The Hindustan Times Ltd., New Delhi Vs.
Their Workmen  INSC 372 (14 December 1962)
CITATION: 1963 AIR 1332 1964 SCR (1) 234
CITATOR INFO :
R 1966 SC 305 (47) RF 1967 SC 948 (9) RF 1967
SC1175 (15) R 1967 SC1286 (8) RF 1969 SC 182 (10) E 1969 SC 360
(11,15,19,28,32,35) R 1970 SC 87 (4) D 1970 SC 245 (9) R 1972 SC 343 (13,14) R
1976 SC2091 (7) R 1978 SC1113 (26) R 1979 SC1211 (8) R 1980 SC 31 (8) RF 1981
SC 599 (16) RF 1981 SC1088 (16)
Industrial Dispute-Fixation of wage
structure-Factors to be considered-Fair Wage-Living Wage-Extent of power to
interfere under Art. 136 with wage scale fixed by TribunalDearness allowance on
basis of sliding scales-Interim agreement regarding interim relief not to be
ignored-Leave rules-Gratuity-Retirement age-Retrospective operation of
award-Delhi Shops & Establishment Act, 1954 (Delhi 7 of 1954)-Employees'
State Insurance Act, 1948 (34 of 1948) ---Industrial Disputes Act, 1947, (14 of
The Chief Commissioner, Delhi, referred an
industrial dispute for adjudication to the Industrial Tribunal, Delhi, which gave its award on March 16, 1959. Both the appellant and the respondents were
dissatisfied with the award and they came to this Court by special leave. The
award was challenged by the appellant with regard to scales of pay, dearness
allowance, adjustments, leave rules, gratuity and retrospective effect of the
award. The respondents attacked the award as regards the working hours, leave
rules and retirement age.
Held, that while social justice demands that
workmen should get a fair share of the national income which they help to
produce, it has also to be seen that that does not result in the drying up of the
source of national income itself.
Inroads 235 on the profits of the capitalists
should not be such as have a tendency to drive capital away from fruitful
employment and thereby affect prejudicially capital formation itself The
Tribunal had applied the correct principles and the award should not be
disturbed, Held, also, that the Tribunal had erred in awarding a fixed dearness
allowance of Rs. 25 /-. The object of dearness allowance being to neutralise
part of the rise or fall in the cost of living, it should ordinarily be on a
Held, that the contention of the appellant
that in view of the provisions of the Employees' State Insurance Act, 1948, no
provision need be made about sickness leave at all, was rejected. It was
pointed out that in providing for periodical payments to an insured worker in
case of sickness or for medical treatment or attendance to him or the members
of his family under the Act of 1948, the Legislature did not intend to
substitute any of these benefits for the workmen's right to get leave on full
'Pay on the ground of sickness.
Held, that as regards those workmen to whom
the Delhi Shops and Establishments Act, 1954, applied,. the Tribunal had acted
illegally in fixing the period of sick leave at 15 days and permitting
accumulation. The appellant shall allow to the workmen to whom the Delhi Shops
and Establishments Act applied, sickness or casual leave for a total period of
12 days with full pay and allowances, and such leave shall not accumulate. As
it was not desirable to have two separate leave rules for two classes of
workmen, one to whom the Act of 1954 applied and tile other to whom the Act did
not apply, it was held that the same rule should apply to other workers also.
Held, also, that tile scheme of gratuity as
framed by the tribunal was not unduly favourable to workmen and it also did not
place any undue strain on the financial resources of tile Company. As regards
the provision in the gratuity scheme that an employee who is dismissed for
misconduct shall not be entitled to any gratuity; it was held that the proper
provision should be that where an employee is dismissed for misconduct which
has resulted in financial loss to the employer, the amount of loss should be
deducted from the amount of gratuity due.
The award of the Tribunal on tile question of
retirement age was set aside and the retirement age was fixed at 58, subject to
the proviso that it would be open to the company to continue in its employment
a workmen who had passed that age, The rule was to apply to all tile employees
of the Company.
236 No general formula could be laid down as
to the date from which a Tribunal should make its award effective. That
question has to be decided by the Tribunal on consideration of the
circumstances of each case. There was no justification for interfering with the
direction of the Tribunal that in this case the reliefs given by it should
become effective from the date of the reference.
Standard Vacuum Refining Co., of India v. Its
workmen,  S. C. R. 536, M/s. Crown Aluminium Works v. Its workmen, 
S. C. R. 651, Express Newspapers Ltd. v. Union of India,  S. C. R. 12,
M/S. Lipton Ltd. v. Their Workmen  Supp. 2 S. C. R. 150, Workmen
Hindustan Motors v. Hidustan Motors, (1962) 2 L. L. J. 3 52, French Motor Car
Co. v. Their Workmen, (1962) 2 L. L. J. 744 and Guest Keen, Williams (P) Ltd.
v. P. J. Sterling  1 S. C. R. 348, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 489 & 490 of 1961.
Appeals by special leave from the award dated
March 16, 1959, of the Second Industrial Tribunal, Delhi in Reference I. D. No.
20 of 1958.
G.S. Pathak, S. T. Desai, M. L. Sethi, B.
Dutta and Anand Prakash, for the appellant (in C. A. No. 489/61) and the
respondent (in C. A. No. 490/61).
M. C. Setalvad, Attorney-General for India
M.K. Ramamurthi, D. P. Singh, R. K. Garg and S.C. Agarwal, for the respondents
(in C.A. No. 489/61) and the appellants (in C. A. No. 490/61).
1962. December 14. The judgment of the Court
was delivered by DAs GUPTA,.' J.-These two appeals by special leave, one by the
employer and the other by the workmen, arise out of an industrial dispute that
was referred for adjudication to the Industrial Tribunal Delhi, by an order
made on January 23, 1958 by the Chief Commissioner, Delhi. The Tribunal made
its award on March 16, 1959. Out of the numerous 237 matters that were included
in the terms of reference, we are concerned in these appeals only with a few.
The employer challenges the award as regards : (1) Scales of pay, (2) Dearness
allowance, (3) Adjustments, (4) Leave Rules, (5) Gratuity and (6) Retrospective
effect of the award. The workmen also attacked the award as regards the scales
of pay and dearness allowance. In addition, they have attacked the award as
regards the working hours, leave rules, night shift allowance, retirement age
and procedure for taking disciplinary action. At the time of the hearing before
us however the learned Attorney General, appearing for the workmen, did not
press their claim for modification of the award as regards, night shift
allowance, leave rules and procedure for taking disciplinary action and working
It appears that when the dispute was before
the Conciliation Officer, Delhi, for settlement an interim agreement was
arrived at between the parties on December 20, 1957 by which the management
agreed to give certain interim reliefs, ranging between Rs. 6/to Rs. 10/per
month from the month of November 1957. One of the terms of the agreement was
that this payment "will be adjusted against the final outcome of the
demands by constitutional means". The Tribunal has in its award given a
direction that this interim relief shall remain unaffected. Taking this to be a
direction that the adjustment as agreed upon of payments under the interim
arrangement shall not be made, the employer has in its appeal challenged the
correctness of this direction also.
The most important of the matters in dispute
are the questions of the wage scale, the dearness allowance and the adjustment
of existing employees into the new scales. It appears that from 1946 onwards
the Company's workmen have had a consolidated wage scale, no distinction being
made between 238 the basic wage and the dearness allowance. This wage scale has
remained practically unaltered except for some special increments given in the
year 1948. By the award the Tribunal has introduced new wage scale for certain
existing categories of workmen and in some cases has introduced new scales,
after amalgamating more than one category. Thus certain railway despatchers,
advertisers, Box No. sorters, filing clerks and bank clerks who were formerly
in the scale of Rs. 50-4-90-EB-4-115 and Junior Clerks etc., who had a scale of
Rs. 60-100EB-4-115 have all been put on a new scale of Rs. 70-5-100-EB-5-150.
There has been a similar amalgamation or clerks, assistants, cashiers, record
keepers and others some of whom were on Rs. 80-175 and some on Rs. 80-203
scale, all of them being now put on a new scale of Rs. 90-200. In both cases
the starting salary has been raised; the maximum has been raised for the first
Supervisors and others who were formerly on
three different scales, some on Rs. 125-350, some on Rs. 125-300, and some on
Rs. 100-250, have all been amalgamated and have been put on a new scale of Rs.
100-350. Obviously, this would mean a lower starting salary for some and
maximum for some. ,job I) Daftries some of whom were on Rs. 70-115 scale and
others on Rs. 100-155 have all been put on a new scale of Rs. 80 to Rs. 11,15,
resulting thus in a lowering of starting salary for some and a rise of a higher
maximum for all. A similar lowering in the starting salary has also occurred in
cases of some of the job machine men. They were formerly on two scales, one of
Rs.125-175 and the other of Rs. 75-175. The Assistant Foremen in the job
Department formerly on Rs. 125175 are put on a scale of Rs. 125-202. Where
there has been no amalgamation the new scale has resulted in a slight increase
in some cases both in the starting salary and the maximum. In some catagories,
no change has been made at all, 239 It is unnecessary to give more details of
the difference between the old scale and the new scale as what has been
mentioned above is sufficient to indicate that there has been some change in
favour of the workmen, though this change is not much. The employer's
contention before us is that there was no case for any revision whatsoever and
the Tribunal acted wrongly in making any change in the old wage scale. The
workmen's contention on the contrary is that the changes do not go far enough.
The fixation of wage structure is among the
most difficult tasks that industrial adjudication has to tackle. On the one
hand not only the demands of social justice but also the claims of national
economy require that attempts should be made to secure to workmen a fair share
of the national income which they help to produce, on the other hand, care has
to be taken that the attempt at a fair distribution does not tend to dry up the
source of the national income itself On the one hand, better living conditions
for workmen that can only be possible by giving them a "living wage"
will tend to increase the nation's wealth and income on the other hand,
unreasonable inroads on the profits of the capitalists might have a tendency to
drive capital away from fruitful employment and even to affect prejudicially
capital formation itself. The rise in prices that often results from the rise
of the workmen's wages may in its turn affect other members of the community
and may even affect prejudicially the living conditions of the workmen
themselves. The effect of such a rise in price on the Country's international
trade cannot also be always ignored.
Thus numerous complex factors, some of which
are economic and some spring from social philosophy give rise to conflicting
considerations that have to be borne in mind.
Nor does the process of valuation of the
numorous factors remain static. While international movements in the cause of
labour have for many years influenced thinking-and 240 some-times even judicial
thinking--in such matters, in this country, the emergence of an independent
demo cratic India has influenced the matter even more profoundly.
Gajendragadkar, J. speaking for the Court in
Standard vacuum Refining Co., of India v. Its Workmen (1), has observed :"In
constructing a wage structure in a given case industrial adjudication does take
into account to some extent considerations of right and wrong, propriety and
impropriety, fairness and unfairness. As the social conscience of the general
community becomes more alive and active, as the welfare policy of the State
takes a more dynamic form, as the national economy progresses from stage to
stage, and as under the growing strength of the trade union movement,
collective bargaining enters the field, wage structure ceases to be a purely
arithmetical problem. Considerations of the financial position of the employer
and the state of national economy have their say, and the requirements of a
workman living in a civilised and progressive society also come to be
recognised." In trying to keep true to the two points of social philosophy
and economic necessities which vie for consideration, industrial adjudication
has set for itself certain standards in the matter of wage fixation. At the
bottom of the ladder, there is the minimum basic wage which the employer of any
industrial labour must pay in order to be allowed to continue an industry.
Above this is the fair wage, which may roughly be said to approximate to the
need based minimum, in the sense of a wage which is "adequate to cover the
normal needs of the average employee regarded as a human being in a civilised
society." Above the fair wage is the "living wage" a wage
"which will maintain the workman in the highest state of industrial
efficiency, which will enable him to (1)  S.C.R. 536, 543.
241 provide his family with all the material
things which are needed for their health and physical well-being, enough to
enable him to qualify to discharge his duties as a citizen." (Cited with
approval by Mr. justice Gajendragadkar in Standard Vacuum Company's Case (1)
from "The living Wage" by Philip Snowden).
While industrial adjudication will be happy
to fix a wage structure which would give the workmen generally a living wage
economic considerations make that only a dream for the future. That is why the
industrial tribunals in this country generally confine their horizon to the
target of fixing a fair wage. But there again, the economic factors have to be
carefully considered. For these reasons, this court has repeatedly emphasised
the need of considering the problem on an industry-cum-region basis, and of
giving careful consideration to the ability of the industry to pay.
(Vide Crown Aluminium's Case (2); the Express
Newspapers Ltd., Case (8) and the Lipton's Case (4).
On an examination of the Tribunal's award as
regards the wage scale, we are satisfied that all the considerations mentioned
above were present in the mind of the adjudicator and we are of opinion that
there is nothing that would justify us in modifying the award either in favour
of the employer or in favour of the workmen. It is stated in the award that
before the Tribunal the Company's representative desired that a fair wage level
within its paying capacity should be evolved though at the time he argued that
existing wage structure is quite fair ""looking to the Company's
financial position as well as the comparative rates prevailing in the other concern."
The Tribunal has not accepted the Company's contention that the existing wage
structure is fair, though at the same time it has held that the wage system
needs no such radical change as alleged by the Union.
(1)  S.C.R. 536, 543.
(3)  S.C.R. 12.
(2)  S.C.R. 651.
(4)  Supp. 2 S.C.R. 150.
242 Mr. Pathak, who appeared before us for
the Company, did not seriously suggest that the present wage structure gives
the employees "a fair wage." He argued generally that no case was
made out for any revision of the wage structure. Such an extreme proposition
has only to be mentioned to deserve rejection. At the time the Tribunal was
dealing with this question the wage scale of the workmen in this concern had
remained practically unaltered for almost 12 years-12 years of momentous change
through which social ideas have moved forward in favour of workmen getting a
better share of the national income; 12 years during which the new India was
born and a Constitution was framed for this new democracy "to secure to
all its citizens, justice, social and economic and political" and
enshrining in its 43rd Article the principle that ,the State shall endeavour to
secure by suitable legislation or economic Organisation or in any other way to
all workers agricultural, industrial or otherwise" among other things tea
living wage and conditions of work ensuring a decent standard of life and full
enjoyment of leisure and social and cultural opportunities...................
". The mere passage of time and these revolutionary changes would be
sufficient to convince any right thinking man of the need for revision of wage
scales which, on the face of it, were far below the "living wage" and
mostly also below the "'fair wage", provided the industry could bear
the additional burden. The case for revision becomes irresistible when one
takes into consideration the further fact that the cost of living rose steeply
during this period. On the basis of 1939 cost as 100, the index for 1946 was
282. By 1958 it had risen to 389. It may be mentioned that since then there has
been a further rise. Nor can it be seriously suggested that this concern cannot
bear the burden of an increased wage scale.
The Tribunal was, in our opinion, right in
its conclusion that the material on record shows that the Company has been
prospering and has financial 243 stability. We have for ourselves examined the
balancesheets and the other materials on the record and have no hesitation in
agreeing with that conclusion. Mr. Pathak's uphill task in the face of these
balance-sheets already on the record to show that the Company would not be able
to bear the burden of an increased wage scale has been made more difficult by
the discovery that even after the implementation of the award the Company has
made large profits during the years 1959-60, 1960-61 and 1961-62.
It appears that when the Company was given
special leave to appeal to this Court the operation of the Tribunal's award was
stayed only in so far as it directed the management to pay arrears of the wages
determined thereby but the operation of the award in so far as it related to
the payment of wages from the date of the award was not stayed;
and the management was directed to pay to the
workmen from that date wages in accordance with the wage scale fixed by the
Tribunal by its award under appeal. The result of this has been that the
Tribunal's award as regards the wage scales has been implemented with effect
from the date of the award and it is possible for this Court to know how such
additional payment has affected the financial position of the Company. It
appears that after meeting the additional charges and also after payment of
bonus and appropriation to reserves the net profits for the year 1959-60 rose
to Rs. 8,04,508/-. For the year 1960-61 these profits were Rs. 8,44,627/-. For
the year 1961-62 the profits are shown in the balance-sheet as Rs. 59,955/-.
That the Company has been prospering is clear. It has its own aero planes and
possesses immovable properties of considerable value. It has built up good
reserves and inspite of that it has been making good profits. It is reasonable
to think that with the progress of education in the country and the increasing
news mindedness of the people the future prospects of the Company are no less
bright. On a consideration 244 of all this,, we are clearly of opinion that Mr.
Pathak's contention that the wage scale fixed by the Tribunal is too heavy for
the Company to bear, must be rejected.
Equally unacceptable is Mr. Pathak's next
contention that the wage scale fixed by the Tribunal operates unfavourably on
this Company vis-a-vis two other concerns in Delhi region, viz., the Times of
India, Delhi and the Statesman, Delhi. We have compared the wage scales in
these two concerns viz., the Times of India, Delhi and the Statesman, Delhi,
with the wage scale under the award and have for the purpose of comparison
taken into consideration the dearness allowance as fixed by the Tribunal. The
comparison shows that while in some cases the Company (the Hindustan Times)
will have to pay more to its workmen than what is being paid to workmen of the
same category by the Times of India, Delhi and the Statesman, Delhi, in several
cases it will be less.
It has also to be borne in mind that the
Times of India, Delhi and the Statesman, Delhi, are much smaller units of the
newspaper industry than the Hindustan Times. These Companies are mere adjuncts
to the Times of India, Bombay and the Statesman, Calcutta, respectively.
Therefore, even if for some categories the wage scale under the award is higher
than that in the Times of India, Delhi and the Statesman, Delhi, that would be
no ground for modifying the award in favour of the Company. We have therefore
come to the conclusion that there is no ground whatsoever for modifying the
wage scale fixed by the award in favour of the Company.
On behalf of the workmen it was strenuously
contended that the increase given by the award over the previous wage scale
falls far short of justice. It is pointed out that even the Times of India, Delhi
and the Statesman, Delhi, which are much smaller 245 concerns and of lesser
financial stability and strength, pay to some categories of its workmen higher
wages than what has been fixed by the award. Thus our attention has been drawn
to the fact that for Assistants, the Times of India, Delhi, rate is Rs.
241-402, and in the Statesman, Delhi, it is Rs. 190-297 for some and Rs.
264-463 for others while under the award the scale is Rs. 125-375. There are
several other cases also where the wage scale under the award appears to be
lower than what is being paid by the Times of India, Delhi and the Statesman,
It has been urged by the learned
Attorney-General that in view of the fact that the wage scale of the Company
has remained practically stationary for the last 12 years and that it is
indisputably well below the fair wage and the further fact that even smaller
concerns in this region, like the Times of India, Delhi and the Statesman,
Delhi, have been paying more to some categories of its workmen, the wage scale
as fixed by the Tribunal should be raised at least for some of the categories.
There is undoubtedly some force in the contention and it maybe said that the
Tribunal has been rather cautious in the matter of revision of wage scales.
Even so, it has to be remembered that where,
as in the present case, the proper principles have been applied by the
Tribunal, it is not the practice of this Court to interfere, ordinarily, with
details of this nature when exercising its special jurisdiction under Art. 136
of the Constitution. It also appears to us that the very fact that the Tribunal
has been cautious in the matter of raising the wage scales has influenced it in
the directions it has given on the question of adjustment of the present
employees into the wage scale.
In this way some relief has been given to the
present employees which might otherwise have been given by raising the wage
scale. On a consideration of all these facts we have reached the conclusion
that it will not be 246 proper for us to modify the wage scales fixed by the
Tribunal in favour of the workmen also.
On the question of dearness allowance it is
not disputed before us that in the circumstances of the resent case the
Tribunal acted rightly in awarding dearness allowance at a flat rate for all
categories of workmen. On behalf of the Company it was however urged that the
Tribunal has made an obvious mistake in fixing the amount of dearness allowance
at Rs. 25/-. For fixing the rate at Rs. 25/the Tribunal has said :"In view
of the revised scales as now laid down, I think the same should further be
supplemented in the circumstances stated above by a flat rate of dearness
allowance in all cases, viz., Rs. 25/with retrospective effect from the date of
reference so that the lowest paid worker will start not less than Rs. 75/-. 1
direct accordingly." Mr. Pathak points out that the lowest paid worker for
whom wage scales have been fixed will be getting under the award a minimum of
Rs. 6l0/so that with the dearness allowance of Rs. 25/"the lowest paid
worker" will start at Rs. 85/and not Rs. 75/-. Mr. Pathak suggests that
the Tribunal has made a mistake in its calculations and that having decided
that the lowest paid worker will start at not less than Rs. 75/-, it should
have fixed Rs. 15/and not Rs. 25/as the dearness allowance. This argument
however overlooks the fact that the reference as regards the dearness allowance
was in respect of all categories of workmen, though the reference as regards
scales of pay did not cover some categories, viz., mazdoors and canteen boys.
They therefore continue to remain on their old scale of Rs. 50-3-85. When the
Tribunal in considering the question of dearness allowance was thinking of the
starting pay of the lowest paid worker 247 it had obviously these categories in
mind. Having concluded that the lowest paid worker should start at Rs. 75/as
the total amount of basic pay and dearness allowance the necessary conclusion
reached by the Tribunal was that Rs.
25/should be fixed as the dearness allowance.
It is, in our opinion, proper and desirable that the dearness allowance should
not remain fixed at this figure but should be on a sliding scale. As was
pointed out in Workmen of Hindustan Motors v. Hindustan Motors (1), the whole
purpose of dearness allowance being to neutralize a portion of the increase in
the cost of living, it should ordinarily be on a sliding scale and provide for
an increase on rise in the cost of living and a decrease on a fall in the cost
of living. On a consideration of all the circumstances of this case, we direct
that a sliding scale be attached to the dearness allowance of Rs. 25/per month
as awarded by the Tribunal on the lines that it will be liable to be increased
or decreased on the basis of Re. 1/for every ten points in case of rise and
fall in the cost of living from the base of 400, the 1939 index being taken to
be 100 the sliding scale to take effect from April 1, 1959.
This brings us to the question of adjustment
of the existing employees into the new scale. The Tribunal has dealt with this
matter thus :"'......the adjustment in the new scales shall be made with
retrospective effect from the date of the reference, viz., 23rd January, 1958.
In making adjustment in the new scales no one shall be adversely affected and
it shall be on the line laid down by the Industrial Tribunal in the case of
Caltex India Ltd., 1951 LLJ. 654 at p. 659 read with para. 23 of the decision
of the Labour Appellate Tribunal, reported in 1952 LLJ. 183 at page 188."
It appears that in the case of Caltex India Ltd.,(Supra) the Industrial
Tribunal, West Bengal, gave (1) (1962) 2 L.L.J. 352.
248 the following directions for adjustment
of employees into the wage scale fixed by it.
"1. All employees for whom the scale has
been stated above should be stepped up in the stage next above which the
present pay is drawn. A special increment at the rate of one increment in the
new scale for every three completed years of service should be given.
2. The employees whose salaries are less than
the minimum prescribed will be pulled up to the minimum of the prescribed
3. If the existing salary of an employee is
higher than the salary he will be entitled to under the prescribed scale, there
will be no cut and he will be stepped up to the nearest increase with the
increments given above.
4. After the salaries are adjusted, no
employee should be staggered and he will continue to get future increments.
5. If an employee be already drawing a salary
which is higher than the maximum prescribed by the award, he will be subjected
to no cut in his salary." This was followed by a direction as regards the
date by which the adjustment was to be made. The Labour Appellate Tribunal
modified these directions by introducing two provisions : (1) that the maximum
of the grade should not be exceeded and (2) that the basic wage that was being
paid to an employee at the date of the award of the Tribunal is not to be
affected to the employees' prejudice. The employer's objection is to the
provision that a special increment at the rate of one increment in the new
scale for every 249 three completed years of service should be given. It is
argued that such a provision may well be appropriate in a case where wage scale
is being fixed for the first time or where even if there was already a wage
scale in force the rate of increment in the new scale is much higher than that
in the old wage scale, but not where, as in the present case, the increments
under the new scale and the old scale are practically the same. We are not
impressed by this argument.
As was pointed out by this Court in a recent
judgment in French Motor Car Co., Ltd. v. Its Workmen (1), what adjustment
should be given is to be decided when fixing wage scales whether for the first
time or in place of an old existing scale has to be decided by industrial
adjudication after consideration of all the circumstances of the case.
It may well be true that in the absence of
any special circumstances and 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 ally Justification for
interfering with the directions given by the Tribunal in the matter of
It will be convenient to consider at this
stage the objection raised in the Company's appeal to the Tribunal's direction
in connection with the interim agreement. As has been stated earlier, this
agreement was arrived at between the parties when the dispute was before the
Conciliation Officer. The (1)(1962) 2 L.L.J. 744.
250 relevant portion of the agreement is in
these words :"It is hereby agreed between the parties that:
1. The Management agrees to make interim
relief on the following terms to every employee, excluding working journalists,
drawing salary up to Rs. 400 p.m.
(i)Advance payment ranging between Rs. 6/to
Rs. 10/per month beginning from the month of November, 1957 in the following
manner :(a) Those with annual increment of Rs. 3/-, Rs. 4/-, and Rs. 5/Rs. 6/(b)
Those with annual increment of Rs. 6/-Rs. 7/(c) Those with annual increment of
Rs. 7/-Rs. 8/(d) Those with annual increment of Rs. 10/Rs. 10/Note. (i) In case
any employee has already reached the ceiling of his grade, even then he would
he entitled for the above benefit.
(ii) This payment will be adjusted against
the final out-come of the present demands by constitutional means."
"The final out-come of the present demands by constitutional means's is
the Tribunal's award. Under the agreement therefore what has been received by
251 the workmen as advance payment at Rs. 6/or Rs. 71or Rs.
8/or Rs. 10/per month as interim relief has
to be adjusted against what is due to be paid to them under the award. In other
words, the Company is entitled under the agreement to deduct the payments made
as interim relief from what is payable to these very employees under the award.
The Tribunal's direction that the interim
relief shall remain unaffected is in effect an order that term (ii) of the
agreement need not be complied with. We can find no justification for such an
order. While it is true that industrial adjudication can and often has to modify
existing contracts between an employer and its workmen, there can be no
justification for modification of an agreement of this nature pending final
settlement of a dispute. Such a direction that the solemn words of the
workmen's representatives that interim relief which may be given will be
adjusted against the relief finally given need not be complied with, is not
only unfair to the employer but is also not calculated to serve the best
interests of the workmen themselves. For one thing, an order of this nature in
one case by a Tribunal that such an undertaking need not be carried out is
likely to hamper interim settlements generally; it is also not desirable that
workmen should be encouraged to treat their undertakings as of no value.
Industrial adjudication must be careful not
to encourage bad faith on the part of the workmen or the employer. A direction
as given by the Tribunal in this case that the term in the agreement that
payments made will be adjusted against the final outcome need not be complied
with, is unfortunately to have such effect on workmen. We therefore set aside
the Tribunal's direction that interim relief will remain unaffected and direct
that adjustments should be made in terms of the said interim arrangement.
This brings us to the question of Leave
Rules. The Company objects to the award as regards this matter in so far as it
directs the Company to allow 15 252 day's sick leave with full pay and allowances
with accumulation up to six months on production of medical certificate given
by a registered medical practitioner. It also objects to the direction that the
present practice as to insistence on previous application for the purpose of
casual leave should not be relaxed in cases where it cannot possibly be so done
in emergent and unforeseen circumstances and the direction that up to 3 days no
medical certificate should be asked for. It appears that at present the
Management grants 10 days' casual leave to the business staff and 7 days'
casual leave to all the other categories and there is no sick leave facility
Mr. Pathak has tried to convince us that in
view of the provisions of the Employees' State Insurance Act, 1948, no
provision need be made about sickness leave at all., That this Act has been
applied to the Company and that the workmen of the Company get the benefit of
this Act is not disputed. It is difficult to see however how the benefit that
the workmen will get under this Act can affect the question of sickness leave
being provided for the workmen.
This Act it has to be noticed does not
provide for any leave to the workmen on the ground of sickness. It provides in
s. 46 (1) (a) for periodical treatment of any insured person in case of his
sickness if certified by a duly appointed medical practitioner. It is
unnecessary to mention here the several provisions in the Act; viz., Sections,
47, 48 and 49 which deal with the eligibility of workmen for sickness benefit
and the extent of the benefit that may be granted.
Section 56 of the Act provides for medical
benefits to the insured workman or in certain cases to the members of his
family. It appears to us clear however that in providing for periodical
payments to an insured worker in case of sickness (sickness benefit) or for
medical treatment or, attendance to him or the members of his family, the
legislature did not intend 253 to substitute any of these benefits for the
workmen's right to get leave on full pay on the ground of sickness.
It is next contended that the Tribunal's
direction as regards sickness leave offend the provisions of Delhi Shops and
Establishments Act, 1954. Admittedly, a large number of workmen covered by the
reference are governed by the provisions as regards leave under the Delhi Shops
and Establishments Act, 1954. Section 22 of that Act fixes the maximum for
sickness or casual leave with wages to a period of 12 days and further provides
that such leave shall riot be accumulated. It is thus clear that as regards
those workmen to whom the Delhi Shops and Establishments Act, 1954 applies the
Tribunal has acted illegally in fixing the period of sick leave at 15 days and
We therefore set aside this direction in the
award and direct instead that the Company shall allow to the workmen to whom
the Delhi Shops and Establishments Act, 1954 applies, sickness or casual leave
of a total of 12 days with full pay and allowances and that such leave shall
not be accumulated. We are also of opinion that it will not be right to have
two separate leave rules for the two classes of workmen, one to whom the Delhi
Shops and Establishments Act, 1954 applies and the other two whom it does not apply.
For that is likely to be a source of much
discord and heartburning. Therefore, in respect also of those workmen to whom
the Delhi Shops and Establishments Act, 1954 does not apply, we think that the
same period of 12 days in a year with full pay and allowances should be fixed
for sickness or causal leave, and there should be no accumulation of such
leave; and we direct accordingly.
We cannot find any justification for the
direction of the Tribunal that the practice of insistence on 254 previous application
for the purpose of casual leave should be relaxed in cases where it cannot
possibly be so done in emergent and unforeseen circumstances and that upto 3
days no medical certificate should be asked for. The leave rules of the Company
as they now stand provide that ordinarily previous permission of the head of
the department and the Establishment Manager shall be obtained before casual
leave is taken but that when this is not possible due to sudden illness, the
head of the Department or the Manager as soon as may be practicable should be
informed in writing of the absence from work and of the probable duration of
such absence. In our opinion, this provision is reasonable and is calculated to
meet the needs of workmen for taking leave without previous permission, in case
of emergency. In these circumstances, the further directions as regards this
that have been given by the Tribunal appear to us to be unnecessary and are
hereby set aside.
On the question of gratuity, the only
argument seriously pressed by Mr. Pathak was that the scheme as framed by the
Tribunal would put undue strain on the Company's sources.
We have already expressed our agreement with
the Tribunal's conclusion that the Company's financial resources are strong and
stable and that not only has the Company been prospering in recent years but
that its future prospects are also bright. Therefore, we do not think that the
scheme of gratuity as framed by the Tribunal is unduly favourable to the
workmen or that it places any undue strain on the Company's financial
One provision in the gratuity scheme which
ought to be mentioned is that under it an employee who is dismissed for
misconduct shall not be entitled to any gratuity. It has been pointed out by
this Court in more than one case that having regard to the nature of gratuity
it will not be proper to deprive 255 an employee of the gratuity earned by him
because of his dismissal for misconduct and the proper provision to make in
this connection is that where an employee is dismissed for misconduct which has
resulted in financial loss to the employer the amount lost should be deducted
from the amount of gratuity due. As however in the present case, the workmen
have not appealed against the award as regards the gratuity scheme framed by
the Tribunal, it will not be proper for us to make the modification as
Coming now to the question of retirement age
on which the workmen have appealed, we find there is some controversy as
regards the existing position. The workmen stated in their written statement
before the Tribunal that "'at present there are no set rules in the
Company in this matter." Their claim was that the retirement age should be
fixed at 60 for all the employees of the Company. According to the Management's
written statement "the existing superannuation system is that the age of
retirement is fixed at 55." The Magagement further stated that the age of
retirement "'as fixed, that is, 55 years" is appropriate and should
not be raised. In respect of this controversy as regards the existing position
there appears to be little material on the record. From the appointment letters
of some of the employees that we find on the record it appears that for some
appointments made in 1955 the age of retirement was mentioned as 55. In the
several letters of appointments made prior to that year no age of retirement
has been mentioned. It is not clear, therefore, how on the question of
retirement age the Tribunal proceeded on the basis that the "existing
retirement" age is 55. Proceeding on this basis the Tribunal directed
"that the existing retirement age at 55 years should continue but the
workers may be allowed to remain in employment and work up to 60 years if found
fit. The question of the further extension 256 should rest with the discretion
of the Management." On behalf of the workmen the learned Attorney-General
has contended that the assumption that the existing retirement age is 55 is
wrong in respect of most of the workmen and that except for a few persons
appointed after 1955 no retirement age is fixed either in the letters of
appointment or in the standing orders of the Company. For all these employees
for whom no retirement age has been fixed already, the learned Attorney-General
argued on the basis of the decision of this Court in Guest Keen, Williams
Private Ltd., v. P. J. Sterling., (1) that it would not be fair to fix any age
of superannuation. It was held in that case that it was unfair to fix the age
of superannuation of previous employees by a subsequent standing order. The
Labour Appellate Tribunal had held that it would be unreasonable and unfair to
introduce a condition of retirement at the age of 55 in regard to the prior
employees having regard to the fact that when they entered service there was no
such limitation. This Court felt that it would not be justified in reversing
this decision of the Labour Appellate Tribunal.
Dealing next with the question whether it
followed that there should be no rule of superannuation in regard to these
previous employees the Court said :
"In our opinion it is necessary to fix
the age of superannuation even with regard to the prior employees, and we feel
no difficulty in holding that it would not be unfair or unreasonable to direct
that these employees should retire on attaining the age of 60. An option to
continue in service even thereafter which the respondent claimed is wholly
unreasonable and is entirely inconsistent with the notion of fixing the age of
superannuation itself. Once the age of superannuation is fixed it may be open
to the employer for special reasons to continue in its employment a workman who
has passed that (1)  1 S.C.R. 348.
257 age : but it is inconceivable that when
the age of superannuation is fixed it should be in the option of the employee
to continue in service thereafter. We would accordingly hold that in the
circumstances of this case the rule of retirement for the previous employees in
the concern should be 60 instead of 55 and that the rule of 55 should apply to
all employees who enter the service of the appellant after the relevant
standing orders came into force." Assuming therefore that for the majority
of the employees there is no existing retirement age it would on the authority
of the above case, be open to the Tribunal to fix the age of superannuation
even with respect to them. As however the Tribunal's decision that this age
should be 55 is vitiated by the incorrect assumption that there is an existing
retirement age of 55 it has been necessary for us to consider the question for
ourselves. It appears that before the Tribunal the Union's representative
himself desired that the retirement age should be fixed at 58 years which may
be extended up to 60 years in fit cases. Before us the Counsel for the Company
did not seriously contest that in consideration of the present day
circumstances in the country it would be fair to fix the retirement age at
58. Accordingly, we set aside the Tribunals
award on this question of retirement age and fix the age at 58 years, subject
to the proviso that it will be open to the Company to continue in its
employment a workman who has passed that age. This rule should apply to all the
employees of the Company.
There remains for consideration the question
of retrospective operation of the award. Under s. 17A of the Industrial
Disputes Act, 1947, an award shall come into operation with effect from such
date as may be specified therein but where no date is so specified it shall
come into 258 operation on the date when the award becomes enforceable.
Even without a specific reference being made
on this question it is open to an industrial tribunal to fix in its discretion
a date from which it shall come into operation.
The reference, in the present case, included
as a matter in dispute the question of retrospective effect in these words :
"Whether all the above demands should be
made applicable retrospectively with effect from April 1, 1956 and what
directions are necessary in this respect ?" The Tribunal rejected the
workmen's claim for giving effect to its award from April 1956. Wherever
however the Tribunal has given relief the Tribunal has directed that the award
should come into effect from the date of reference, i. e., January 23, 1958. On
behalf of the Company Mr. Pathak contends that there is no reason why the award
should be given effect to from any date prior to the date of its pronouncement.
We are not impressed by this argument . No general formula can be laid down as
to the date from which a Tribunal should make its award effective. That
question has to be decided by the Tribunal on a consideration of circumstances
of each case. There have been cases where this Court has made an award
effective from the date when the demand was first made. There are other cases
where the orders of the Tribunal directing the award to be made effective from
the date of the award has not been interfered with. It is true that in some
cases this Court has modified the Tribunal's award in such a case. But it does
not appear however that any general principles have been laid down.
Indeed, it is difficult and not even
desirable that this Court should try to lay down general principles on such
matters that require careful consideration of the 259 peculiar circumstances of
each case for the exercise of discretion. It is sufficient to say that we find
no reason to interfere with the Tribunal's direction in this case that the
reliefs given by it would become effective from the date of the reference.
We therefore allow both the appeals in part
by modifying the Tribunal's award as regards dearness allowance, leave rules
and retirement age and also as regards the adjustment of the interim relief as
mentioned above. In all other matters in appeal before us the award is
confirmed. The modifications made as regards dearness allowance will, as
already stated, take effect from April 1, 1959. The modifications as regards
leave rules and as regards retirement age will take effect from this date. In
both the appeals the parties will bear their own costs.
Appeals allowed in part.