Workmen of Balmer Lawrie and Co. Vs.
Balmer Lawrie and Co  INSC 216 (7 November 1963)
07/11/1963 GAJENDRAGADKAR, P.B.
GUPTA, K.C. DAS
CITATION: 1964 AIR 728 1964 SCR (5) 344
R 1967 SC1286 (8) RF 1969 SC 513 (15,22,23)
RF 1970 SC 512 (10) RF 1972 SC1210 (15) R 1972 SC2332 (74,118) RF 1973 SC2758
(16) R 1978 SC1113 (14) R 1987 SC1415 (12)
Industrial Dispute-Clerical and subordinate
staff-Age of retirement-Reduction of grades-Wage structure-Conditions for
re-examination-Revision of wage scales-Principles--Res
judicata-Applicability-Comparable character of industrial undertakings
Industrial disputes arose between the
respondent and its employees the appellants. The appellants demanded the
reduction of the existing five grades into two grades, increase in the scales
of pay, privilege and medical leave and increase of the existing age of
retirement which was 55.
The Tribunal rejected all the demands of the
appellants, but allowed an increase of Rs. 10 in the initial salary of all
grades. In appeal by special leave:
Held: The age of retirement in case of the
respondent's workmen should be increased to 58. Time has now come for
increasing the age of retirement in the case of clerical staff and subordinate
staff generally from 55 to 58.
Guest, Keen Williams Private Ltd. v. P.J.
Sterling, (1960.) 1 S.C.R. 348 and Workmen of M/s. Jessop & Co. Ltd. v. M/s
Jessop & Co.,  I.L.L.J. 451 1961, followed.
(ii)In the present case having regard to the
genesis and the manner in which these grades have functioned since 1949, it is
not necessary to make any adjustments in the grades by reducing their number.
(iii)The question as to the revision of wage
scales must be examined on the merits in each individual case.
Technical considerations of res judicata
should not be allowed to hamper the discretion of industrial adjudication.
The principle of gradual advance towards the
living wage which industrial adjudication can never ignore, itself constitutes
such a special feature of industrial adjudication that it renders the
application of the technical rule of res judicata singularly in appropriate.
If the paying capacity of the employer
increases or the cost of living index shows an upward trend, or there are other
anomalies, mistakes, or errors in the award fixing wage structure, or there has
been a rise in the wage structure in comparable industries in the region,
industrial employees would be justified in making a claim for the
re-examination of the wage structure and if such a claim is referred for
industrial adjudication, the Adjudicator would not normally be justified in
rejecting it solely on the ground that enough time has not passed after the
making of the award, or that material change in 345 relevant circumstances had
not been proved. It is, of course not possible to lay down any hard and fast
rule in the matter. The question must be examined on the merits in each case.
Burn & Co. Ltd. v. Their Workmen (1959) 1
L.L.J. 450 and James Finley & Co. Ltd. Employees Union, Calcutta v. M/s. James
Finley & Co. Ltd. Calcutta, 1957 L.A.C. 154, referred to.
In dealing with industrial matters,
industrial adjudication should not normally encourage technical pleas and
having regard to the fact that cases are conducted before the Tribunal many
times by laymen, the significance or the importance of the argument that a
particular question is not put to a particular witness should never be
(iv)In dealing with the comparable character
of industrial undertaking, industrial adjudication does not normally rely on
oral evidence alone. This question is considered in the light of material facts
and circumstances which are generally proved by documentary evidence. The total
capital invested by the concern, the profits made by the concern the dividends
paid, the number of employees, the standing of the concern in the industry,
these and other matters have to be examined in determining whether one concern
is comparable with another in the matter of fixing wage, and these questions
cannot be decided merely on the interested testimony of either the workmen or
the employer and his wit- nesses.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 820 of 1962.
Appeal by special leave from the award dated
June 29, 1961, of the First Industrial Tribunal, West Bengal in Case No. VIII-608
P.K. Sanyal and P.K. Mukherjee, for the
B. Sen, S. Ghosh and B.N. Ghosh, for the
respondent No. 1.
November 7, 1963. The Judgment of the Court
was delivered by GAJENDRAGADKAR J.-An industrial dispute between the
respondent, M/s Balmer Lawrie & Co., and its employees, the appellants, has
given rise to the present appeal by special leave. The dispute related to four
demands made by the appellants and it was referred for adjudication by the
Government of West Bengal to the Industrial Tribunal constituted under section
7A of the Industrial Disputes Act, 1947. These demands were: grades 346 and
scales of pay, privilege leave, medical leave and retiring age. In regard to
the claim of the appellants for reducing the existing five grades into two
grades organised on a rational and scientific basis, the Tribunal held that, on
the whole, . the grades seemed to function satisfactorily, and so, no case had
been made out for their amalgamation. The demand for increase in the scales of
pay was substantially rejected by the Tribunal, but it held that the appellants
should be given some relief by increasing the initial salary of all the grades
by Rs. 10. The claims for privilege leave and medical leave were rejected by
the Tribunal; it held that the mere fact that two concerns in the neighborhood
had agreed to give more than 21 days' privilege leave, was no justification for
changing the present rule as to privilege leave which governed the appellants,
and as to medical leave, the Tribunal held that the construction which the
respondent was placing on the relevant rule contained in Exbt. F was
inadmissible, and so, there was no necessity for introducing any rule that the
production of a medical certificate from any medical practitioner should
suffice. The Tribunal then examined the appellants' claim as to the retirement
age and it held that the existing age of retirement which was at 55 needed no
change. An award was accordingly passed in the light of the findings recorded
by the Tribunal on the four demands made by the appellants. It is this award
which is challenged by the appellants before us.
In respect of the age of retirement, the
approach adopted by the Tribunal appears to be unsatisfactory. This question
has been considered by this Court on several occasions. In Guest, Keen,
Williams Private Ltd. v. P.J. Sterling.& Ors.(1) this Court has discussed
in a general way the considerations which are relevant and material in
determining a proper age for superannuation in industrial employments. As has
been observed by this Court recently in the case of Workmen of M/s Jessop &
Co. Ltd. v. M/s Jessop & Co. & Ors. (2) (1)  1 S.C.R. 348.
(2)  1 L.L.J. 451.
347 we feel that the time has now come for
increasing the age of retirement in the case of clerical staff and the
subordinate staff generally from 55 to 58. It appears that the attention of the
Tribunal was not drawn to the relevant decisions of this Court; otherwise, the
Tribunal would not have rejected the appellants' claim. In fact, in the present
appeal, Mr. Sen for the respondent has agreed that the, age of retirement
should be increased from 55 to 58.
We accordingly reverse the order passed by
the Tribunal in that behalf and direct that the age of retirement in the case
of the respondent's workmen should be 58 and not 55 as from the date of this
That takes us to the question about the
reduction of the grades from 5 to 2. Mr. Sanyal for the appellants contends
that generally two 'grades are adopted by industrial concerns and he urges that
the presence of five grades is both unscientific and inexpedient. It may be
conceded that two or three grades are generally adopted by industrial concerns'
but in the present case, it is necessary to bear in mind the previous history
of the creation of these grades and to take into account the fact that these
five grades have, on the whole, satisfactorily functioned in the concern of the
respondent. In the award pronounced between the parties, in 1949, these five
grades were evolved. Floormen who are mentioned in the award correspond to Grade
I which is described as the Sub-grade in the respondent's concern.
Then we have the remaining four grades
described as Junior Grade, Senior Grade, Section Head Grade and Supervisor
Grade. These correspond to the four grades Nos. 11, 111, IV & V in the respondent's
concern. Since 1949, these grades have been maintained by the respondent. That
is the genesis of the 5 grades.
It cannot be seriously disputed that the
employees working in the Sub-grade which is Grade I are entrusted with a
distinctly inferior type of work and they cannot be integrated with Grades II
or III. Then as to Grades 11 and 111, it is significant that there is automatic
promotion from one to the other 348 (Annexure D). This automatic promotion is,
of course, subject to the condition that the Clerks concerned have satisfactory
service records and it is granted on the clear understanding that they would
continue to undertake Grade 11 duties. It also appears that a Clerk who joined
the company in Grade 1 and was placed in Grade 11 prior to the abolition of
Grade 1, or on the date when this Grade was abolished, would be automatically
promoted and fitted in the next higher Grade, subject to the conditions
mentioned in the rule. Thus, it is clear that between Grades 11 and III which
might have been amalgamated into one Grade, there is automatic promotion. This
method has the advantage of enabling the employer to recognise outstanding
merit in a Clerk working in the lower grade by promoting him straight- away to
the higher grade. The appellants have not suggested that such promotions in
recognition of outstanding service and efficiency have never been given, nor
have they alleged that they have been given for improper reasons. As to Grades
IV and V, they are in the nature of selection grades and the work entrusted to
the employees in the two grades is of such a distinctive character that it
would be unreasonable to think of amalgamating them into one grade.
Therefore, we are satisfied that having
regard to the genesis of the five grades which prevailed in the respondent's
concern and the manner in which these grades have functioned since 1949, it is
not necessary to make any adjustments in the grades by reducing their number.
Accordingly, we think the Tribunal was right
in refusing to accept the demand of the appellants to reduce the grades from
five to two.
The next question to consider is one in
regard to the increase 'in the scales of pay. The Tribunal has rejected this
claim on the ground that no material change had been proved in the relevant
circumstances since the scales were previously fixed. It appears that when the
grades were first determined by an award in 1949, they operated for three
years; then a revision 349 was made in 1952 and another revision was effected
By these revisions, modification has been
made in the maximum salary payable to the employees in the different grades,
but the minimum remained unchanged. That is why the Tribunal has made an ad hoc
addition of Rs. 10 to the minimum salary in the respective grades. The Tribunal
thought that this modification would meet the ends of justice. The other reason
given by the Tribunal for rejecting the claim is that the plea of the high
increase in the cost of living on which the appellants relied was not valid,
because dearness allowance was paid to the appellants under the Bengal Chambers
of Commerce Formula and that, the 'tribunal thought, answered the appellants'
contention about the rise in the cost of living. The appellants also relied on
an agreement between the parties and urged that by virtue of the said
agreement, they were entitled to claim a revision of the wage scale, because
four comparable concerns in the region had in the meanwhile revised their wage
scales. The Tribunal was not impressed by this plea either.
It is these findings recorded by the Tribunal
that need to be examined in the present appeal.
Taking the first argument that there has been
no change in the circumstances, the Tribunal has relied upon two decisions in
support of the view that unless a material change in circumstances is proved,
there can be no change in the wage structure. In Burn & Co. Ltd. v. Their
Workmen & Ors.(1), this Court has observed that in the absence of anything
to show that between 1950 and 1955 when the present industrial dispute was
referred for adjudication, circum- stances had so altered to make the existing
scales of pay and grades unreasonable or inadequate to meet the conditions
prevailing at the time the industrial dispute had been referred to the
Tribunal, it must be held that any revision of the existing wage-scales or
grades was unjustified.
Similarly, in James Finlay & Co. Ltd.
Employees' Union, Calcutta v. M/s. James (1)  1 L.L.J. 450.
350 Finlay & Co. Ltd., Calcutta(1), the
Labour Appellate Tribunal observed that though the principles of res judicata
bad no application to adjudication on industrial disputes, on principle, a
previous award should not be changed, except on justifiable grounds. The
Appellate Tribunal then proceeded to observe that some of the grounds on which
the award can be changed are: change of circumstances, principle of gradual
advance to the living wage; anomaly, mistake or error in the last award
involving hardship to either party or both.
While dealing with the question about the
revision of wage scales, it is necessary to remember that the technical
considerations of res judicata should not be allowed to hamper the discretion
of industrial adjudication. It is undoubtedly true that wage scales are devised
and wage structures constructed as matters of long-term policy, and so,
industrial adjudication would naturally be reluctant to interfere with the wage
structures without justification or in a lighthearted manner. When a wage
structure is framed, all relevant factors are taken into account and normally
it should remain in operation for a fairly long period; but it would be
unreasonable to introduce considerations of res judicata as such, because for
various reasons which constitute the special characteristics of industrial
adjudication the said technical considerations would be inadmissible. As the
Labour Appellate Tribunal itself has observed, the principle of gradual advance
towards the living wage which industrial adjudication can never ignore, itself
constitutes such a special feature of industrial adjudication that it renders
the application of the technical rule of res judicata singularly inappropriate.
If the paying capacity of the employer increases or the cost of living shows an
upward trend, or there are other anomalies, mistakes or errors in the award
fixing wage structure, or there has been a rise in the wage structure in
comparable industries in the region, industrial employees would be justified in
making a claim for the re-examination of the wage structure and if such a claim
is referred for industrial adjudication, the Adjudicator would not normally be
justified in rejecting it solely on the ground that enough time has not passed
after the making of the award, or that material change in relevant circumstances
bad not been proved. It is, of course, not possible to lay down any hard and
fast rule in the matter. The question as to revision must be examined on the
merits in each individual case that is brought before an adjudicator for his
Then as to the rise in the cost of living,
the Tribunal has no doubt observed that having regard to the fact that dearness
allowance is paid to the appellants' under the Bengal Chambers of Commerce
formula, the appellants' plea was not valid; but it does not appear that the
Tribunal has considered the question as to whether the said formula affords
complete neutralisation to the employees against the rise in the cost of
living. We propose to express no opinion on this point, but we are concerned to
point out that unless the Tribunal had examined the matter carefully and bad
come to the definite conclusion that the formula in question gave nearly
complete neutralisation against the rise in the cost of living, it would be
unreasonable to hold that because the Chamber formula is adopted by the
respondent for payment of dearness allowance to its employees, the complaint of
the appellants that there has been a rise in the cost of living and so, their
wage structures should be revised, has no substance. This is a matter which has
to be carefully examined before any conclusion is reached in a satisfactory
That leaves another Point to be considered
and it has reference to the agreement between the parties on which the
appellants relied. In 1955, when by agreement the wage scales were revised, the
parties agreed that the pay scales then introduced would remain unchallenged
"unless amended by any Mercantile Omnibus Tribunal or any legislation
prescribing higher rates of pay, or in the event of any substantial enhancement
of scales of pay being effected generally 352 in other Mercantile Firms of
Balmer Lawrie & Co. Ltd.'s standing,. or in the event of any extraneous
circumstances arising resulting in a general demand for further enhancement of
the scales of pay." The appellants contended that wage scales had been
recently revised by the Imperial Tobacco Co. Ltd., Shaw Wallace Co., Voltas Co.
and Tata Iron & Steel Co., and in support of this plea, they examined four
witnesses who proved the revised scales of wages. The argument was that these
concerns are comparable concerns and since there has been a revision of wage
scales in these concerns, the appellants were entitled to claim a revision of
their wage scales in accordance with the terms of the agreement. After the
appellants led their evidence in proof of the fact that the four concerns had
revised their pay scales, the respondent examined some witnesses on its behalf.
Amongst these witnesses was Kamal Prasad Sircar.
In his evidence he mentioned the names of six
firms which, according to him, were comparable with the firm of the respondent.
Amongst these firms, he did not include any of the four firms referred to by
the appellants. The Tribunal took the view that since Sircar was not
cross-examined on the question as to whether any of the said four firms are
comparable to the respondent's concern, the plea of the appellants that the
said firms are comparable must be rejected. In our opinion, the reason given by
the Tribunal in rejecting the appellants' claim is wholly unsatisfactory and
the approach adopted by it in dealing with this matter inappropriate. In
dealing with industrial matters, industrial adjudication should not normally
encourage technical pleas and having regard to the fact that the cases are
conducted before the Tribunal many times by laymen, the significance or the
importance of the argument that a particular question is not put to a
particular witness should never be exaggerated. Besides, the Tribunal has
overlooked the fact that though evidence was led by the appellants in respect
of the four concerns obviously on the ground that they were comparable
concerns, Sircar did not positively take the oath that they were not comparable
concerns, and so, it would 353 not be reasonable to make a finding against the
appellants on the ground that Sircar was not asked any question about it.
Besides, it is necessary to emphasise that in
dealing with the comparable character of industrial undertakings, industrial
adjudication does not usually rely on oral evidence alone. This question is
considered in the light of material facts and circumstances which are generally
proved by documentary evidence. What is the total capital invested by the
concern, what is the extent of its business, what is the order of the profits
made by the concern, what are the dividends paid, how many employees are
employed by the concern, what is its standing in the industry to which it
belongs, these and other matters have to be examined by industrial adjudication
in determining the question as to whether one concern is comparable with
another in the matter of fixing wages. Now, it is obvious that these questions
cannot be decided merely on the interested testimony either of the workmen, or
of the employer and his witnesses.
Unfortunately, the Tribunal has lost sight of
this important feature. Therefore, we are satisfied that the Tribunal was in
error in refusing to consider the merits of the appellants' claim in regard to
the modification and increase in the wage scales.
In regard to the appellants' grievance in
respect of privilege leave and medical leave, we see no substance.
The result is, the award rejecting the
appellants' claim for modification and revision of the wage scales is set aside
and the matter is sent back to the Tribunal for disposal of this issue in
accordance with law. Parties would be at liberty to lead additional evidence in
support of their respective cases. The order made by the' Tribunal giving ad
hoc increase of Rs. 10 in the initial salaries fixed for different grades is
confirmed. The other directions given by the award in respect of the other
claims made by the appellants are also confirmed. Having regard to the fact
that 1 SCI/64-23 354 the appellants have succeeded in respect of the retirement
age and that an order of remand has been passed by us in their favour for a
reconsideration of their claim as to revision of the wage scales, we direct
that the respondent should pay the appellants their costs in this Court.
Award partly set aside and case remanded.