
that there has been much progress in the last two decades in
the matter of better living conditions and availability of
medical and health facilities and, therefore, a further
raise of the age of retirement may be considered necessary
and justified. Shri Pai rightly did not urge before us that
there was any reversal of the trend in the Bombay region and
we are, therefore spared from going into that question.
In the Dunlop Rubber Company Case and in the Imperial
Chemical Industries Case, the Supreme Court primarily relied
on the trend in the region and in the Burmah Shell oil
Company case, the Court observed that the trend in a
particular area was the most important factor in the matter
of fixing the age of superannuation. Another factor which
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appears to be receiving importance in certain circles is the
rising rate of unemployment amongst the younger generation.
The effect of increasing or decreasing the age of retirement
on the rate of unemployment in the younger generation and on
the household economics of the older generation is a matter
for deep study and investigation. There is no evidence
before us on these points. Nowadays, as pointed out in the
Burmah Shell oil Company’s case and other cases, because of
better conditions of living and availability of medical and
health facilities, the average span of life has increased
and a person between 55 and 60 years of age is alert,
active, hale and healthy and may be said to be at the prime
of his life. That is also the time when he has to meet
several financial commitments and demands. To retire him at
that age may mean virtually to throw him to the wolves. Can
the nation afford to have on its hand several families
unable to fully support themselves ? Can the nation afford
to throw away the knowledge and experience of these people
by retiring them when they are still capable of turning out
some years of good work ? On the other hand, can the nation
afford to have an army of unemployed, youngmen, necessarily
leading bitter and frustrated lives ? Can the nation afford
to allow them to fritter away their energies in unhealthy
pursuits to which they may be tempted ? But then arises the
broader question, is the retirement of men of experience at
an age when they are still useful to the community the
proper solution to the problem of unemployment among the
young ? Is it not an unimaginative solution ? Is not the
solution the creation of greater employment opportunities,
by increasing production and its modes ? All these are
questions which are difficult to answer though everyone has
an opinion, often ad hoc. These questions require deep
investigation, research and study. We cannot properly answer
them nor is there any evidence on these points. The counsel,
we must say in fairness, refrained
262
from arguing that the retirement age should not be raised
because of the rising rate of unemployment and we also
refrain from expressing any opinion. The workmen were
content to rely on the undoubted trend as revealed by the
decisions of this court and the company was content to rely
on the comparative statement of retirement age of clerical
staff in other oil companies. We are compelled to decide
this case on the limited material available to us and we,
therefore, confine the decision to the facts of the case.
The Tribunal noticed that the age of retirement of the
clerical staff of the company in its Marketing Division was
58 years and observed:-
"Similarly, it is apparent that the company has
fixed the age of retirement of the clerical staff in
its Marketing Division, both in Bombay and other places
at 58 years. I do not find any valid reason while the
concerned workmen should be denied a raise in the age
of their retirement at least to the extent of 58
years."
So according to the Tribunal, the retirement age of the
clerical staff of the Refinery Division had to be increased
at least to 58 years, since the retirement age of the
clerical staff of the Marketing Division of the Company had
been fixed at years. The relevant and outstanding fact which
the Tribunal failed to notice here was that the clerical
staff of the Marketing Division have a pension scheme while
the clerical staff of the Refinery Division have no such
scheme. The general terminal benefits on attaining the age
of superannuation are pension, gratuity and provident fund.
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It is not in dispute that while the clerical staff of the
Marketing Division have all three terminal benefits, the
clerical staff of the Refinery Division are not entitled to
any pension. This must necessarily have an impact on the
raising of their retirement age. Therefore, without
travelling outside the very company, we think that the
Industrial Tribunal fell into a serious error in failing to
notice that there was no pension scheme in the case of
clerical staff of the Refinery Division while there was such
a scheme in the case of a clerical staff of the Marketing
Division. On the material available to us, we think that the
retirement age in the case of clerical staff of the Division
should be fixed at 60 years.
Shri G.B. Pai, learned counsel for the Respondent-
Corporation drew our attention to the circumstances that the
new scales of pay
263
of the clerical staff of the Refinery Division of the
Respondent-Corporation compared favourably with the scales
of pay of the clerical staff of other refineries elsewhere
in Indian and were higher than the scales of pay of the
clerical staff of the Marketing Division of the Respondent-
Corporation itself. Shri Pai, however would not go so far as
to say that the scales of pay were so designed taking into
account the provision for pensionary benefits or the lack of
it. He could not do so for the obvious reason that it would
be an irrelevant consideration unless he could assert that
the wage structure took into account the ’capacity for
savings’ factor. Again, obviously, he could not so assert as
that was never the company’s case and also in view of the
rising universal inflationary trend of which we are bound to
take judicial notice. The differing nature and conditions of
work may well be the reason for the different scales of pay.
We assume nothing and so we make no comment one way or the
other in the absence of evidence. It is enough for the
present purpose to say that the Tribunal did not base its
conclusion on this circumstance.
Shri Pai invited our attention to the circumstance that
in other refineries elsewhere in India, the retirement age
of clerical staff has generally been fixed at 58. But we are
primarily concerned with the trend in the Bombay region. In
matters of this nature, greater importance must naturally be
given to the regional factor That was why in the Dunlop
case, emphasis was laid on the "prevailing conditions,
particularly in the region", in the Imperial Chemical
Industries case, the trend in the Bombay region was
considered the most vital factor and in the Burmah Shell
case, it was stressed that in fixing the age of
superannuation, the most important factor that had to be
taken into consideration was the trend in the particular
area. We may add here that in applying the region-cum-
industry formula, the emphasis to be placed on region or
industry depends upon varying factors. In Greaves Cotton and
Co. Ltd. v. Their workmen, this Court observed that where
the number of industries of the same kind in a particular
region was small, it was the regin aspect of the industry-
cum-region formula which assumed importance particularly in
the case of clerical and subordinate staff. Reference was
made to Workmen of Hindustan Motors v. Hindustan Motors and
French Motor Car Company v. their Workmen and it was said:
264
"Where there are a large number of industrial
concerns of the same kind in the same region, it would
be proper to put greater emphasis on the industry part
of the industry-cum-region principle as that would put
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all concerns on a more or less equal footing in the
matter of production costs and therefore, in the matter
of competition in the market and this will equally
apply to clerical and subordinate staff whose wages and
dearness allowance also go into calculation of
production costs. But where the number of comparable
concerns is small in a particular region and therefore,
the competition aspect is not of the same importance,
the region part of the industry cum-region formula
assumes greater importance particularly with reference
to clerical and subordinate staff and this was what was
emphasised in the French Motor Car Company case where
the company was already paying the highest wages in the
particular line of business and therefore comparison
had to be made with as similar concerns as possible in
different lines of business for the purpose of fixing
wage scales and dearness allowance. The principle
therefore which emerges from these two decisions in
that in applying the industry-cum-region formula for
fixing wage scales the tribunal should lay stress on
the industry part of formula if there are a large
number of concerns in the same region carrying on the
same industry; in such a case in order that production
cost may not be unequal and there may be equal
competition, wages should generally be fixed on the
basis of the comparable industries, namely, industries
of the same kind. But where the number of industries of
the same kind in a particular region is small, it is
the region part of the industry-cum-region formula
which assumes importance particularly in the case of
clerical and subordinate staff, for as pointed out in
the French Motor Car Company case there is not much
difference in the work of this class of employees in
different industries."
In French Motor Car Co. v. Their workmen, an argument
was advanced that the appellant company was paying the
highest wage scales in a particular line of business in
which it was engaged and there was, therefore, no
justification for increasing the wage scales
265
by comparison with wage scales in other lines of business.
This argument was rejected with the following observations:-
"We are of opinion that this argument cannot be
accepted, for it would then mean that if a concern is
paying the highest wages in a particular line of
business, there can be no increase in wages in that
concern whatever may be the economic conditions
prevailing at the time of dispute. It seems to us,
therefore, that where a concern is paying the highest
wages in a particular line of business, there should be
greater emphasis on the region part of the industry-
cum-region principle, though it would be the duty of
the industrial court to see that for purposes of
comparison such other industries in the region are
taken into account as are as nearly similar to the
concern before it as possible. Though, therefore, in a
case where a particular concern is already paying the
highest wages in its own line of business, the
industrial courts would be justified in looking at
wages paid in that region in other lines of business,
it should take care to see that the concerns from other
lines of business taken into account are such as are as
nearly similar as possible, to the line of business
carried on by the concern before it."
In Workmen of Orient Paper Mills Ltd. v. Orient Paper
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Mills Ltd, this Court relying on the French Motor Car
Company case held that where two other paper industries in
the region are of recent origin and their profits were
smaller, it was the duty of the Industrial Tribunal not to
compare the appellant-company with those companies, but to
compare the same with other industries in the region, three
of which were collieries, two cement companies, on a steel
plant and one aluminium factory.
These decisions make it clear that where there are no
comparable industries in the region, the regional aspect of
the region-cum-industry formula must be given precedence.
That was what was done in the Dunlop Rubber Co., the
Imperial Chemical Industries and the Burmah Shell oil Co.
cases. Rightly, therefore, the Tribunal did not rest its
conclusion on this factor.
266
Shri Pai informed us that even in the case of the
clerical staff of the Marketing Division, there is no longer
any pension scheme for those that have joined the
Corporation after nationalisation. This again was not one of
the grounds on which the Tribunal rested its conclusion and
we wish to say no more about it, as we do not want to
jeopardise any claim that the workmen may have on that basis
or any answer that the Management may have in that regard.
In the result the appeal is allowed and the retirement
age of the clerical staff of the Refinery Division of the
company is fixed at 60 years, There will be no order as to
costs.
VARADARAJAN, J. This appeal by special leave is
directed against the award dated 1.7.1980 made by the
Industrial Tribunal, Bombay in I. T. No. 84 of 1980 raising
the age of retirement of the clerical employees of the
Refineries Division of the respondent from 55 years to 58
years in so far as it rejected the claim of the appellants
to the age of retirement being raised to 60 years.
The dispute referred to the Industrial Tribunal, Bombay
was between the Bharat Petroleum Corporation Limited, Bombay
(for short "Company") and their Workmen represented by the
Burmah Shell Refineries Clerical Staff Union (for short
"first union") and the Petroleum Workmen’s Union (for short
"second union"). The Company has a marketing division and a
refinery division at Bombay. The age of retirement of the
clerical employees of the Company is 58 years in the
marketing division and 55 years in the refinery division.
The question for consideration by the Tribunal was whether
the age of retirement of the clerical employees of the
Company’s refinery division should be raised to 60 years
from 55 years. The retirement age of the clerical employees
of the refinery division had been fixed at 55 years by a
settlement dated 31.10.1973 which was to be in force for a
period of four years and thereafter until it is terminated
in accordance with the provisions of s.19(2) of a the
Industrial Disputes Act, 1947. The period of four years
fixed in that settlement expired on 31.10.1977 and the first
union terminated that settlement in so far as it related to
the age of retirement of the clerical employees of the
refinery division by a notice dated 6.4.1979 after making a
demand by a notice dated 15.1.1979 on the Company to raise
the age of retirement of these clerical employees to 60
years. The first union’s contention according to its claim
statement was that the model standing orders provide for the
age of retirement of the clerical employees being 60 years
and there is a
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trend in the Bombay region to fix the age of retirement of
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clerical employees at 60 years and in the comparable
concerns as well as in the marketing division of the Company
itself the age of retirement of the clerical employees is
above 55 years and, therefore, the present age of retirement
of the clerical employees of the refinery division is low
and should be raised from 55 years to 60 years with effect
from the date of the reference. The second union put forward
almost similar grounds in its claim statement filed in
support of the demand of the clerical employees of the
refinery division.
The Company denied in its statement of defence that the
model standing orders framed by the Central Government
provide for the age of retirement being 60 years and
contended that the settlement dated 31.10.1973 was a package
deal arrived at in consideration of the union agreeing inter
alia to the age of retirement being fixed at 55 years and
the Company revised certain benefits which would not have
been revised otherwise. The Company disputed the correctness
of the grounds relied upon by the unions in support of their
claim for raising the age of retirement of the clerical
employees of the refinery division to 60 years.
The Tribunal rejected the Company’s contention that the
reference itself is not competent in view of the said
settlement dated 31.10.1973 as being untenable. That
question is not in dispute in this appeal.
The parties filed a joint statement before the Tribunal
saying that they do not want to let in any oral evidence.
The Company and the first union produced their respective
comparative statements. In addition to the comparative
statement, strong reliance was placed by the unions on what
is called the trend in the Bombay region to fix the age of
retirement at 60 years. The Company’s comparative statement
showed that on 1.4.1980 there were 148 clerical employees
and 1095 non-clerical employees in the Company and provided
information in regard to wage scales and other benefits such
as provident fund and gratuity and admitted that the age of
retirement of the clerical employees in the Company’s
marketing division at Bombay is 58 years while that of the
clerical employees of the Company’s refinery division at
that place is only 55 years. It was contended for the
Company before the Tribunal that the wage scales of the
clerical employees covered by this reference are far better
than those of similar categories of employees in comparable
268
concerns and that the Company took a generous view in the
settlement dated 31.10.1973 and arrived at a package deal
and revised the benefits of the employees taking into
consideration the agreement of the employees to continue the
age of retirement of the clerical employees of the refinery
division at 55 years. The Tribunal found that the contention
regarding the settlement being a package deal in regard even
to the age of retirement after taking other benefits into
consideration was not without substance and observed that it
is, however, not sufficient to reject the demand of the
clerical employees of the refinery division for raising the
age of retirement in toto and that it has to be taken into
account while considering the extent to which the age of
retirement should be raised.
The following observation made by this Court in Guest
Keen Williams Private Ltd. v. Sterling and others was
noticed by the Tribunal:
"In fixing the age of superannuation the
Industrial Tribunals have to take into account several
relevant factor. What is the nature of the work
assigned to the employees in the course of their
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employment ? What is the nature of the wage structure
paid to them ? What are the retirement benefits and
other amenities available to them ? What is the
character of the climate where the employees work and
what is the age of superannuation fixed in comparable
industries in the same region ? What is generally the
practice prevailing in the industry in the past in the
matter of retiring its employees ? These and other
relevant facts have to be weighed by the tribunal in
every case, when it is called upon to fix an age of
superannuation in an industrial dispute."
The Tribunal noticed also the following observation
made in a later decision of this Court in the case of Burmah
Shell (Delhi Region):
"In fixing the age of superannuation the most
important factor that has to be taken into
consideration is the trend in a particular area. That
position is made
269
clear by this Court. There is no denying the fact that
life expectation has greatly increased in recent years
due to healthier living conditions, better food and
improved medical facilities though we have still a long
way to go in that regard. Under modern conditions,
speaking generally, the efficiency of workmen is not
impaired till about 60 years. The needs of a workman
are likely to be greater between the age of 50 and 60
years, as during that period, he has to educate his
children, marry his daughters, in addition to
maintaining his family. If one looks at the word trend,
it is obvious that the age of superannuation is
gradually pushed up."
The Tribunal commented upon the lack of evidence
relating to the various factors indicated in the above
passage in the present case and has arrived at its decision
as follows:
"The only material placed before me pertains to
the wage scales in existence in the industries in the
region and more so comparable industries. The wage
scales of the Company and those of other comparable
concerns do not show that the wage scales of the
Company are much better. Similarly, it is apparent that
the Company has fixed the age of retirement of the
clerical staff in its Marketing Division, both in
Bombay and other places 58 years. I do not find any
valid reason why the concerned workmen should be denied
a raise in the age of their retirement at least to the
extent of 58 years. I have already observed that the
concerned workmen have been granted benefits of
retirement by way of provident fund and gratuity under
the Settlement. It is also to be borne in mind that
there are about 1095 workmen in the non-clerical
category. They may also raise a dispute about the
revision of their retirement age. Here, neither party
has placed on the record the extent of additional
financial burden consequent upon the grant of the
demand in terms it is made. To keep harmony amongst the
workmen of the Company employed in its Marketing
Division and Refinery, it is proper to raise the age of
retirement of the concerned workmen to 58 years, and
not to 60 years in terms of the demand. For the
aforesaid reasons, the age of retirement of the
clerical staff is fixed at 58 years."
270
Unfortunately, very limited material is available on
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record for arriving at a decision in this case. Before the
Tribunal comparative statements regarding the wage scales
and other benefits such as gratuity and provident fund and
age of retirement were produced by the Company and the first
union and the unions relied upon the trend in the Bombay
region to fix the age of retirement of employees at 60
years. In this Court Mr. M.K. Ramamurthi, Senior Counsel
appearing for the appellants invited this Court’s attention
to and heavily relied upon some decisions of this Court in
which that trend has been noticed. The Tribunal also noticed
the decision of this Court in the Burmah Shell (Delhi
region’s) case (supra) in which also reference has been made
to the trend as seen from the passage in that judgment
extracted earlier. . Mr. G.B. Pai, Senior Counsel appearing
for the Company admitted before this Court as had been done
even before the Tribunal that there is no pension scheme for
the clerical employees of the refinery division of the
Company with whom we are concerned in this case. He also
admitted that there is a pension scheme in regard to
clerical employees of the Company’s marketing division at
Bombay. But he submitted that scheme is restricted to only
employees who had joined service before the date of
nationalisation of the oil companies and does not relate to
those who joined service after that date. The fact that the
pension scheme relating to the marketing division applies to
only employees who had joined service in the Company before
the date of nationalisation is not disputed by Mr.
Ramamurthi. It is true that the Tribunal has not noticed the
fact that there is such a pension scheme for some of the
Company’s employees in the marketing division at Bombay. Mr.
Pai drew this Court’s attention to comparative statements
produced by the Company as exhibits ’A’ and ’B’ with the
counter-affidavit filed in the special leave petition in
this Court. They are referred to in paras 15 and 17 of that
counter-affidavit. No objection was raised by Mr Ramamurthi
to Mr. Pai drawing this Court’s attention to those
comparative statements. One of those statements shows the
salaries of junior and senior clerical employees in all the
oil companies (corporations) in this country. It is seen
from that statement that there are four oil companies in
this country, namely, Hindustan Petroleum Corporation
Limited.(Caltex), Indian Oil Corporation Limited, Hindustan
Petroleum Corporation Limited and Bharat Petroleum
Corporation Limited. The pay scales of junior clerical
employees of the Hindustan Petroleum Corporation Limited are
Rs. 890.50-Rs. 1498.50 in the marketing division and Rs.
995.25- Rs. 1348.60 in the refinery division. Those scales
compare favourably with the pay scales of similar employees
271
in the Hindustan Petroleum Corporation Limited (Caltex) and
Indian oil Corporation Limited. But the pay scales of junior
grade clerical employees of the respondent company Bharat
Petroleum Corporation Limited are better in the refinery
division with which we are concerned in this appeal then
those in the Hindustan Petroleum Corporation Limited, for
the pay scales in the respondent Company are Rs. 924.23-Rs.
1597.17 in the marketing division as on 1.3.1980 and Rs.
1093.92-Rs. 1809.96 in the refinery division at Bombay as on
1.4.1980. In the comparative statement there is a note that
the grade of Rs.1093.92-Rs. 1809.96 is the lowest grade in
the clerical cadre as per the subsisting settlement and that
individuals have, however, not yet been fitted that grade
because of various disputes. There can be no doubt that once
the individuals are fitted in that grade they will be
entitled to payment according to that scale as from
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1.4.1980. So far as senior grade clerical employees are
concerned the scales of pay are Rs. 1012.50-Rs.1727.50 in
the marketing division and Rs.1359.56- Rs. 2040.20 in the
refinery division of the Hindustan petroleum Corporation
Limited and Rs. 1215 - Rs. 220 in the marketing division and
Rs. 1212 .(for those who joined service after 8.8.1978- Rs.
2126 (for those who joined service prior to 8.8.1978). These
scales of pay compare favourably with the scales of pay in
the Indian oil Corporation Limited. But the sales of pay of
the respondent company are much better as they are Rs.
1171.91-Rs. 1960.59 in the marketing division as on 1.3.1980
and Rs. 1352.30 -Rs. 2510.46 in the refinery division at
Bombay has on 1.4.1980. Thus it is seen that the pay scales
of junior grade clerical employees and senior grade clerical
employees of the Company in the refinery division at Bombay,
namely, Rs. 1093.92 Rs. 1809.96 as on 1.3.1980 and Rs.
1352.30-Rs. 2510.46 as on 1.4.1980 compare favourably with
the pay scales of junior grade clerical employees in the
marketing division of the Company at Bombay, namely, Rs.
924.23-Rs. 1597.17 and Rs. 1171.91-Rs. 1960.59 as on
1.3.1980 respectively. Therefore, the Company’s contention
before the Tribunal that higher pay scales were fixed for
the clerical employees in the refinery division at Bombay in
the settlement dated 31.10.1973 in view of their agreement
to continue the age of retirement at 55 years is not without
substance as stated by the Tribunal in its judgment. In this
Court also Mr. Pai submitted that higher pay scales have
been fixed for the clerical employees in the refinery
division of the Company at Bombay taking into consideration
that there is no pension scheme for them and their agreement
to continue the age of retirement as 58 whereas the
retirement age for the clerical employees of the marketing
division at Bombay for
272
whom there is a pension scheme in regard to those who
entered service prior to the date of nationalisation is 58.
The learned counsel fairly conceded that it could not be
stated with certainty that the difference in the pay scales
of the clerical employees in the refinery division and
marketing division at Bombay fully takes care of the absence
of a pension scheme for the clerical employees of the
refinery division. It was not contended by Mr. Ramamurthi
that the workload of the clerical employees in the refinery
division is greater than that of the clerical employees in
the marketing division of the Company at Bombay. Therefore,
in considering the absence of a pension scheme for the
clerical employees of the Company in the refinery division
one has to take note of the fact that the pay scales of
those employees are more advantageous and compare favourably
with the pay scales of clerical employees of the Company in
the marketing division at Bombay.
The trend strongly relied upon by Mr. Ramamurthi has no
doubt to be taken into account for fixing the age of
retirement of the employees. But according to the decision
in Burmah shell (Delhi region) case (supra) referred to
above, it is only one of the factors which have to be taken
into account in fixing the age of retirement though in that
decision it has been stated to be the most important factor,
(Several other factors) are mentioned in this Court’s
judgment in Guest Keen Williams Private Limited v. Sterling
and others (supra) and they are the nature of work assigned
to the employees, the wage structure of the employees, the
retirement benefit and other amenities available to the
employees, the nature of climate where the employees work
and the age of superannuation fixed in comparable industries
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in the region. The employees in this case should have placed
the other materials also before the Tribunal for justifying
their claim for raising the age of retirement from 55 years
to 60 years. They have not placed any of those factors
before the Tribunal apart from relying upon the trend
mentioned above. The trend must, undoubtedly, be in
comparable industries. The employees in this case have not
placed any material on record to show that there is any
trend in the refinery division of any other oil company in
the Bombay region to fix the age of retirement of clerical
employees at 60 years. They have relied upon the trend
generally and not in any comparable industry. There is no
evidence to show that there is any other refinery in the
Bombay region than that of the company. On the other hand,
the Company has placed before this Court a comparative
statement regarding the age of retirement of clerical
employees in all the refineries in this country. That
statement produced with
273
the counter-affidavit filed in the Special Leave Petition
shows that the age of retirement is 60 years only in the
marketing division of the Indian oil Corporation Limited,
that it is 58 years in the refinery division of that
Corporation and that in all the other Corporations including
the respondent Company after the age of retirement was
raised to 58 years from 55 years by the Tribunal it is 58
years both in the marketing division and the refinery
division. Thus, the trend in the refinery divisions of the
Corporation throughout the country is to fix the age of
retirement of the clerical employees at 58 years. It is not
possible to accept the appellants’ contention that the age
of retirement should have been raised by the Tribunal to 60
years on the basis solely of the "trend in the Bombay
region". There is nothing in the award of the Tribunal to
show that the employees contended before it that the "trend
in the Bombay region" heavily relied upon by them, could be
general in nature and not in comparable industries in the
region.’ No such argument was advanced even in this Court by
Mr. Ramamurthi, on behalf of the appellants. Consequently
the Company did not have any opportunity of meeting any such
contention that the trend in the region need not be in
comparable industries (not necessarily similar industries)
but may be general and is yet binding on the Company. It is
significant to note that the clerical employees in the
marketing division of the Company at Bombay have till now
not raised any demand for raising their age of retirement to
60 years from 58 years. Therefore, on the question of trend
also it is seen that the employees concerned have not placed
any material on record to hold that in their case the trend
should be taken as being towards fixing the age of
retirement at 60 years. The Tribunal has taken all factors
into consideration including the absence of a pension scheme
for the employees in question except the fact that there is
a pension scheme for the clerical employees in the marketing
division of the Company at Bombay who had joined service
prior to the date of nationalisation in raising the age of
retirement of the Company’s clerical employees in the
refinery division at Bombay to 58 years from 55 years at par
with the age of retirement of the clerical employees in the
Company’s marketing division at Bombay. Even under the
Tribunal’s award challenged in this appeal the employees
concerned are better placed than their counter-parts in the
marketing division who have joined service after the date of
nationalisation of oil companies in regard to wage scales.
There is no material on record to show the quantum of
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disadvantage to which the employees in question are
subjected by the absence of a pension scheme compared with
the section of clerical employees of the Company’s marketing
division at Bombay
274
who have the benefit of a pension scheme in addition to
gratuity and provident fund benefits to which alone the
employees concerned in this appeal are entitled as
retirement benefits. In these circumstances, there is no
satisfactory reason for interfering with the Tribunal’s
award raising the age of retirement of the clerical
employees of the Company’s refinery division at Bombay from
55 years to 58 years at par with the age of retirement of
the clerical employees of the Company’s marketing division
at Bombay and declining to raise it to 60 years as demanded
by the employees. The appeal accordingly fails and is
dismissed but without costs.
H.S.K. Appeal allowed.
275