Full Judgment Text
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PETITIONER:
WORKMEN OF ORIENT PAPER MILLS LTD.BRAJRAJNAGAR
Vs.
RESPONDENT:
M/S. ORIENT PAPER MILLS LTD.
DATE OF JUDGMENT:
13/08/1968
BENCH:
BHARGAVA, VISHISHTHA
BENCH:
BHARGAVA, VISHISHTHA
SHELAT, J.M.
VAIDYIALINGAM, C.A.
CITATION:
1969 AIR 976 1969 SCR (1) 666
CITATOR INFO :
R 1984 SC 356 (16)
ACT:
Industrial Dispute-Minimum Wages-Industry-cum-Region
principle-Applicability when there were no comparable
industries in the same line of business-Linking of dearness
allowance element of minimum wages with price index-If
obligatory-Industrial Tribunal-Duty to decide dispute as
referred.
HEADNOTE:
An industrial dispute regarding fixation of wages and bonus,
between the respondent-paper mills and its workmen, the
appellants, was referred to the Industrial Tribunal in
October, 1962, and the reference included a dispute about
bonus payable for the years 1962-63 and 1963-64. The
Tribunal held: (1 ) that there were in the region no ’ other
concerns in the same line of business which could be
compared with the respondent but that there were three
collieries, a steel plant, a cement factory and an
aluminum company in the region which were comparable with
the resportdent, that as the minimum wage in those
industries which was about Rs. 95 was above that of the
respondent, a revision of the minimum wage in the
respondent-mills was justified. that such minimum wage
should be fixed for the price index prevailing at the time
of the award taking 100 as the basic index for the year
1939, and that on that basis, the basic wage and dearness
allowance should be Pa. 73, and that Pa. 11 was payable as
production bonus; (2) that the dearness allowance element
need not be linked to the price index, but that wage should
be fixed at the prevailing price index leaving it to the
workmen to ask for increase in minimum wage on any further
rise in price index; (3 ) that the revised wages were
payable with effect from 13th December, 1962; (4) that the
three elements of basic wage, dearness allowance, and
production bonus which make up the total minimum wage packet
of Rs. 84 (Rs. 73 + Pa. 11) should be in the proportion of
3: 3: 1, and that profit bonus was payable at three months’
basic wage. The proportion of 3:3: 1 was fixed by the
Tribunal, because, under an agreement of 1959 the management
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and workmen accepted that proportion by mutual consent. On
the basis of that agreement, the Tribunal also held that;
(5) casual workers should not be equated to permanent
workers for purpose of minimum wages, and that casual and
radii workers should not be allowed bonus on the same basis
as the permanent workers; (6) The appellants also claimed
before the Tribunal 6 months’ basic wage instead of 3
months’ basic wage, which was being paid by the
respondent, on the assumption that certain before staff were
being paid as bonus 3 months’ consolidated wage consisting
of basic wage and dearness allowance; but the Tribunal
rejected the claim.
In appeal to this Court.
HELD: (1) This Court laid down in French Motor Car Co. Ltd.
v. Its Workmen, [1963] Supp. 2 S.C.R. 16. that where there
is no concern in the same industry in the region comparable
with the concern in which wages have to be fixed, greater
emphasis should be laid on the region part of the industry-
cum-region principle. To give full effect to this rule the
Tribunal should have proceeded to fix the minimum wage in
the respondent-mills on the basis of the average minimum
wage prevailing
667
in the other industries in that region. The respondent was
not providing any amenities which should be taken into
account in fixing the minimum wage, different from the
amenities provided by those concerns in the region which
were being compared. Therefore, the Tribunal should
have fixed the minimum wage packet at Rs. 95 per mensem
which was the average wage prevailing in all those concerns
and should not have fixed the wages on an entirely different
basis. [671 F-H; 672 G-H]
(2) The Industrial, Tribunal has the discretion, in
appropriate cases, of making a direction linking the
dearness allowance element of a wage to the price index, or
to fix the wage at the prevailing price index leaving the
labour to raise a fresh demand and, if necessary, a fresh
industrial dispute for further rise in wages, in case there
is marked variation in price index and the wage fixed
becomes outdated; and therefore. the Tribunal was not
wrong in choosing the latter alternative. [674 F-G; 675 B]
Hydra (Engineers), v. The Workmen, [1969] 1 S.C.R. 156,
referred
(3) This direction’ was objected to by respondents, on the
ground that the respondent may have to pay arrears for 5 or
6 years which would be a heavy burden. But the previous
agreement of 1959 was binding only upto 12th December,
1962. So, the Tribunal was right in directing that the
revised wages should take effect from 13th December, 1962,
in view of the considerable rise in the price index and the
fact that the labour had not raised a fresh dispute for a
further revision of wages since the date of the award. [675
G-H]
(4) No error was committed by the Tribunal in the break-up
of the wages into the 3 elements of basic wage, dearness
allowance and production bonus in the proportion of 3: 3: 1.
The contention of the workmen that the proportion should be
3:1: 1: so as to increase the basic wage element and
consequently the profit bonus. was rightly rejected by the
Tribunal, because. the proportion of 3:3:1 was accepted by
mutual consent. [674 B-C]
(5) The distinction between casual workers and permanent
workers for purpose of minimum wage, and casual and badli
workers on the hand and permanent workers on the other for
purpose of bonus, was recognised by the parties themselves
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in the agreement of 1959, and therefore, the Tribunal was
right in keeping up the distinction in its award. [675 D-E;
678 B-C]
(6) The allegation that some clerical staff was receiving
what amounted to 6 months’ basic wage as bonus was
incorrect. There was some clerical staff which did not get
any dearness allowance and the bonus in their case was
worked out on the basis of their wages which was only the
basic wage. The appellants were wrong in assuming that the
wage of such clerical staff was a consolidated wage
consisting of the 2 elements of basic wage and dearness
allowance. Therefore, the appellants could not claim 3
months’ consolidated wages as bonus which would amount to 6
months’ basic wage. [677 G-H; 678 A-B]
It could not be urged by the appellants that calculation of
available. surplus for purposes of bonus should have been on
the basis of the Full Bench formula approved by this Court
in Associated Cement Companies Ltd. v. Its Workmen, [1959]
S.C.R. 925, for justifying 6 months’ basic wages as bonus,
because, that was not the basis of the claim before the
Tribunal. Further, the Tribunal was expected to decide the
dispute only as referred to it, and at the time of the
reference the accounts for the years 1962-63 and 1963-64
could not have been available, and therefore,
668
there could not possibly be a claim for higher bonus on the
basis of the application of the Full Bench Formula. [676 D-
F; 677 C-D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 390 of 1966.
Appeal by special leave from the Award, dated January 11,
13, 1964 of the Industrial Tribunal, Orissa, Cuttack in
Industrial Dispute Case No. 8 of 1962.
D.L. Sengupta, Janardan Sharma, Anil Das Chowdhury and S.K.
Nandy, for the appellants.
H.R. Gokhale, K. Gobind Das, N.C. Shah, Krishna Sen and R.
Gopalakrishnan, for the respondent.
The Judgment of the Court was delivered by
Bhargava, J. The. workmen of Orient Paper Mills Ltd.,
Brajrajnagar, have come up in this appeal by special leave
against an award of the Industrial Tribunal, Orissa. An
industrial dispute between these workmen and the management
of Orient Paper Mills Ltd. (hereinafter referred to as
"the Company") was referred by the State Government under
section 10(1) (d) of the Industrial Disputes Act
(hereinafter referred to as "the Act") for adjudication by
the Tribunal enumerating 30 different items of dispute. The
Tribunal gave its award on all the thirty items. The special
leave in this Court was sought and granted in respect of two
matters covering some of these items. The first matter
related to fixation of wages, including minimum wages, and
this was covered by items Nos. 1, 3, 4, 22 and 26 in the
Schedule attached to the Order of Reference. The second
matter in the appeal related to bonus covered by item No. 2
of that Schedule. In the course of the hearing of the
appeal, learned counsel appearing on behalf of the workmen
further gave up some of the points which were the subject-
matter of the items mentioned above, so that in this
judgment we need deal with only those points which were
argued by him in support of the appeal.
The first and the main point argued with regard to wages was
that the Tribunal, after holding that there was no identical
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industry in this region comparable with the Company, came
to. the view that there were other industries in the region
in which minimum wages were higher than the minimum wages
paid by the Company, but failed to fix the minimum wages in
the award in accordance with the minimum wages being paid in
those industries. Instead, what the Tribunal did was to
work out the minimum wages, which should be paid, on an
entirely different basis. It was also urged in the
alternative that, even in adopting the latter course, the
Tribunal committed an error inasmuch as, in making the
calculation, the Tribunal only tried to neutralise about 36
per cent of the cost of living 9n the basis of the rise in
Price Index instead
669
of permitting neutralisation to the extent of at least 90%,
which could have been done when fixing the minimum wages for
the owest, class of workmen.
The principle for fixation of minimum wages that should
ordinarily be adopted was laid down by this Court in the
case of French Motor Car Co. Limited. v. Workmen(1) where it
was held :-
"It is now well-settled that the principle of
industry-cum-region has to be applied by an
Industrial Court, when it proceeds to consider
questions like wage structure, dearness
allowance and similar conditions of
service. In applying that principle,
industrial courts have to compare wage scales
prevailing in sinular concerns in the region
with which it is dealing, and generally
speaking similar concerns would be those in
the same line of business as the concern with
respect to which the dispute is under
consideration. Further, even in the same line
of business, it would not be proper to compare
(for example) a small struggling concern with
a large flourishing concern."
The Tribunal, in giving its decision, kept this principle in
view, but came to the finding of fact that there were no
other concerns in the same line of business as the Company
in the region which could be compared with the Company. The
Tribunal found that there are only two other paper mills in
the region. They are Titaghur Paper Mill No. 3 situated at
Chaudwar, and the J.K. Paper Mills at Rayagada. The
Tribunal found that the Company is an old established
business carrying on manufacture of paper on a very large
scale. The Titaghur Paper Mill No. 3 started production
only in April, 1960, while the J.K. Paper Mills at Rayagada
started production in 1961-62. These two Paper Mills were,
therefore, both of very recent origin compared with the
Company. The strength of their labour-force and the annual
production were also very mueh lower. Even the profits
earned were much smaller. On these facts, the Tribunal held
that it would not be proper to compare the wage structure
for these Paper Mills with that of the Company. TIffs is a
finding of fact recorded by the Tribunal and nothing has
been shown by learned counsel for the Company which would
induce us to interfere with this finding of fact. In fact,
learned counsel was unable to urge that this finding of fact
suffered from any error at all. On this finding, it is
clear that the region-cure-industry principle laid down in
the ease of French Motor Car Co. Ltd. (1) could not have
been applied by the Tribunal when fixing the wages in the
Company.
(1) [1963] Supp. 2 S.C.R. 16.
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670
This Court in the same case of the French Motor Car Co. (x)
further indicated what principles should be adopted in such
a situation where there is no concern in the same industry
in the region comparable with the concern in which wages
have to be fixed. That situation was envisaged as occurring
whenever the particular concern in question happens to be
already paying the; highest wages in its particular line of
business. It was held that such a case:
"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.
It should also take care to see that such
concerns are not so disproportionately large
as to afford no proper basis for comparison."
In the light of these views which were brought to the notice
of the Tribunal, the Tribunal proceeded to consider the
minimum wages paid by three Collieries, Orient Colliery, Ibe
Colliery and Himgiri Rampur Colliery, the Rourkela Steel
Plant, the Cement Factory at Rajgangpur and the Indian
Aluminum Company, Hirakud which the Tribunal found were
situated not very far away from the place where the Company
had its factory. The Tribunal mentioned that, according
to the Coal Award, the minimum wage in the Collieries at the
then existing Price Index was Rs. 93-7-0; in the Cement
Factory Rs. 96.88; in the Steel Plant Rs. 95.00 and in the
Aluminium Company Rs. 97.84 nP. The Tribunal then also took
into account the minimum wages being paid by other Paper
Mills situated outside the region and thereafter
recorded its own decision in the following words :---
"The conclusion that flows from these figures
is that the lowest paid worker in the Paper
Mill at Brajrajnagar gets more than what is
paid as minimum wage in the other two Paper
Mills of Orissa, but it is less than what is
paid to the lowest paid worker in some of the
Paper Mills outside the State. In other
industries, which are comparatively close to
the paper industry at
(1) [1963] Supp. 2 S.C.R. 16.
671
Brajrajnagar, the minimum wage is above Rs. 90
in almost all the cases."
On the basis of this finding of fact, the Tribunal held
that, if the minimum wage in the Company is to be fixed more
on the basis of the minimum wage prevailing in other
industries in that region which, in its opinion, would be
appropriate under the circumstances of the case, then, a
revision was really necessary. We think that the criticism
of learned counsel for the workmen that the Tribunal
committed an error at this stage in merely holding that the
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facts found by it justified a revision and in not proceeding
to fix minimum wages on the basis of the other industries in
the region, is fully justified. It is to be noted that
there is no mention in the award of the Tribunal that the
Company at any stage put forward the case that the
Collieries, the Steel Plant, the Cement Factory, and the
Aluminjure Company were concerns which were not comparable
with the Company. In fact, in the course of arguments
before us, we asked learned counsel for the Company to point
out whether such a plea was taken at any stage by the
Company and whether evidence was led to show that these
concerns were not comparable with the Company. Learned
counsel had to admit that no specific plea was taken by the
Company in this behalf and at least no evidence at all was
led to show that these concerns are not comparable with the
Company. The workmen in their written statement had relied
on the wage structure in these concerns obviously on the
basis that they were comparable. Since the Company never
took the plea that they were not comparable, no occasion
arose for the workmen to give evidence of the concerns being
comparable. In fact, the Tribunal also accepted them as
being comparable ’and that is why, in its conclusion, the
Tribunal held that, in its opinion, it would be appropriate
under the circumstances of the case to fix the minimum wage
in the Company on the basis of the minimum wage prevailing
in other industries in that region. By the expression
"other industries in the region" the Tribunal was
obviously referring to these concerns. Having come to this
view, it is clear that, to give full effect to the principle
laid down by this Court the case of French Motor Car Co.(1),
the Tribunal should have proceeded to fix the minimum wage
in the Company on the basis of the average minimum wage
prevailing in these concerns. We have already quoted the
figures of the minimum wage prevailing these concerns. On
their basis, it appears to us that there will be full
justification for fixing the minimum wage in the Company at
Rs. 95 per mensum which is about the average of the wages
prevailing in all those concerns. In this connection, we
may take notice of the fact that, in the written statement
of the workmen, the minimum wages prevailing in these
concerns were
(1) [1963] Supp. 2 S.C.R. 16.
672
shown at figures lower than those mentioned by the Tribunal;
but it appears that those lower figures were given, because
the, wages mentioned in the written statement were based on
a lower Price Index. The Tribunal considered the minimum
wages in these concerns on the basis of the prevailing
Price-Index of 441 a’ Sambalpur taking 100 as the basic
Price Index for the year 1939 Even when fixing the minimum
wage ,for the Company on the basis of the alternative
calculation made by the Tribunal, the Tribunal has proceeded
on the assumption that the minimum wage is being fixed for
the Price Index No. 441 prevailing at the time of the award
taking 100 as the basic index for the year 1939 In these
circumstances, we think that the minimum wage in the Company
should have been fixed by the Tribunalmensera, following the
principle laid down by this Court in the case of French
Motor Car Co.(1). The Tribunal should not have proceeded
to make the alternative calculation on some other basis so
as to arrive at a lower figure of Rs. 73 p.m. as the wage
covering the basic wage and the dearness allowance, in
addition to Rs. 11 p.to. payable as production bonus.
Learned counsel for the Company urged before us that the
principle of fixation of wages on the basis of Comparison in
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the region laid down in the French Motor Car Co.’s case(1)
is not rigid and, it is not. necessary that the minimum
wage. in the Company must be fixed at the average level of
’wages in the other comparable industries in the region.
According to him, note should be taken of the fact that,
at least ..in the paper industry in this. area, the other
concerns are paying much lower wages. This point has to be
’rejected straightaway in view of the finding that. those
concerns are very small and not comparable with the
Company. It was also urged that, in fixing the minimum
wage, the wages payable-in the-paper industry in other.
parts of the country. should also be kept in view.- We do.
not think that such a consideration should be taken. into
account. when applying the principle of fixing the minimum
wage primarily on the basis of comparison. between.
different industries. in the same region. Finally, it was
argued that other amenities being-provided by the Company
should also be taken into account when -fixing the minimum
wage. In this case, however, there is nothing to show that
the Company is providing any such amenities which are
different from the amenities that are being provided by
those concerns in the region which. are being.compared with
the Company for the purpose of fixation of the minimum wage
Consequently, we do not think that there is any
justification for departing from the figure of Rs.95 which
is the average minimum wage payable by those industries
(1) [1963] Supp. 2 S.C.R. 16.
673
We may, at this stage, take notice of the fact that, in con-
sidering the question of minimum wage, the Tribunal had in
view the total wage packet to be received by each workman
and, in the opinion of the Tribunal, it consisted of three
elements. These elements are basic wage, dearness allowance
and production bonus. The Tribunal, in its award, held that
the minimum wage in so far as it consists of basic wage and
dearness allowance,, should be fixed at Rs. 73 and there
should be paid, in addition, production bonus to the extent
of Rs. 11 in each case. Thus, the total minimum wage
packet which a workman should be entitled to receive was
fixed by the Tribunal at Rs. 84. It is for this figure of
Rs. 84 that we think the Tribunal should have substituted
the figure of Rs. 95. From the facts noted in the Award or
appearing on the record, it appears that production bonus,
in addition to the minimum wage, is payable in the case of
Aluminium Company, Hirakud; but there does not appear to be
any, production bonus payable in the three Collieties, in
the Steel Plant and in the Cement Factory. In the majority
of the industries, which are being compared with the Company
in the region, consequently, the minimum wage is the total
wage packet receivable by the workman and there is no extra
amount received as production bonus. There is only an
exception in the case of Indian Aluminium Company. That
particular Company, it appears, has some special features
which have been brought out in the evidence of the
Management’s witness, B.B. Panda. He has stated that the
Alumihium Factory at Hirakud carries on its work with the
help of highly automatic machines and is’ supplied
electricity by the Government at subsidised rates. The
nature of work is such that the total number of workmen
employed does not exceed 125 which is a very small number as
compared’ with the number of workmen employed by the
Company. It is clear that, in the Aluminium Factory, the
number of workmen, who have to be paid production bonus is
very small and almost insignificant as compared with the
number in the Company ’In these circumstances, it would be
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more appropriate to compare the total wage packet of the
Company with the wage packet received by the workmen of
other industries in the region, viz., the three Collieries,
the Rourkela Steel Plant, and the Cement Factory at
Rajgangour. Comparing with them, there is justification for
fixing the total wage packet of the workmen in the Company
’at Rs. 95 which would include production bonus. So far as
annual profit bonus is concerned, it is payable in the
Company also as in those other concerns. Consequently, in
varying the award of the Tribunal we would direct that the
’total minimum wage packet of a workman in the Company shall
be-fixed ,at Rs. 95 consisting of’ the three elements of
basic wage; dearness allowance and production bonus.
The break-up of this wage into the three ’elements is of
some importance in this case because of the principle on
which the
674
profit bonus is paid by tiffs Company. The profit bonus
that is paid is three months’ basic wage and does not take
into account the dearness allowance and the production bonus
elements of the total wage. The Company has always treated
the total wage of a workman as consisting of these three
elements in the proportion of 3:3: 1. On behalf of the
workmen, it was urged before the Tribunal that the
proportion should be 3: 1: 1, so that the production bonus
and the dearness allowance would both be equal and 1/3rd of
the basic wage. This plea of the workmen was rejected by
the Tribunal primarily on the ground that the other break-up
urged on behalf of the Company was the break-up which had
been accepted by mutual consent between the workmen and the
Company in an earlier settlement which had been arrived at
in the year 1959. We are unable to hold that the Tribunal
committed any error in arriving at this decision and,
consequently, the total minimum wage fixed by us must also
be deemed to have the same break-up. As a result, it would
have to be held that the total minimum wage of Rs. 95 will
consist of Rs. 41 as basic wage, Rs. 41 as dearness
allowance and Rs. 13 as production bonus.
In connection with the fixation of minimum wage, one point
vehemently argued by learned counsel for the workmen was
that at least the dearness allowance element of the wage
should have been made variable with the Price Index, so that
the labour could automatically be compensated for further
rise in the cost of living subsequent to the making of the
award. Learned counsel was, however, unable to show to us
that this Court or any other Tribunal has ever laid down the
principle that, where the dearness allowance forms a part of
the consolidated wage fixed, there should be such linking so
as to bring in continuous variation of the wage, depending
on the variation in the Price Index. It appears to us
that an Industrial Tribunal has the discretion, in
appropriate cases, of making a direction linking the
dearness allowance element of a wage to the Price Index;
but, at the same time, the Tribunal is entitled to choose
the alternative course of fixing the wage at the prevailing
Price Index and leaving the labour to raise a fresh demand
and, if necessary, a fresh industrial dispute for further
rise in wages, in case there is marked variation in the
Price Index and the wage fixed in the award becomes out-
dated. Reference in this connection may be made to the
decision of this Court in Hydro (Engineers) Pvt. Ltd. v.
The Workmen,(x) where also the Court did not hold that it
was compulsory to link minimum wage with the cost of living
index and only envisaged that such linking may be
permissible by holding that :-
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"It is thus clear that the concept of minimum
wage, does take in the factor of the
prevailing cost of essen-
(1) [1969] 1 S.C.R. 156.
675
tial commodities whenever such minimum wage is
to be fixed. The idea of fixing such wage in
the light of cost of living at a particular
juncture of time and of neutralising the
rising prices of essential commodities by
linking up scales of minimum wages with the
cost of living index cannot, therefore, be
said to be alien to the concept of a minimum
wage."
In the present case, the Tribunal chose the course of
leaving it to the workmen to ask for increase in minimum
wage on any further rise in Price Index and did not consider
it advisable to link the wages with it. In fact, from the
Award, it appears that, so far as the Tribunal was
concerned, the workmen did not press for such linking when
the award was being given. Consequently, we are unable to
hold that the Tribunal has committed any error and that, in
this respect, any interference by us is called for.
The only ’other point argued before us in respect of wages
by learned counsel was that casual workers should also be
paid minimum wages on the same basis as the permanent
workers for whom the minimum wage was fixed by the Tribunal
which is being varied by us by increasing it to a total wage
packet of Rs. 95. It appears that the Tribunal did not
accept this demand primarily on the ground that the
distinction between casual workers and’ the permanent
workers was recognised by both the parties in the agreement
of 1959. It may be noticed that, by the very nature of
employment being casual, it can be presumed that a casual
worker is on a lower footing and cannot expect the same
wagesas a permanent employee. Therefore, the decision by
the Tribunal not to equate the casual workers with the
permanent employees. cannot be held to be incorrect and must
be upheld.
The Tribunal had directed that the increase of Rs. 12 p.m.
in the total minimum wage packet allowed by it will enure to
the benefit of the lowest paid female, badIi and permanent
dailyrated workers also. This principle will remain
effective with the modification that these workers will be
entitled to the increase of Rs. 23 p.m. substituted by us
for the increase of Rs. 12 allowed by the Tribunal.
Learned counsel appearing for the Company drew our attention
to the fact that the revised wages are payable with effect
from 13th December, 1962 and, by this time, a period of 5 to
6 years has elapsed, so that the Company will have to pay
arrears of wages for this long period. It was urged that
this would cast a very heavy burden on the Company. We do
not think that this reason advanced on behalf of the Company
will justify our making a direction that the increase in
wages should be effective from some later date. The
previous agreement of 1959 was binding only up to 12th
December, 1962 and we think that the Tribunal
213 Sup.C.I./68--12
676
was right in directing that the revised wages must take
effect from 13th December, 1962. Even though arrears will
have to be paid for about 6 years, it has to be kept in view
that, since then, there has been a very considerable rise in
the Price index and the labour has not so far raised a fresh
dispute for a further revision of wages over and above the
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wages fixed by the Tribunal which are being now refixed by
us. In all these circumstances, we think that the revised
wages should take effect from 13th December, 1962.
The only other dispute raised in this appeal related to the
bonus for the year 1962-63. Initially, the workmen had
challenged the decision of the Tribunal with regard to,
bonus for all five years from 1959-60 to 1963-64, but, in
the course. of arguments at the last stage before us,
learned counsel for the workmen confined his arguments to
the bonus for the year 1962-63 only. The main point urged by
learned counsel was that, in giving the decision with regard
to bonus for this year, the Tribunal committed the error of
not making calculation of surplus available on the basis of
the Full Bench Formula approved by this Court in the case of
The Associated Cement Companies Ltd., Dwarka Cement Works,
Dwarka v. Its Workmen and Another.(x) The Company is paying
profit bonus equivalent to three months’ basic wage of each
workman. The demand made by the workmen was for bonus
equivalent to six months’ wages, and the argument was that,
if the Tribunal had worked out the surplus available on the
correct basis, that surplus would have certainly justified
grant of profit bonus at the rate of six months’ wages.
This argument fails, because it appears to us that the
demand, as put forward before the Tribunal for bonus
equivalent to six months’ wages, was, in fact, never made by
the workmen on the basis that the surplus calculated under
the Full Bench Formula would justify bonus being granted at
that rate. The ’tribunal, in this connection, has quoted
the pleading of the workmen in their written statement
before it. The pleading makes it clear that the claim for
six months’ wages was not based on the Full Bench Formula,
but on the ground that certain clerical staff was being paid
bonus which, in effect, amounted to about six months’ basic
wages, because the bonus was calculated ;in their case by
taking into account the consolidated wages, including
dearness allowance, while in the case of the workmen, the
dearness allowance element of the wages was being ignored
and bonus was calculated only by taking into account basic
wages. We agree with this interpretation of the pleadings
of the workmen. Further, there is one very significant
circumstance, viz. that this dispute was raised by the
workmen ’before the expiry of the year 1962-63. Initially,
there was an attempt that the dispute be referred to the
Industrial
(1)[1959] S.C.R. 925.
677
Tribunal under s. 10(2) of the Act on the basis of an agreed
enumeration of subjects of dispute drawn up by the workmen
and the Company together. That reference under s. 10(2) of
the Act, however, failed due to some technical defect. The
reference was ultimately made by the Government under s.
10(1) of the Act, but it was made in the same form in which
the parties had agreed to. refer it. The reference was made
by the Government on the 4th October, 1962. At that time,
the year 1962-63 was still running and the accounts for that
year could not possibly have been closed and made available.
The balance-sheet and the profit and loss. account of that
year could only be prepared after the closure of the year on
31st March, 1963. In fact, the reference included a dispute
even for the year 1963-64 which year had not even started
running. On the face of it, at the time of the reference,
there could be no question of applying the Full Bench
Formula for calculation of surplus, because there were no
completed accounts for the two years 1962-63 and 1963-64.
This circumstance makes it clear that the claim for higher
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bonus could not, at the time of reference, have been based
on the availability of surplus according to the Full Bench
Formula. The Tribunal was, therefore, quite correct in not
trying to work out the surplus according to the Full Bench
Formula and in awarding bonus on that basis. In this
connection, learned counsel for the workmen urged that, at
least by the time when the Award was given, the completed
accounts for the year 1962-63 were available; but it seems
to us that this circumstance is of no assistance. The award
had to cover the year 1963-64 also and at least for that
year the accounts could not possibly have been completed, as
that year was still running when the award was given by the
Tribunal on the 11 th January, 1964. Further, the Tribunal
was expected to decide the dispute only as referred to it
and, at the time of reference at least, there was not and
there could possibly not be a claim for higher bonus on the
basis of the application of the Full Bench Formula.
The claim was, in fact, based on the circumstances that,
according to the workmen, the bonus in their case was
being calculated as equivalent to three months’ basic wages,
while, the case of some clerical staff, the calculation was
made on the basis of their consolidated wages consisting of
basic wages and dearness allowance. The argument is
incorrect. In the case of even the lowest paid clerical
staff, to whom dearness allowance is separately payable, the
bonus is only calculated on the basis of basic wages, and
the dearness allowance is ignored. There is some clerical
staff which does not get any dearness allowance at all and
it is only in those cases. that the bonus is worked out on
the basis of the total wages paid. In such cases, the
calculation is still on the basis of basic wage, because it
cannot be assumed that their wage is a consolidated wage
consisting of the two
678
elements of basic wage and dearness allowance lumped
together. In fact, the principle which is being applied is
the simple one of calculating the bonus payable at the rate
of three months’ basic wage in each case and in no case is
the dearness allowance taken into account. There is,
therefore, no discrimination or inequality as urged on
behalf of the workmen.
Finally it was urged that even the casual and badIi workers
should be allowed bonus on the same basis as the permanent
workers. The Tribunal rejected this demand on the ground
that, under the Agreement of 1959, the workmen and the
Company had agreed specifically to exclude these classes of
workers in regard to payment of bonus. We are unable to
hold that the Tribunal committed any error of law, requiring
interference by us, in basing its decision on the principle
contained in the earlier Agreement of the parties and in
holding that there was no justification to introduce a new
element of payment of bonus to casual and badIi workers at
this stage. The claim in this respect also fails.
As a result, the appeal is only partly allowed inasmuch as
the minimum wage fixed by the Tribunal in the Award is
carried as indicated by us above. The rest of the Award of
the Tribunal is upheld. Since, in this appeal, the
principal dispute related to the fixation of minimum wage of
the workmen and we are allowing the appeal of the workmen in
that respect, we direct that the workmen will be entitled
to their costs of this appeal from the Company.
V.P.S. Appeal allowed in
part.
679
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