Full Judgment Text
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PETITIONER:
H.M.T. LIMITEDWORMEN OF INDIAN TELEPHONE INDUSTRIES LTD. AND
Vs.
RESPONDENT:
H.M.T. HEAD OFFICE EMPLOYEES’ ASSO. AND ORS.THE MANAGEMENT O
DATE OF JUDGMENT: 29/10/1996
BENCH:
J.S. VERMA, B.N. KIRPAL
ACT:
HEADNOTE:
JUDGMENT:
[With C.A. Nos. 1723, 1724, 1725, 1726/90]
&
CIVIL APPEAL NO. 13380 OF 1996
[Arising Out of S.L.P.(C) No. 5345 of 1990]
J U D G M E N T
KIRPAL, J.
Leave granted.
The award of the National Industrial Tribunal, Bombay
(hereinafter referred to as’ the Tribunal’) adjudicating on
the demands of the unions of five Bangalore based public
sector undertakings for parity in minimum wage with the
minimum wage payable to the employees of another public
sector undertaking namely; Bharat Heavy Electricals Limited
(hereinafter referred to as ’BHEL’) is challenged by the
managements as well as the workmen in these appeals.
The minimum wage of the lowest cagetory of workmen of
five Bangalore based public sector undertakings namely;
Bharat Electronics Limited (hereinafter referred to as
’B.E.L.’), Bharat Earth Movers Limited (hereinafter referred
to as ’B.E.M.L.’), Indian Telephone Industries Limited
(hereinafter referred to as ’I.T.I. ’), Hindustan
Aeronautics Limited (hereinafter referred to as ’H.A.L.’)
and Hindustan Machine Tools Limited (hereinafter referred
to as ’H.M.T.’) was the same in all these public sector
undertakings. By settlements entered into on various dates
in 1974 between the managements and the workmen of these
five undertakings except I.T.I., the minimum wage of the
lowest category of workmen was fixed at Rs. 300/- consisting
of basic pay of Rs. 200/- + Dearness Allowance of Rs. 100/-
which was linked with Local Consumer Price Index. The
minimum wage in I.T.I. was also fixed at Rs. 300/-. As
dearness allowance was linked with All India Consumer Price
Index, on the basis of the Index prevailing as on 1,12.1973,
the Dearness Allowance payable on the basic wage of Rs.
200/- came to Rs. 91/- and, hence in order to bring
uniformity in the minimum wage, the employees of the I.T.I.
were paid City Compensatory Allowance (hereinafter referred
to as ’C.C.A.’) of Rs. 9/- at 4 1/2 % of the basic pay. The
settlements in these five undertakings were to be in force
till 31.12.1976.
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In BHEL, with whom parity was being claimed by the
workmen of these five industries, an agreement dated
17/18.9.73 had been entered into whereby the minimum wage
was fixed at Rs. 258.70/- comprising of basic pay of Rs,
200/- and Dearness Allowance of Rs. 58/- at the All India
Consumer Price Index of 200 points for industrial workers
with 1960 base. A revision was effected by agreement dated
17/18.1.1974 and the minimum wage of the workers of BHEL was
fixed at Rs. 300/-. This minimum wage, and the wage
structure constructed on this basis, came into force with
effect from 1.9.1973 and was to be in force for a period of
four years. This agreement expired at the end of August 1977
and negotiations for the review and revision of the same
w.e.f. 1.9.1977 were commenced between the management and
the workers in March, 1978. A final agreement between the
management and the workers was reached on 8/9-1-1980. By
this agreement, the wages as on 1.1-1978 for an unskilled
employee in BHEL at the lowest level as fixed at Rs. 500/-
per month at All India Consumer Price Index of 327 points.
This agreement was to be effective from 1.1.1978 and was
implemented in April, 1980 .
The 1974 settlements between the managements of B.E.L.,
I.T.I., H.A.L., and B.E.M.L. expired on 31.12.1976 and hence
the workmen unions submitted charters of demands in early
part of 1977. Conciliation proceedings were held between the
managements of five public sector undertakings and their
workmen and amicable settlements were arrived at between the
parties on 25.5.1978. Term number 1 of these settlements was
uniform and is as follows:
"The Union agrees to accept the
offer of the management with regard
to pay scales, quantum of Dearness
Allowance and Fitment benefits and
method of fixation of pay in the
revised pay scales as detailed in
Annexure-1. This, however is
without prejudice to the Union’s
right to take up the issues of
revision of minimum wages and the
enhancement of the rate of
neutralisation of Dearness
Allowance beyond Rs. 1.30 per point
with the Government of India and if
the Government of India agrees to
the improvement in the minimum
wages or the Dearness Allowance
neutralisation rate the management
agrees to make necessary
modification to the minimum wages
and Dearness Allowance
neutralisation rata and
consequential adjustment in the
wage structure in consultation with
the Unions."
The said settlements dated 25.5.1978 did not settle all
the demands of the workmen. Conciliation proceedings
continued which, therefore, resulted in different memorandum
of settlements which were entered into in case of H.A.L. on
30.8.1978, in B.E.M.L. on 31.8.1978, in I.T.I. on 1.9.1978,
in H.M.T. on 2.9.1978 and in B.E.L. on 3.9.1978.
These settlements contained different, though somewhat
similar, terms with regard to revision of wages. In the
settlement of B.E.L., term Nos. 1.0 and 1.1. were as
follows:
"1.0 This agreement is without
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prejudice to the Union’s right to
take up the issues of revision of
minimum wages and the enhancement
of the rate of neutralisation of
Dearness Allowance at Rs. 1.30 per
point rise/fall in the local CPI,
with the Government and if the
Government of India agrees to
improve the minimum wage or the
neutralisation rate beyond Rs. 1.30
per point, the Management agrees to
make necessary modifications to the
minimum wage, D.A. neutralisation
rate and consequential adjustments
in the wage structure in
consultation with the Unions.
1.1 If the minimum wages,
comprising of pay and Dearness
Allowance, or if the rate of
neutralisation of Dearness
Allowance is altered to a higher
rate than agreed to in this
settlement in any other Engineering
Central Public Sector Undertaking
such as BHEL, H.M.T. etc., the
Management agrees to make necessary
modifications in the relevant
clauses and consequential
adjustments, in consultation with
the Unions."
Similar terms were incorporated in the settlements in
the cases of B.E.M.L. and H.A.L.. In the cases of I.T.I. and
H.M.T., however, there was no term similar to 1.0 or 1.1 of
the B.E.L. settlement but the above- mentioned term 1 of the
settlement dated 25.5.78 was reiterated in the preamble of
their settlements. At the time when these settlements took
place in 1978, negotiations were taking place between the
managements and the workers of BHEL which had not resulted
in a final settlement. It is for this reason that in the
aforesaid clause 1.1 reference was made to the settlement
which might take place between the management and the
workers of BHEL and which could result in certain
modifications being made in the relevant clauses of the
settlement.
After the settlement was arrived at between the
management and the workers of BHEL on 8/9.1.80 which had
resulted in the revision of wage at the lowest level of an
unskilled employee to Rs. 500/- P.M. w.e.f. 1.9.78, the
unions representing the workmen in the five Bangalore based
public sector undertakins raised the question of revision of
minimum wage in these industries as per the minimum wage as
settled in BHEL. A joint action forum (hereinafter referred
to as ’JAF’) of the unions of five public sector
undertakings at Bangalore and Kolar Gold Fields (which was a
unit of BHEL) was formed. On 12.9.1980, this JAF formulated
a common proposal for submission to the management and
accordingly, the negotiating unions submitted common demands
to the respective undertakings in the matter of revision of
wages. These demands primarily related to the claim for
addition of Rs. 30 to the existing scales of pay.
The aforesaid demands received no response whereupon
the negotiating unions gave notices to the respective
managements of their decision to go on indefinite strike any
day after 10.12.1980. Conciliation proceedings between the
managements and the unions then commenced and the strike was
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postponed to 26.12.1980 on which date the workmen of all the
five undertakings struck work after they rejected an offer
which had been made by the managements just before the
commencement of the strike. After the commencement of
strike, conciliation proceedings again started on
27.12.1980. On 5.2.1981, when no agreement could be arrived
at, the conciliation officer submitted his failure report.
The strike in the H.M.T. watch factory was called off
on 6.3.1981 and thereafter the J.A.F. took a general
decision on 12.3.1981 to withdraw the strike. The strike
was, accordingly, withdrawn on 14/15/16.3.1981 and the
workers resumed work on subsequent dates. No negotiations
for settlement of the demands commenced and thereupon, a
decision was taken by J.A.F. to laun h an indefinite hunger
strike which commenced on 29.4.1981 and continued till
10.5.1981. The managements of B.E.L., B.E.M.L., I.T.I. and
H.A.L. declared a lock out in all their units located at
Bangalore w.e.f. 6.5.1981 on the ground that the strike
had in fact not been withdrawn and that the workers
Continued the strike and they also carried out violent
activities inside the factory. Lock out was also declared at
Kolar Gold Fields for the same reason W.e.f. 8.5.1981.
Thereafter, fresh conciliation proceedings were commenced
and the lock out was lifted w.e.f 2/3.6.81 and a settlement
dated 9.6.1981 was arrived at between the managements and
the unions. The terms of settlement in the cases of all the
five Bangalore based public sector undertakings were
identically worded and these terms of settlement were as
under:
(i) The wage settlements dated 3rd
and 4th September, 1978 which are
to expire of 30.6.1981 are extended
upto 31.12.1982.
(ii) The workmen on the rolls of
the company as on the date of this
settlement will be paid a lump sum
of Rs. 700/- (Rupees Seven Hundred
only).
(iii) With effect from 1.1.1981,
for the period they are entitled to
wages, they would also be paid an
ad-hoc allowance of Rs. 25/- per
month. This amount will count as
pay for all purposes except for pay
fixation.
(iv All other terms and conditions
relating to pay, allowances and
other monetary benefits in terms of
the settlements dated 3rd September
and 4th September, 1978 will
continue for the extended period of
the settlement.
(v) The Union assures the
Management that they will assist in
the maintenance of discipline,
improving productivity and ensuring
smooth production in the factory."
Even after the aforesaid settlement dated 9.6.1981, the
workmen continued to press for wage parity of the minimum
wage with BHEL w.e.f. 1.1.1978 on the ground that the
settlement of 9.6.1981 did not settle the demands made by
the unions on 12.9.1980. On writ Petitions being filed by
the unions against B.E.L., I.T.I., B.A.L and B.E.M.L., the
Karnataka High Court vide its decision dated 9.8.1982
directed the Government of Karnataka to make a reference of
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the industrial dispute to the appropriate tribunal under
Section 10 of the Industrial Disputes Act, 1947 (hereinafter
referred to as ’the Act’). This reference was accordingly,
made to the State Industrial Tribunal by order dated
23.4.1983. Two questions were referred to the said Tribunal;
one was in respect of parity with employees of the BHEL and
the second was about the illegality of strike and the lock
out. It appears that the Governments or West Bengal and
Maharashtra had also made similar references to the
respective State Tribunals. Faced with this situation, where
references had been made to the tribunals in three different
states, the managements approached the Central Government
and thereupon reference was made to the National Industrial
Tribunal by the Central Government on 10/30.5.1984. To this
reference the unions of five Bangalore based public sector
undertakings, which were situated outside Bangalore. were
not made parties and a writ petition was filed in the
Karnataka High Court, which by order dated 20.2.1985,
directed the Central Government to consider the question of
including the State unions in the said reference.
Accordingly, by order dated 3.5.1985 reference in respect of
all the units, all regional and sales offices of five
undertakings was mads. The terms of the reference were as
follows:
"Are the workmen justified in
demanding revision of wages
bringing their wages on par with
BHEL in view of the relevant
clauses in the 1973 settlement?
2. If so, what should be the
quantum and the period for which
such quantum is to be paid in view
of the BHEL settlement subsisting
till the end of August, 1982?
3. Are the workmen of Hindustan
Machine Tools Ltd., Bangalore, (ii)
Bharat Earth Movers Ltd., Bangalore
and Kolar Gold Fields,
(iii) Indian Telephone Industries,
Bangalore
(iv) Bharat Electronics Ltd.,
Bangalore and
(v) Hindustan Aeronautics Ltd.,
Bangalore justified in going on
strike w.e.f. 26.12 1980? If so, to
what relief are the workmen
entitled?
4. Are the managements of (i)
Hindustan Machine Tools Ltd.,
Bangalore; (ii) Bharat Earth Movers
Ltd., Bangalore and Kolar Gold
Fields, (iii) Indian Telephone
Industries Bangalore, (iv) Bharat
Electronics Ltd., Bangalore and (v)
Hindustan Aeronautics Ltd.,
Bangalore justified in declaring
lock outs of their establishments
with effect from 8/9.5.81 to
4.6.1981 at Kolar Gold Fields and
7.5.1981 to 2/3.6.1981 at
Bangalore? If not, are the workmen
entitled to wages for the lock out
period or to any other relief?"
In the common statement of claim filed by the unions,
it was contended that the workmen were justified in
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demanding that wages and wage structure be revised so as to
bring the minimum wages on par with that obtaining in BHEL.
It was a contention of the unions that the relevant clause
in 1978 settlement gave liberty to the workmen to raise the
question of wage revision as and when there was a final
settlement in BHEL or as and when the Government of India
communicated a change of attitute in the matter of wage
fixation. The unions contended that in view of the
settlement dated 8/9.1.1980 in BHEL, the relative difference
in the minimum wage of the unskilled workmen in BHEL and the
workmen in the units of H.A.L., B.E.L., B.E.M.L., and at
Kolar Gold Fields was as follows:
BHEL BEL BEML HAL
Basic wage Rs. 335.00 Rs. 305.00
Dearness Allowance Rs. 165.00 Rs. 125.00
House Rent Allowance Rs. 39.00 Rs. 35.00
City Compensa- Rs. 15.60 Rs. -
tory Allowance
----------------------------------
Rs. 554.60 Rs. 465.00
----------------------------------
In addition in BHEL settlement
there was provision for giving one
more increment in revised scale to
311 workmen on the roll of the
company on the date of the
settlement.
With regard to quantum of increase of wages, the
unions’ claim was as follows:
"1. The existing scale of pay
should be restructured by adding
Rs. 30.00 at the minimum and at all
stages in each scales.
2.(a) The irreduciable minimum D.A.
for KGF as on 1.9.1978 should be
revised to Rs. 133 as against Rs.
128/-.
(b) For the purpose of computation
of variable D.A. All India Consumer
Price Index figures should be
adopted instead of local consumer
price index.
3. For the existing employees,
basic pay should be fixed in the
following manne:
(a) Add Rs. 30.00
(b) Add one increament.
(c) Add one more increament in
lieu of ’next higher state’ (to
avoid anomalies’. and to provide
for consequential adjustments
benefits.
4. City Compensatory Allowance
should be paid at the rate of 6% of
the basic wages.
5. The fitment benefit which is
not extented to the employees
joining after the date of agreement
should be extended to them"
The managements in their reply refuted the said
demands. The main contention, in this regard, was that when
the demand had been raised for revision of pay after the
settlement in BHEL had been arrived at, then the disputes
had been settled with the payment of ad-hoc amount of Rs.
700/- and an additional ad-hoc payment of Rs. 25/- p.m. from
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1.1.1981 and, therefore, the question of wage parity with
BHEL did not survive any longer. It was also contended that
the strike of the workmen was unjustified and illegal and,
therefore, the workmen were not entitled to any wages during
the strike period. The further contention on behalf of the
managements was that even after the strike had been called
off, the workers had resorted to various acts of
intimidations go-slow, beating up of the willing workers who
had attended factory during the strike period and the
workmen also resorted to other forms of indiscipline
including destroying of company property thereby making it
impossible to run the factory under normal conditions. In
substance the strike conditions were continued from inside
the factory which culminated in very serious violent
activities which led to the declaration of lock-out. The
said lock-out, it was submitted, was justified and legal
and, therefore, the workers were not entitled to wages for
the period during which the lock-out subsisted.
The Tribunal gave its award on 10.11.1989. While it did
not separately deal with the issues which had been framed,
it considered the contentions of the rival parties. In
brief, the conclusions arrived at by the Tribunal were as
follows:
(a) The scope of reference in
respect of parity with BHEL was
only with regard to minimum wage
payable to the unskilled workmen of
the lowest category and, there was
no reference for revising the pay-
scales during the operation of the
earlier settlements.
(b) The relevant clause of the
settlement of 1978 had given a
right to the employees to ask for
parity with BHEL in respect of
minimum wage for the lowest
category and, therefore, there was
no reason why there should not be
any parity during the period
covered by the settlement of 1978.
(c) The workmen were entitled to
the minimum wage of Rs. 500/- p.m.
w.e.f. 1.9.1978.
(d) The settlement dated 15.6.1981
did not operate at par to the
present reference on the question
of parity with BHEL because the
settlement dated 15.6.1981,
although signed in the course of
conciliation proceedings under
Section 12(3) of the Industrial
Disputes Act, 1947, was without
prejudice to the contentions of the
employees to give parity in respect
of minimum wage for the lowest
category of BHEL. By the settlement
of 15.6.1981, only an interim
arrangement had been arrived at and
the payments were thereunder
described by the Tribunal as ad-hoc
payments, could not be adjusted
towards the minimum wage of Rs.
500/- p.m.
(e) Although, the strike commenced
by the employees in all the five
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Bangalore Based public sector
undertakings were illegal but the
Tribunal held that this strike was
justified as the Union of India did
not agree to the demand of the
employees with parity in respect of
minimum wage of lowest category
with BHEL.
(f) The lock out declared by the
managements of the companies,
except in the case of HMT where no
lock was declared, was justified.
(g) The employees of the companies
at Bangalore should be paid 35% of
the wages for the strike and lock-
out periods.
The aforesaid Award of the Tribunal has been challenged
by the managements of the five undertakings and the unions.
The undertakings filed special leave petitions impugning
that part of the decision of the Tribunal which had awarded
a minimum wage of Rs. 500/- p.m. and had also not allowed
the adjustment of Rs. 25/- p.m. even though the minimum wage
was fixed at Rs. 530/- p.m. Further more, the challenge was
also to the award of 35% of the wages to the workmen during
the strike and lock out periods.
Special Leave was granted by this Court on 2.4.1990
limited to the three questions which were;
1) Payment of 35% wages for the
period of strike;
2) Payment for the period of lock
out; and
3) set-off of Rs. 25/- p.m.
claimed by the management, which
was disallowed by the Tribunal.
The grievance of the workmen, which led to the filing
of these appeals by special leave, was on three counts:
i) That there had been inadequate increase of wages
at higher grades;
ii) The Tribunal had ordered discontinuance of C.C.A
with regard to the employees of Indian Telephone
Industry;
iii) 100% wages for strike and lock-cut period should
have been awarded.
It was contended by Mr. Narayan B. Shetye, learned
counsel on behalf of the managements, that the Tribunal
having come to the conclusion that the strike was illegal,
could not have awarded any wages in respect of the strike
period. Similarly, as the Tribunal had held that the lock
out was justified, it then could not have awarded 35% of the
wages for this period to the workmen. Mr. Jitendra Sharma,
learned counsel for respondents, however contended that the
strike was not illegal and in any event, as the said strike
had been called off, no lock out could have been declared.
In the alternative, it was submitted that for the period of
lock out, which should have been declared to be illegal, the
workmen were entitled to full wages.
On the basis of the evidence which was led before the
Tribunal it held, as already noted, that the lock-out was
justified because the demand of the workmen, which had been
raised in terms of the settlement of 1978. had not been
agreed to by the Government. The strike was, however, held
to be illegal because I.T.I., H.A.L. and H.M.T. were
declared to be public utility services and no notice as
contemplated by Section 22(a) of the Act had been given.
After taking note of the fact that conciliation proceedings
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between the managments and the workmen were going on when
the strike commenced, the Tribunal concluded as follows;
"The strike in the public utility
services and in other undertakings
was illegal because it was
commenced during the pendency of
the conciliation proceedings before
the Conciliation Officer. As
mentioned above, at about the same
time when the strike notices were
given conciliation proceedings in
respect of the demands of the
workmen were commenced and had not
come to an end when the strike was
actually commenced on 26.12.1980.
Admittedly, by that time the
conciliation officer had not made
any failure report. The strike in
the public utility services viz.
ITI, HAL and HMT Hyderabad was thus
in contravention of clause (d) of
sub-section (1) of Section 22,
while the strike in the other
undertakings contravened sub-
section (a) of Section 23 of the
Industrial Disputes Act, 1947.
There is also substance in the
contention urged on behalf of the
managements that the strike was
illegal also because it was in
contravenetion of sub-section (c)
of Section 23. The strike was not
only for breach and non-
implementation of some of the
clauses in the 1978 settlements but
it was in respect of all the
demands made by the workmen by the
notice hated 12.3.1980 and some of
these demands were in respect of
matters covered by the 1978
settlements which were in force".
Mr. Jitendra Sharma, learned counsel for the workmen,
has not been able to persuade us to hold that the aforesaid
conclusion arrived at by the Tribuanl with regard to
illegality of the strike is in any way incorrect. It is
quite obvious from the facts on record that the workmen had
resorted to illegal strike. Without going into the question
as to whether the strike was justified or not, and even
assuming that the Tribunal was right in coming to the
conclusion that the workmen were justified in going on
strike, the question as to whether the workmen would be
entitled to get any wages during the period of illegal
strike is no longer res integra.
A Constitution Bench of this Court in Syndicate Bank
Vs. K. Umesh Nayak, (1994) 5 SCC 572 has held that the
workmen would be entitled to wages for the strike period if
the strike was both legal and justified. In other words, if
the strike was only legal and not justified or if the strike
was illegal and justified, the workers were not entitled to
wages for the strike period. It was observed that "Whether
the strike was legal or illegal and justified or
unjustified, were issues which fell for decision within the
exclusive domain of the industrial adjudicator under the Act
and it was not primarily for the High Court to give its
findings on the said issues. The said issues had to be
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decided by taking the necessary evidence on the subject".
In view of the aforesaid decision and inasmuch as the
strike in the present case in all the five undertakings at
Bangalore has been held to be illegal, therefore, no wages
for the strike period could have been awarded in favour of
the workers.
As regards lock out is concerned, even if it is assumed
that here was non-compliance with the provisions of Section
22 of the Act at the time when the lock out was declared,
the conclusion of the Tribunal that the lock out, in the
instant case, was legal is not incorrect. From the facts
which have been stated hereinabove, and as found by the
Tribunal, it is clear that the provisions of Section 24(3)
of the Act are attracted to the present case. The workmen
had gone on illegal strike and even when the strike was
officially called off, they continued to disrupt the
working of the factories while being within the factory
premises. The Tribunal held that:
"The managements have placed on
record sufficient evidence to
substantiate their contentions that
even though the strike was formally
withdrawn and the workmen reported
for duty, the workmen continued
their agitational disruptive and
violent activities from within and
thus in fact continued their
illegal strike".
In view of this, the Tribunal rightly held that the
declaration of lock out must, therefore, be regarded as
being in consequence of illegal strike and, therefore, the
lock out would not be deemed to be illegal even if the
provisions of Section 22 of the Act were not complied with
by the managements. This being so and applying the ratio of
the Constitution Bench decision in SYNDICATE BANK (Supra),
the workmen would not be entitled to any wages in respect of
the period of lock out. The award of the Tribuanl to this
extent is, therefore, liable to be set-aside.
It was submitted by Mr. Shetye that the Tribunal having
increased the minimum wage to Rs. 500/- it ought not to have
directed that the payment of Rs. 25/- p.m. may not be set-
off. It was contended that by increasing the wages to Rs.
500/- p.m. and also allowing the workmen to retain Rs. 25/-
p.m. w.e.f. 1.9.1978, the effect would be that the wages of
these workmen would be note than the wages of the lowest
rank of workmen in BHEL. As this contention relates to the
construction and effect of the settlement dated 9.6.1981, it
would be appropriate, at this stage, to also consider the
contention of Mr. Sharma on behalf of the workmen to the
effect that the Tribunal ought to have revised the lowest
scale and bring it at par with BHEL’s scale of pay and
thereafter, it should have revised the higher scales as
well. This submission was based on the premise that the
settlement of 1978 allowed the workmen to ask for revision
of pay scale consequent on a settlement taking place in the
case of any other public sector undertaking such as BHEL.
When the settlement in BHEL had taken place in January,
1980, the workmen of these five public sector undertakings
were entitled to contend and demand that their pay-structure
should be revised so as to bring them at par with the
revised scales of pay which were in existence in BHEL and
that the settlement dated 9.6.1981 was without prejudice to
this right and could not preclude the workers from demanding
the said parity.
In the case of HMT and ITI, the clause relating to
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revision of pay was the one which was incorporated in the
settlement dated 25.5.1978. Term No. 1 in the agreement
dated 25.5.1978 does not postulate revision of pay scales in
the event of higher wages being paid to the employees of
BHEL or employees of any other public sector undertaking.
This clause gives to union only a right to take up the issue
regarding the minimum wages and enhancement of rate of
neutralisation of dearness allowance with the Government of
India if the Government agreed to the improvement in the
minimum wages or the dearness allowance neutralisation rate.
At best this clause only gives a right to the union to make
a reference to the Government of India for revision of
minimum wages but does not give any vested right of
enhancement of wages or pay scales in the event of their
being a revision in any other public sector undertaking. In
the case of three other public sector undertakings namely;
BEL BEML and HAL an additional clause in the settlement was
inserted . In BAL the clause was 1.1. In BEML, the clause
was as follows:
"If any comparable engineering
industry in the Central Public
Sector such as BHEL etc., revises
the minimum pay and D.A. as well as
the D.A. neutralisation rate beyond
what is agreed to in this
settlement, the issues will be
negotiated bilaterally and
consequential adjustment made in
the wage structure".
In the case of HAL, the clause was
as follows:
"If a higher minimum wage or higher
rate of neutralisation of CPI is
agreed to in any comparable
engineering industry such as BHEL
in the Central Public Sector, the
management agrees to review the
corresponding provisions in this
settlement and make consequent
adjustment in the wage structure in
consultation with the Union".
The cause in BEML contemplated bilateral negotiations
in case of revision taking place in the minimum pay of BHEL.
In clause 1.1 of BEL, the management agreed to make
necessary modifications in consultation with the union and
in the case of HAL the management agreed to review the
provisions of the settlement consequent on a higher rate
being paid in BHEL. The latter three settlements no doubt
make a reference to a revision of pay scales in case of
revision of pay in BHEL but no such reference is contained
in the settlements of HMT and ITI. The unions of these five
public sector undertakings were taking a joint action. They
raised the demand for the revision of wages after the
settlement of BHEL had arrived at in June, 1980. The demands
were raised by the joint action front on 12.9.1980 and the
same were in the following terms:
"1. The existing scales of pay
should be restructured by adding
Rs. 30/- at the minimum and at all
stages in each case.
2. The irreducible minimum D.A.
for Bangalore as on 1.9.1978 should
be revised to Rs. 130/- as against
Rs. 125/-.
3. For the existing employees,
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basic pay should be refixed in the
following manner:
(a) Add Rs. 30/-
(b) Add one increment.
(c) Add one more increment in lieu
of next higher stage (to avoid
anomalies) and to provide for
consequential adjustment benefits.
4. City Compensatory Allowance
should be paid at the rate of 6%
(in all places).
5. The Fitment Benefit which is
not extended to the employees
joining after the date of agreement
should be extended to them.
6. The arrears on account of the
above should be worked and paid
with effect from 1.1.1979".
The settlement of 9.6.1981 specifically dealt with the
claim of the revision of scale demanded by the workers. The
demand was for a revision at the rate of Rs. 30/- p.m.
w.e.f. 1.9.1978. In view of this, in the settlement dated
9.6.1981 it was agreed between the workmen and the
managements that all the workers on the pay rolls of the
companies as on 9.6.1781 would be paid a lump sum of Rs.
700/-. This clause contained a benefit which was more than
what the unions were asking for. The demand of the unions
was for payment at the rate of Rs. 30/- w.e.f. 1.1.1979
which would have meant that the employees who had worked for
a longer period would have got more than those who had
joined the service later. Clause (ii) of the settlement
dated 9.6.1981 gave a lump sum payment of Rs. 700/- to all
the employees irrespective of the length of the service who
were on the rolls of the Companies as on 9.6.1981.
Calculated at the rate of Rs. 25/- p.m., this sum of Rs.
700/- would amount to payment in respect of 28 months i.e.
w.e.f. 1.9.1978 to 31.12.1980. From 1.1.1981, the workmen
were given an ad-hoc allowance of Rs. 25/- p.m. It is thus
evident that the claim which was raised by the unions in
their letter of demand dated 12.9.1980 relating to revision
of pay scale stood concluded by the settlement of 9.6.1981.
The demand of the union was more or less conceded inasmuch
as Rs. 25/- p.m. were agreed to be paid w.e.f. 1.1.1981
instead of an addtional Rs. 30/- p.m..
It was submitted by Shri Sharma that the terms of the
settlement dated 9.6.1981 specifically mentioned that this
was "without prejudice to the contentions of either party"
an expression which is used in the preamble of the said
settlement. This settlement dated 9.6.1981 in our opinion
has to be read as a whole. It has to be read in the
background of the demand which was raised by the unions in
their letter dated 12.9.1980. The main claim of additional
amount of Rs. 30 P.M. at the minimum and at all stages in
each case, as demanded by the workmen clearly stood settled
with a lump sum payment of Rs. 700/- and ad-hoc allowance of
Rs. 25/ w.e.f. 1.1.1981 as agreed to in the settlement of
9.6.1981. The use of words "without prejudice to the
contentions of either party" can refer to only such other
points or aspects which were not specifically covered by the
terms of settlement which were arrived at on 9.6.1981.
The settlement of 1978 was with regard to pay scales,
allowance and other monetary benefits. The settlement of
9.6.1981 brought about a change whereby a sum of Rs. 95/-
was given w.e.f. 1.1.1981 in addition to lump sum payment of
Rs. 700/-. Clause (iv) of the settlement dated 9.6.1981
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stated in no uncertain terms that all other conditions
relating to pay allowances and other monetary benefits were
to "continue for the extended period of the settlement" i.e.
up to 31.12.1982. This would clearly show that the original
settlement of 1973 with regard to pay-scales as well as
allowances and other monetary benefits were to continue upto
31.12.1982 subject to the increase of Rs. 25/- p.m. plus
lump sum payment of Rs. 700/-. This settlement of 9.6.1981
was arrived at during the conciliation proceedings and,
therefore, was binding on the parties under Section 18(3)
read with Section 19(2) of the Act. The term of settlement
dated 9.6.1981 did not contemplate that the payment of Rs.
25/- p.m. w.e.f. 1.1.198 as liable to be adjusted in any
manner. It is no doubt true that the Tribunal by the
impugned award has increased the minimum, wage to Rs. 50
p.m. because the Tribunal came to the conclusion that the
settlement dated 9.6.1981 did not preclude the workmen from
asking for a revision in the minimum wage consequent on the
minimum wage consequent on the settlement having been
arrived at in the case of BHEL. This conclusion of the
Tribunal, in our opinion, was incorrect but as leave had not
been granted to the management on this point, the decision
of the Tribunal reviewing the minimum wage at the lowest
rank of Rs.500/- p.m. as contemplated by the settlement, is
payable to all the workers in different scales of pay and
the settlement does not contemplate the said amount being
adjusted in any manner. This being so the contention of Mr.
Shetye for adjustment of this amount cannot be accepted.
The last question which remains for consideration is
with regard to city compensatory allowance to the workmen of
I.T.I.. It is not in dispute that prior to the impugned
award, C.C.A. @4% was being paid to the workmen of I.T.I..
By the impugned award the Tribunal increased the minimum
wage to Rs. 500/- p.m, in respect of BEL, BEML, H.A.L and
H.M.T.. The break up of this amount was basic pay of Rs.
335/- + irreducible D.A. of Rs- 129.90 + variable D.A. of
Rs. 35.10, It was stated in the Award that in respect of
these four companies, the variable D.A. shall be at the
local consumer price index prevailing as on 1.19.1978 at
different units, with quarterly adjustments at the rate or
1.39 per point or rise or fall in the local indices. It is
not disputed that in the existing wage structure, city
compensatory allowance was not being paid to the workmen of
above-mentioned four companies because the local consumer
price index used to be higher than the All India Consumer
Price Index. In view of this difference in the price
indices, C.C.A. was being paid to the employees of I.T.I.
whose rise and fall in dearness allowance was controlled by
the All India Consumer Price Index. The Tribunal while
directing that city compensatory allowance will not be paid
to the I.T.I. employees because it is not paid to the
employees of other public sector undertakings at Bangalore,
overlooked the fact that the local consumer price index was
admittedly always higher than All India Consumer Price
Index. It is for this reason that the city compensatory
allowance was being paid to the employees of I.T.I. Mr.
Shetye frankly conceded that if city compensatory allowance
is not paid to the employees of I.T.I. then over a period of
time, the salary of workmen of I.T.I. would be less than be
salary of the workmen of other companies because the
variable dearness allowance of employees of B.E.L, B.E.M.L
and H.M.T. will increase at a higher rate than the variable
dearness allowance of I.T.I. employees which is linked with
the rise or fall in All India Consumer Price Index. In our
opinion, therefore, the direction of the Tribunal dispensing
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with the payment of city compensatory allowance to I.T.I.
employees was uncalled for.
From the aforesaid discussion, we conclude that the
workmen would not be entitled to receive any wages during
the period of illegal strike and lock out; the payment of
Rs. 25/- as a result of settlement dated 9.6.1981 is not
adjustable and the direction of the Tribunal not to allow
demand of city compensatory allowance to the workmen of
I.T.I. was not correct. The Award of the Tribunal directing
payment of 35% of the wages during the period of illegal
strike and lock out and the decision with regard to non-
payment of city compensatory allowance to I.T.I. is
accordingly, modified to that extent. The appeals are
disposed of in the aforesaid terms. Parties to bear their
own costs.