Kamani Metals & Alloys Ltd. Vs.
Their Workmen  INSC 18 (24 January 1967)
24/01/1967 HIDAYATULLAH, M.
CITATION: 1967 AIR 1175 1967 SCR (2) 463
RF 1969 SC 360 (22,23) R 1972 SC2332 (118) F
1973 SC2758 (6,7) R 1974 SC 136 (10) E 1974 SC 526 (12) R 1978 SC1113 (26) R
1980 SC 31 (8) RF 1986 SC1794 (7)
Industrial Dispute-Criteria for revision of
wages and dearness allowance--What are comparable concerns-Departure from point
to point adjustment when permissible-Award--Interference by Supreme Court in
appealRetrospective operation of award--Legality of-Reference to the Tribunal,
with respect to special categories of employees-When Tribunal can fix new
scales for all employees.
The award of the Industrial Tribunal in an
industrial dispute between the appellant-company (manufacturing products of
non-ferrous metals and alloys) and its workmen, was challenged in appeal to
this Court on the following grounds:(1) There was no change of circumstances
justifying a revision of Wages, pay scales and dearness allowance, (2) while
making such revision by its award, many of the matters stated in the judgment
of this Court in Novex Dry Cleaners v. Its Workmen,  1 L.L.J. 271 (S.C)
were not considered by the Tribunal;' (3) the Tribunal 'had com.
pared dissimilar concerns and not compared
similar ones; (4) the Tribunal took into account an irrelevant factor, namely,
the yield from incentive bonus; (51 no case was made out for adjustment of the
workmen in the new time-scale after granting them one additional increment
after every 3 years service and two additional increments, after 5 years'
service (6) the Tribunal was in error in making the award retrospective from
1st October 1962, when the reference was made to it only on 14th December 1962;
(7) the Tribunal had gone beyond the reference inasmuch as the reference was in
-respect of special categories of monthly-rated employees by designation,
whereas the Tribunal had fixed the new scales of pay not only for those workmen
but for all clerical and other workmen who were classified as Grades A, B, C,
and (8) the linking of dearness allowance,
after the consumer price index 321, to wages, has made a departure from the
fixation of dearness allowance fixed in another concern, where the percentage
was that of the dearness allowance and not of the basic salary.
HELD : In an appeal brought by special leave
against the award, before a party can claim redress, it must be shown that the
award was defective by reason of an excess of jurisdiction, or of a substantial
error in applying the law or some settled principle, or of some gross and
palpable error occasioning substantial injustice. [471 A-C] (1) There was no
revision of wages or dearness allowance in the last 20 years,, even though
commodity prices level of wages -had gone up, and there had in some industries,
while in some revise or fix wages. There a revision was justified. [466 F-14]
(2) In order to make the fair wage meet the increase in the cost of living
dearness allowance is paid to make up the disparity to a certain extent. When,
in course of time, it is found that it is not sufficient, because of a further
increase in the cost of living, a revision of wages and dearness allowance
becomes necessary. This Court in its decisions has merely laid down the
principal guide-lines to be followed in industrial adjudication. The various
observations are not intended to operate with the rigidity of a statutory
enactment. Each case must be considered on its own facts and only relevant
circumstances should enter into the determination of the wage structure. The
fundamental principles to be considered are: (a) how the wages of the workers
concerned compare with those paid, to workers of similar grade an( skill by
other employers in similar or other industries in the 'region, and b) what
wages the establishment or industry can afford to pay. In the present case,
taking into account the increase in its net profits and the fact that the burden
of the increased wage bill would not be more than 1/10th of the net profits,
the Tribunal was right in holding that the appellant had the capacity to pay
the increased wage bill.
[467 B-C, H; 468 A-B, G-H; 469 A-D] (3) The
Tribunal compared the appellant-company with four engineering concerns. One of
them belonged to the same group of industries as the appellant. There were
common awards in respect of both of them. Further, there was an award given at
the same time by the same Tribunal in the connected concern also, the charter
of demands being the same as in the appellant-company and based on several
common exhibits. Since the number of industries in the region was small, it was
open to the Tribunal to take into consideration the conditions existing in the
engineering concerns in the region, particularly those in a concern where there
is affinity, even though the appellant-company could not be described as a
general engineering industry.
Smaller concerns,. where the scale of pay is
considerably lower, do not furnish a just basis for comparison. [470 A, B, D.
F-G] Greaves Colton & Co. v. The Workmen,  5 S.C.R. 362, followed.
(4) The Tribunal fixed lower wages in the
reference relating to the connected concern, because, a substantial ment by way
of incentive bonus. But in the case of the appellant-company, finding the yield
from incentive bonus, low, the Tribunal fixed the wages at the proper level
without considering the yield from incentive bonus, that is, without being
influenced by it in any way. [471 E, G-H; 472 A-B] (5) In the present case the
fixation of scales of pay has been very cautious, the starting wage and the
annual increment were not high, and therefore, it cannot be said that the
Tribunal was in error in departing from point-topoint adjustment in granting
increments based on the length of service. [472 G-H] Observations in Hindustan
Times V. Their Workmen,  1 S.C.R. 234 at p. 249, followed.
(6) In view of the facts that the workmen
demanded retrospective revision from 1st July 1961, and that the matter was
referred to the Conciliation Board in 'September 1962, the choice of 1st
October 1962 by the Tribunal cannot be characterised 'as either illegal or
unfair. [473 C] (7)The monthly-paid employees mentioned by name in the order of
reference belong to one category or another in the Grades A to D. The intention
was to have a general revision of the scale of payment to all workers paid
monthly; otherwise, it would have been invidious for some persons in the same
Grade to receive more pay than others. The Tribunal was therefore right in
treating the, reference 'as referring to all the four Grades and not reading it
as restricted only to a few classes. [473 F-H] (8) There have been a number of
awards in which dearness allowance was fixed in the same manner as by the
present award. The award in the connected concern could not be used as a
precedent., because of the special' facts' obtaining in that concern. [475 C,
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 634 of 1965.
Appeal by special leave from the Award (Part
11) dated April 23, 1964 of the Industrial Tribunal, Maharashtra, Bombay in
Reference (IT) No. 271 of 1962.
H. R. Gokhale and I N. Shroff, for the
K. K. Singhvi, R. S. Kulkarni, S. C. Agarwala
and D. P.
Singh, for the respondents.
The Judgment of the Court was delivered by
Hidayatullah, J. This is an appeal against the Award, April 23, 1964, of the
Maharashtra Industrial Tribunal, Bombay (Mr. Meher) in reference (IT) 271 of
1962. The Award was given in a dispute between the Kamani Employees Union,
Bombay and the Kamani Metals & Alloys Ltd. The Company is the appellant
before us. The reference was occasioned by a demand raised by the Union on
February 25, 1960 in relation to wage scales and classifications, dearness
allowance, production bonus, permanency for daily-rated workmen and grades and
scales of pay, dearness allowance and abolition of marriage-clause for monthly
paid employees. At first a reference was made to a Conciliation Board by the
Government on September 8, 1962. The conciliation was frustrated for some
reasons and on December 14, 1962, the Bombay Government acting under S.
10(1)(d) of the Industrial Disputes Act, 1947 referred the dispute to the
Tribunal for adjudication.
By the Award now under appeal, some points
were decided in favour of the Company and some others in favour of the workmen.
The workmen have not appealed and the Company has also confined this appeal to
some of the points decided against it.
We are concerned with a Company which is
carrying on the business of melting and manufacturing all kinds of rolled
products of non-ferrous metals and alloys, copper and copper-based alloys, such
as sheets, strips, coils etc.
According to the Company the process of
manufacture, unlike the general engineering industry, involves only the melting
of the non-ferrous metals and casting them into suitable slabs for the
subsequent processes of hot and cold rolling to alter their shape, size and
The product so wrought serves as a base raw,.
material for making products such as automobiles, telephones, radios and other
electrical gadgets, etc. The Company claims that it cannot be described as a
general engineering industry.
The main contentions in this appeal concern
the revision of wages and monthly pays and the fixing of wage scales and time
scales in respect thereof, respectively, and the increase in dearness allowance
by adopting a new system of calculation. The Company 466 also complains that
the Award has been given retrospective operation entailing heavy burden upon
it. In support of the above contentions the Company states that its financial
capacity does not bear the revision either of the wages and pays on the one
hand or the dearness allowance on the other.
It submits that the Tribunal in revising the
wages, pays and' the dearness allowance has followed wrong principles and
ignored those laid down by this Court. Much. of the argument in respects of
wages to daily rated workmen and pays to monthly-rated workmen is common and it
will not be necessary to refer to the argument twice over in the course of this
This is the first revision of wages and the
dearness allowance in this Company during the last 20 years. The wage scales
and the dearness allowance were fixed unilaterally to start with. The minimum
basic wage was fixed at Rs. 30 per month or Rs. 1.16 per day which was the
minimum settled by the Bombay Textile Standardization Award and the First
Central Pay Commission for Government servants in or about 1950. The Tribunal
has raised the minimum wage to Rs. 1.35 per day, which is equivalent to a wage
of Rs. 35 per month. The maxima have also been raised proportionately.
Similarly,, in the case of monthly rated workmen the minimum monthly' salary,
which was Rs. 60 for the lowest grade clerk, has been raised to Rs. 85/and the
maximum has been increased in almost the same proportion.
The Company contends that this increase is
based upon wrong principles inasmuch as the wages and pays in this company have
been compared not only with the companies operating non-ferrous metals in the
same way but with general engineering concerns -and has taken an irrelevant
factor, namely, the yield from incentive bonus into consideration, has made
wrong grades and unnecessary adjustment in making fitments without taking into
account the financial burden thus involved and the capacity of the Company to
We shall consider these submissions.
In dealing with these contentions we shall
begin by considering one contention which, if accepted$ will cut at the very
toot of the case for revision of wages. It has, however, no merit. The
submission is that there is no change 'of circumstances justifying a revision
of wages and pay scales or dearness allowance. It can hardly be maintained that
wages fixed so far back do not need revision, when, as everyone knows,
commodity prices have soared high, the general level of wages has gone up and
in some industries there have been two or three revisions already and in some
others Wage Boards have been appointed to revise or fix wages. We can take
judicial notice of these facts. In this Company no revision has -taken place
and the demand is, therefore,. not unjustified.
Before we deal with the other contentions it is
necessary to make a few preliminary observations about the principles which 467
are to be followed. In questions of this type it is first desirable to consider
what amount is necessary to maintain and even improve the workers' standard of
living, how wages of the workers concerned compare with those paid to workers
of similar grade and skill by other employers in similar or other industries in
the region and what wages the establishment or industry can afford to pay..
These are the fundamental principles which have to be borne in mind. The first,
however, is a general inquiry into the structure of wages which it may not be
necessary to examine elaborately each time because that inquiry is generally
made independently of' individual cases. The data is usually compiled by labour
conferences and experts. The other two matters, of course, require attention.
Fixation of a wage-structure is always a
delicate task because a balance has to be struck between the demands of social
justice which requires that the workmen should receive their proper share of
the national income which they help to produce with a view to improving their
standard of living, and the depletion which every increase in wages makes in
the profits as this tends to divert capital from industry into other channels
thought to be more profitable. The task is not rendered any the easier because
conditions vary from region to region, industry to industry and establishment
to establishment. To cope with these differences certain principles on which
wages are fixed have been stated from time to time by this Court. Broadly
speaking the first principle is that there is a minimum wage which, in any
event, must be paid, irrespective of the tent of profits, the financial
condition of the establishment or the availability of workmen on lower wages.,
This minimum wage is independent of the kind of industry and applies to all
alike big or small. It sets the lowest limit below which wages cannot be
allowed to sink in all humanity. The second principle is that wages must be
fair, that is to say, sufficiently high to provide a standard family with food,
shelter, clothing, medical care and education of children appropriate to the
workman but not at a rate exceeding his wage earning capacity in the class of
establishment to which he belongs. A fair wage is thus related to the earning
capacity and the workload. It' must, however, be realised that 'fair wage' is
not 'living wage' by which is meant a wage which is sufficient to provide not
only the essentials above-mentioned but a fair measure of frugal comfort with
an ability to provide for old age and evil days. Fair wage lies between the
minimum wage which must be paid in any event, and the living wage, which is the
goal. As time passes and prices rise, even the fair wage fixed for the time
being tends to sag downwards and then a revision is necessary. To a certain
extent the disparity is made up by the additional payment of dearness
allowance. This allowance is given to compensate for the rise in the cost of
living. But as it is 468 not advisable to have a 100%. neutralisation test it
lead to inflation, the dearness allowance is often a little less than 100%
neutralisation. In course of time even the addition of the dearness allowance
does not sufficiently make up the gap between wages and cost of living and a
revision of wages and/or dearness allowance then becomes necessary. This
revision is done on certain principles.
These principles have been stated in more
than one case of this Court. The Company, however, relies upon Novex Dry
Cleaners v. Its Workmen(1). The principles laid down in that case have been
accurately summarized in the head-note thus :
industry to bear the burden of the said wage
scale is a very relevant and very important factor. Before comparing the
establishment in question with other establishments engaged in the same trade
in the region, it would be obviously necessary for the industrial tribunal to
compare the establishments in respect of their standing, the extent of the
labour force employed by them, the extent of their respective customers and
what is more important, a comparative study should be made of the profits and
losses incurred by them for some years before the date of the award. It is well
known that in fixing the wage structure on a fair basis ; an attempt is
generally made in assessing the additional liability imposed on the employer by
the new wage structure and trying to anticipate whether the employer would be
able to meet it for a reasonably long period in future.
Where the award simply fixed the wage scales
on the assumption that the establishment in question was comparable to the
other two establishments in the same region without considering the aspects
mentioned above, it must be set aside. In the consequence, the industrial
tribunal was directed to reconsider the question of fixation of wage scales in
the light of the principles mentioned supra.
The Company contends that many of the matters
here stated have not been considered and the Award being defective for that
reason deserves to be set aside. This is not a proper approach. The
observations no doubt lay down the principal guide-lines but they are not intended
to operate with the rigidity of a statutory enactment. The Court has indicated
what lines of inquiry are likely to lead to the discovery of correct data for
the fixation of fair wages in the sense explained above. In this task all the
relevant considerations must enter but fruitless inquiries into matters of no
particular (1)  1 L.L.J. 271.
469 importance to a case are hardly to be
insisted upon because rather than prove of assistance, they might well
frustrate the very object in view. Each case requires to be considered on its
own facts. In the case before us, all relevant circumstances have, in our
opinion, entered the determination, and it has not been shown to us that any
other circumstance could or should have been considered. In fact the argument
was that the tribunal considered some irrelevant things and this has vitiated
the finding. We shall. now consider the specific objections.
The Company has a capital of Rs. 40,00,000.
Its sales in 1957-58 to 1961-62 increased from Rs. 1,81,18,873 to Rs.
2,31,50,485 and its profits in 1962-63 were
of the order of Rs. 28 lakhs, excluding Rs. 51 lakhs for depreciation and Rs. 2
lakhs for managing agency commission. The burden of the increased wage bill
will not be more than 1/10th of its net profits, to say nothing of some other
savings by way of reduction of income-tax. The tribunal held that the burden
could be borne and we agree. One part of the inquiry, namely, the capacity to
pay the increased wage bill was satisfied.
The next part of the inquiry involved the
application of the principle of industry-cum-region. This principle is that
fixation or revision of scales of wages, pays or dearness allowance must not be
out of tune with the wages etc.
;prevalent in the industry or the region.
This is always desirable so that unfair competition may not result between an
establishment and another and diversity in wages in the region may not lead to
industrial unrest. In attempting to compare one unit with another care must be
taken that units differently placed or circumstanced are not considered as
guides, without making adequate allowance for the differences. The same is true
when the regional level of wages are considered and compared. In general words,
comparable units may be compared but not units which are dissimilar. While
disparity in wages in industrial concerns similarly placed leads to discontent,
attempting to level up wages without making sufficient allowances for
differences, leads to hardships.
It is complained that the Tribunal, has done exactly
the opposite, namely, that it has compared dissimilar concerns and not compared
similar ones. What the Tribunal has done is to compare the Kamani Metals &
Alloys (appellant Company) with the Indian Smelting and Refining Co. Ltd. and
the Kamani Engineering Corporation Ltd. The appellant Company does not object
to the first but to the second as it deals with nonferrous metals and alloys
and does not require engineering process in its manufacture. For the same
reason a comparison with Alcock Ashdown an( Co. and Richardson and Cruddas
& Co. is objected to. On the, other hand, it is submitted that another
company Devidayal Metals Industries Ltd., Bombay was a comparable concern.
470 Both sides agree that a comparison with
the Indian Smelting and Refining Co. Ltd. was proper. As regards Devidayal it
is clear from the records that it is a much smaller concern and does not
furnish a just basis for comparison The scales of pay existing in it are
considerably lower than the existing scales in many instances. As regards
Kamani Engineering Corporation it is necessary to consider a few facts. In 1951
a common award was given in respect of Kamani Engineering Corporation and the
Kamani. Metals and Alloys. In 1958 the demand for revision of dearness
allowance was rejected by a common award. This time too the charter of demands
in respect of the Kamani Engineering and Kamani Metals & Alloys was the
same and given within a few days of each other. These references were first
pending before Mr. T. Bilgrani but as he had 551 references pending before him
five references in respect of the Kamani group -of industries were withdrawn
from him and made over to Mr.
Meher. The references were heard together.
The award in the Kamani Engineering was rendered on 27th February, 1964 and
that in Kamani Metals & Alloys on 23rd April, 1964.
Many of the exhibits were common and the two
awards refer to these common exhibits. In these circumstances, the comparison
was not inadmissible. The principle of fixation of wages and dearness allowance
was stated by this Court in these words decisions is that in applying the,
industrycum-region formula for fixing wage-scales the tribunal should lay
stress on the industry part of the 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.......... (1).
In dealing, therefore, with only one
comparable concern it was open to take into consideration the conditions
existing in engineering concerns, particularly those in Kamani Engineering
Corporation, which belongs to the same group and there is thus affinity between
We were taken through the comparative charts
showing the scales of wages in these concerns and pointed out the differences
particularly those operating to the disadvantage of the appellant Company. That
some differences are bound to be there because (1) Greaves Cotton & Co. v.
Their Workmen  5 S.C.R.
362:  1 L.L.J. 344, 346.
471 of many imponderables that go into the
fixation of wages, goes without saying. We are, of course, not expected to go
into the matter over again in the appeal. An appeal against an award brought by
special leave is not an appeal as of right. It is not intended to be an appeal
on every ground of fact and of law unless this Court considers it fit to
examine the matter from any special angle Before a party can claim redress, it
must show that the award is defective by reason of an excess of jurisdiction or
of a substantial error in applying the law or some settled principle or of some
gross and palpable error occasioning substantial injustice. An industrial
adjudication by reason that it is an award cannot be assailed because some
other person would have given a different award or that elaborate reasons have
not been given. We considered the comparative charts carefully and on the
whole, we are satisfied that the scales of wages as fixed by this Award when
compared with those existing in Indian Smelting, when they are high, are not so
high as to merit special comment or interference. Sometimes they are lower. It
remains, however, to consider the case from the angle of the scales of wages
existing in Kamani Engineering Corporation.
In dealing with the scales of pay in
comparison with those existing in Kamani Engineering Corporation the Tribunal
observed that higher wages were being fixed in the Kamani Metals & Alloys
because the yield from incentive bonus in the Kamani Engineering Corporation
was between 20 to 30% of the wages and the dearness allowance whereas in this
Company it was abnormally low. Mr. Gokhale contended that the yield from
incentive bonus is an irrelevant factor to take into account and observed that
if persons could get higher wages by not earning incentive bonus, the result
might be a disincentive to work at all. Speaking generally, his objection is
Tight to a certain extent. But it is not right in the circumstances of this
case. The Company has since 1949 introduced a scheme of wage incentive. There
is no straight piece rate system under which the worker is paid a fixed amount
for each unit of out-put. There is a fixation of average production for a whole
group and not for-the individual worker. The target in the melting section is
fixed at 5000 cwt. and 1.5 %, on every additional 300 cwt.
is fixed as bonus. Other sections have
different targets and different percentages. A similar scheme also exists in
the Kamani Engineering Corporation. What has happened is that the Tribunal in
fixing scales of wages in the reference from Kamani Engineering fixed lower
rates because it was of the opinion that quite a substantial sum was earned in
that establishment by way of incentive bonus. When the Tribunal came to decide
the present reference it recalled that lower wages were fixed in the Kamani
Engineering Corporation case because of the yield from incentive bonus. It,
therefore, ascertained the yield in the Kamani 472 Metals & Alloys and
finding it low fixed the wages at the proper level unaffected by consideration
of incentive bonus.
This really means that proper wages were
fixed in the Kamani Metals & Alloys with-out being influenced in any way by
the yield from incentive bonus although in the case of Kamani Engineering
Corporation lower wages were fixed, because the yield from incentive bonus was
very high. In these circumstances, we are of the opinion that the wages in the
present case 'have not really been influenced by considerations of yield from
incentive bonus whatever may be said of Kamani Engineering Corporation.
It was next contended that there is no case
made out for adjustment of the workmen in the new time scale after granting
them one additional increment after every three years' service and two
additional increments after five years' service. The principle on which a
point-to-point adjustment is sometimes departed from and increments are granted
was stated in some cases of this Court. It is sufficient to refer to only one
of them. In Hindustan Times, Ltd. v. Their Workmen(1), the' question of
adjustment of existing employees into new scales was considered. It was
observed as follows :
It may. well be true that in the absence of
any special circumstances an adjustment of the nature as allowed in this case
by allowing special increment in the new scale on the basis of service already
rendered may not be appropriate. Clearly, however, in the present case the.
tribunal took into consideration in deciding this question of adjustment the
fact that it had been extremely cautious as regards increasing the old wage
scales. Apparently, it thought that it would be fair to give some relief to the
existing employees by means of such increase by way of adjustment while at the
same time not burdening the employer with higher rates of wages for new
incumbents. In these circumstances, we do not see any justification for
interfering with the directions given by the tribunal in the matter of
adjustments." In this case also the fixation of scales has been very
cautious. The increase from Rs. 1.16 to Rs. 1.35 in the lowest category is not
very high considering that these wages had existed for 12 years before they
were so adjusted.
Similarly, the starting wage in all the other
three categories cannot be considered to be very high. The same is the case
with monthly-rated workmen. The annual increment is not unduly high and in
these circumstances it cannot be said that the Tribunal was in error in
departing from a point-to-point adjustment. to grant one or two increments,
based on the (1)  1 S.C.R. 234, 249:  1 L.L.J. 108 115.
473 length of service. The discretion was
exercised on sound judicial lines.
It was finally contended that the Tribunal
was in 'error in making the Award retrospective from October 1, 1962, when the
reference was made on December 14, 1962. This objection has no force. In the
charter of demands the workmen had claimed retrospective revision from July 1,
1961. The matter was referred to the Board of Conciliation on September 8,
1962. When conciliation was frustrated because of the arrest of some of the
workers of the Union under the Defence of India Rules, the present reference
was made to the Tribunal. The Tribunal could have easily chosen September 8,
1962 but chose an intermediate date to be fair to both sides. In our judgment,
the choice of October 1, 1962 by the Tribunal cannot be characterised as either
illegal or unfair. The question of incentive bonus revision was not mooted
before us and the direction that incentive bonus should be calculated on the new
scale from 1st January, 1964 is more in favour of the employers than the
workmen and no grievance can be made about it.
This brings us to the question of the
Most of the points which we have discussed in
relation to the daily rated workmen are common. We have seen the scales which
have been fixed and compared them with the rates obtaining in Indian Smelting
and the Kamani Engineering and other concerns and are satisfied that they have
not been put so high as to merit interference at our hands. It is, however,
contended that the Tribunal has gone beyond the Reference inasmuch as the
Reference was in respect of special categories of monthly-rated employees by
designation but the Tribunal has fixed the new scales not only for those workmen
but for all clerical and other workmen which were classified as Grades A, B, C
and D in 1950. It is true that the Tribunal has not only fixed the new scales
for those categories of monthly-paid employees who were named in the order of
reference but has also provided that those scales shall apply to clerks in the
A, B, C and D Grades. It is, however, clear that even the monthly-paid
employees mentioned by name belong to one category or another. in the Grades A
to D. It would have been highly invidious if some persons in the Grades were to
receive more pay than the others in the same Grade. The Award, therefore,
treats the Reference as referring to the 4 Grades although only some of the
class who go by special -designations in each Grade have been mentioned. The
intention, however, was to have a general revision of the scales of payment to
all workers paid monthly and the Tribunal was, therefore, right in not reading
the Reference as restricted to only a few classes..
By doing so the Tribunal has avoided further
industrial unrest and disputes and has really given effect to the underlying
object of the reference.
474 This brings us to the last question which
is related to the dearness allowance payable to the monthly-rated workmen.
Previous to the present Award the dearness
allowance was payable in this company in the following manner :
"On the 1st Rs. 100-(upto Rs. 100) 60
per cent with a minimum of the D.A.paid to the Textile Operatives by the Bombay
On the 2nd Rs. 100-(upto Rs. 200) 20 per cent
of the 2nd hundred rupees.
On the 3rd Rs. 100-(upto Rs. 300) 15 per cent
of the 3rd hundred rupees.
On the 4th Rs. 100-(upto Rs. 400) 10 per cent
of the 4th hundred rupees.
On the 5th Rs. 100-(upto Rs. 500) 10 per cent
of the 5th hundred rupees.
On every hundred above Rs. 500-of 5 percent
of basic every hundred rupees.
The above percentage of dearness allowance,
is applicable when the Bombay Cost of Living Index rests between 311 to 320.
Variation in the above percentage to be allowed per 10 point movement in the
index. First slab-3 per cent of dearness allowance ; 2nd slab 1-1/2 per cent of
dearness allowance; 3rd slab 1 per cent of dearness allowance ; 4th slab 3/4
per cent of dearness allowance and the last slab 1/2 per cent of the dearness
allowance." In the Award this has been altered to a scheme which is as
follows On the first Rs. 100 basic pay (upto Rs. 100) 60% On the second Rs. 100
basic pay (upto35% of the 2nd 100 Rs. 200) rupees.
On the third Rs. 100 basic pay (upto15 % of
the 3rd 100 Rs. 300) rupees.
On the Rs. 301 basic and above10 % of the
NOTE The minimum dearness allowance will be
the revised textile scale.
The above percentage of dearness allowance is
applicable when the Bombay Consumer Price Index is between 311 and 320.
Variation per 10 point movement in the index
should be as follows 475 First slab of Rs. 100 basic pay 5 % (e.g. dearness
allowance will be 65 % of basic pay when index is between 321 and 330).
Second slab of 100 basic pay 1-1/2% Subsequent
slabs 1 %".
It is contended that linking the dearness
allowance, after the consumer price index 321 to wages has made a departure
from the fixation of dearness allowance fixed in tie Kamani Engineering
Corporation in which, under the same circumstances, the percentage after the
consumer price in 0 321 is that of the dearness allowance and not of the basic
salary. On the other side, we were shown a number of awards in which dearness
allowance has been fixed in the same manner as by this Award. It appears that
the case of Kamani Engineering was treated as a special case because the
incentive bonus there was yielding a third of the total earnings of the workmen
and it was considered that if the dearness allowance was also raised then a
very great burden would be thrown upon the employer by reason of the incentive
bonus. We cannot, therefore, use the precedent of the award in the Kamani
Engineering Corporation because of these special facts. We are satisfied that
in many other companies dearness allowance has been ordered to be calculated in
the same manner as has been done by this Award and we see no reason, therefore,
For these reasons we find no force in this
appeal. It fails and will be dismissed with costs.
V.P.S. Appeal dismissed.