Polychem Limited Vs. R.D. Tulpule,
Industrial Tribunal, Bombay & ANR [1971] INSC 75 (15 March 1971)
DUA, I.D.
DUA, I.D.
VAIDYIALINGAM, C.A.
MITTER, G.K.
CITATION: 1972 AIR 1967 1972 SCR (3) 855 1972
SCC (1) 885
ACT:
LabourLaw-Wage policy-Fixation of allowance-Principles
to be considered.
HEADNOTE:
The demand for vacation allowance of the
workmen of the appellants, at the same rate as was granted to the higher staff,
was granted by the Industrial Tribunal. The Tribunal decided the question on
the basis that the appellantemployer had the financial capacity to stand the
burden of such allowance being granted to the workmen at the rate claimed.
Allowing the appeal and remanding the matter
to be considered afresh by the Tribunal,
HELD : (1) The ultimate object of industrial
adjudication in this country is to help the growth and progress of national
economy; and for realising that object, industrial disputes are settled on
principles of fair play and justice harmonising the conflicting claims of
capital and labour with full awareness of socioeconomic trends of thought.
industrial law in this country, is therefore,
expected to effectively secure, to the workers, conditions of service
reasonably conducive to the improvement of their social and economic standard of
living and their moral and material development. The industrial labour problems
in this country, having their roots in the historical background of social,
economic and political conditions have, little in common with such problems in
the United States or other developed countries. Therefore, the American lines
of thought should not be too readily and indiscriminately followed, [861 D-G]
(2) Wage policy relating to workmen is a complex and sensitive of public
policy, because, the relative status of workmen in the society, their
commitment to industry, their attitude towards the management, their motivation
towards productivity, and their standard and way of life are all conditioned by
wages. It is not a purely economic policy in which an employer and an employee
alone are interested, but the consumer and the society at large and a fortiori
the State, are also vitally interested. No wage policy can ever be applied in
vacuum in disregard of the realities of the social and economic conditions in
our country Considering the question of wages 'in the background of the
Directive Principles in the Constitution, a wage structure should serve to
promote a fair remuneration to labour ensuring due social dignity, personality
and security, a fair return to capital, and strengthen incentives to efficiency
without being unmindful of the legitimate interests and expectations of the
consumer in the matter of prices. Guided by this principle, if the financial
capacity of an industry permits the workers should be allowed a due share in
the prosperity of the industry to which they have contributed by their labour,
so as to enable them, within reasonable limits to improve their standard of
living. [863 D-H] (3) But in the present case, the Tribunal had committed a
serious error in not considering the other allowances and amenities allowed to,
856 respondents-workmen, and comparing their total wage packet with the total
wage packet of those employees to whom the allowance had been allowed when
determining the question. The difference between the amenities allowed to the
workmen and to the staff to whom vacation allowance has been granted must in
law and justice be looked into and the question then decided whether or not the
present workmen's demand is justified. [863 H-864 A, B-C] The principle of
region-cum-industry has no doubt to kept ill view but then the comparable industries
in the region have to considered from all the relevant aspects which have been
laid down by this Court in various decisions. The fact that in the refineries
in the region similar allowance is granted as a result of settlement cannot, on
that account alone be considered to be irrelevant, because, that may
appropriately indicate that the demand of the workmen in those industries not
considered, unjust. [864 B-D] The total Wage packet of the various categories
of employees in the appellant's industry itself, including the question of the
nature of their duties and functions. however, deserves to be given primary
importance. so that. there is no reasonable chance of heart burning and
discontentment amongst the different categories of workmen on account of
differential treatment which, though seemingly justifiable may, in real effect
be discriminatory. [864 D-F] Remington Rand of India Limited v. The Workmen, C.A.
Nos. 856 of 1968, 1475 of 1968 and 2129 of 1968 decided on December 10, 1969.
Alembic Chemical Works Co. Ltd. v. The Workmen, [1961] 3 S.C.R. 297, Delhi
Cloth & General Mill.,; Co. Ltd. v. Workmen, [1969] 2 S.C.R. 307, J. K.
lron & Steel Co. Ltd. v. The Iron & Steel Mazdoor Union Kanpur, [1955]
2 S.C.R. 1315 and Express News Paper (P) LTD v. union of lndia [1959] S.C.R.
12, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 2162 and 2163 of 1970.
Appeals by Special Leave from the Award dated
June 9, 1970 ,of the Industrial Tribunal Maharashtra, Bombay in References
(I.T.) Nos. 284 of 1968 and 19 of 1969.
S.V. Gupte, Mahesh Bhatt, Sunanda Bhandare
and P. H. Parekh, for the appellant (in both the appeals).
K.Rajendra Chowdhary, for respondent No. 2
(in both the appeals).
The Judgment of the Court was delivered by
Dua, J. The short but important point raised in these two appeals by special
leave relates to the validity of that part of the award of the Industrial
Tribunal, Maharashtra, Bombay, by which the demand for vacation allowance of
the workmen of the appellant-, Messrs Polychem Ltd., Bombay, at the same rate
as is granted to its higher staff both at the head office and at its Chambur
857 plant, was allowed. These two appeals are directed against the impugned
award in two references under S. 1 0 ( 1 ) (d) of the Industrial Disputes Act,
1947, one of which (Ref. No. 284 of 1968) related to, the demands of the head
office staff and the other (Reference No. 19 of 1969) to the workmen of Chembur
plant.
The impugned portion of the award dated June
9, 1970. reads as under "The only other demand which is now common to both
the references is the demand for the vacation allowance. It appears that the
company pays to its officers or other staff drawing Rs. 600 and more as basic
wage one month's salary for vacation in case his leave exceeds 15 days and is
not accumulable.
The demand of the workmen is that the minimum
should be Rs. 300 and the maximum Rs. 2,000. It is pointed out for the company
that this was refused by the Tribunals in Burmah Shell and Voltas. The Union on
the other hand contended that it was allowed in the banks and refineries by
settlements though refused by the Tribunals. The plea of discrimination, it was
pointed out, has been rejected by the Tribunals (see Parke Davis, I.C.R.
1966 p. 151 and Alembic Chemical, [1961] 1
L.L.J.
P. 328). 1, however, feel that this company
can afford to pay this allowance to its workmen and avoid dissatisfaction. In
socialistic countries this is considered as an amenity to the workmen which
should be provided such as subsidized or free vacation at health resorts. The
ideal of wage fixation is the living wage while the national ideal was envisaged
in the constitution is a socialistic state. The company can join others as the
trend seems to be appearing in this region. It ensures a more contented and
healthy workmen. I therefore award vacation allowance to the workmen at the
same rate as the staff with the same conditions." The appellant's learned
counsel, Shri S. V. Gupte, challenged this portion of the award on the ground
that there is no evidence in support of the conclusions arrived at by the
Tribunal and that it proceeds on grounds which are irrelevant and contrary to
the settled principles relating to industrial disputes. Nowhere in the region
is vacation allowance granted in similar industries and there is thus no
comparable instance, contended the counsel, adding that the senior assistants
in the present case had also not pressed their claim to vacation allowances. It
was further urged that workmen in the appellant's industry get various other
amenities like,. dearness allowance, according to the revised textile rates,
858 overtime wages, lunch allowance (not allowed to officers), gratuity (with
qualifying period of 5 years as against 15 years for officers), uniforms and
medical facilities. Ourattention was drawn, to a prepared' statement produced
before us on behalf of the appellants for showing the difference in the pay
packet of Workmen employed at the appellant's head office as a result of the
award given in Reference No. IT 284/68. The respondent did not accept this
statement saying that it was based on the interpretation placed by the
appellant to support its case. In regard to overtime allowance and other
facilities referred to by Shri Gupte. the learned counsel relying, inter alia,
on another statement relating to facilities accorded to the workmen in
1970-71produced before us, submitted that the workmen were getting numerous
other benefits not available to officers.
This submission Was however, sought to be
founded on material not on the court record. The learned counsel strongly
contended that the real criterion should have been to look to the overall pay
structure of the workmen in the light of the standard prevailing in similar
industries in the same region. Mere capacity of the appellant to pay should not
be the sole criterion, he added.
Reference was made to the decision of this
Court in Remington Rand of India Limited v. The Workmen (1) where it was
observed :
"As regards the first ground it is true
that in the present case there was no question of the company being unable to
bear the additional burden of lunch allowance. But the fact that an employer is
able to bear the burden is not the criterion. The foundation of the principle
of industry-cum-region is that as far as possible there should be uniformity of
conditions of service in comparable concerns in the industry in the region so
that there is no imbalance in the conditions of service between workmen in one
establishment and those in the Test. The danger otherwise would be migration of
labour to the one where there are more favourable conditions from those where
conditions are less favourable. Therefore, the mere fact that a particular
concern can bear an additional liability would by itself be no ground to impose
upon it such extra obligation. Equally important is the fact that the wage
structure prevailing in the appellant company is indisputably fair and the
dearness allowance paid to the workmen has been, as aforesaid, linked with the
index of cost of living.
These must take care of the rise in the cost
of living from time to time. If, therefore, the company were to be compelled to
pay lunch allowance to ail (1). C,A, Nos. 856 of 1968, 1475 of 1968 and 2119 of
1968 decided on December 10, 1968.
859 workmen including those who work at the
offices it would in fact mean a,, double provision for, the, constituent of the
cost of food already provided for in the wage scales and the rates, of dearness
allowance. The force of this aspect was recognised by this Court in Mcleon
& Co. Ltd. v. Workmen(1)".
It was said on behalf of the respondents that
in the case cited there was no discriminatory treatment in the same concern
among the employees of different grades of salaries at the same place.
The requirements of providing lunch to those
who could not return to the office from outdoor work outside the city limits as
was the fact in the cited case, according to, the respondents, furnish a
distinguishing feature in that case from the present.
Next reliance was placed by Shri Gupte on the
following observations in Alembic Chemical Works Co. Ltd. v. The Workmen ( 2)
"Then it is urged that the provision made by the award for privilege leave
introduces discrimination between the clerical staff covered by the present
reference and operatives covered by the earlier awards made by the samee
Tribunal. We were told that operatives had made a similar claim for privilege
leave before the same Tribunal, and the said claim had been rejected. The
argument is that the provision for privilege leave made by the present award
would create discontent amongst the operatives to whom similar leave has been denied,
and that would disturb industrial peace. We are not impressed by this argument.
It is not seriously disputed that a distinction has generally been made between
operatives who do manual work and clerical and other staff; in fact the
appellant's standing orders themselves make different relevant provisions for
the two categories of its employees.
It is also not disputed that in practice such
distinction is made by comparable concerns, and awards based on the same
distinction are generally made in respect of the two separate categories of
employees. We are, therefore, unable to appreciate the argument that. in
granting privilege leave to the present staff the Tribunal has either
overlooked its earlier award or has made a decision which suffers from the vice
of discrimination. The practice prevailing in comparable concerns and the trend
of awards both seem to show that a distinction is generally made between the
two, categories of employees, and since the said distinction is perfectly
justifiable no question of discrimination can arise." (2) [1961] 3 S.C.R.
297 at 300.
860 According to the respondents the
distinction between operatives doing manual work and clerical and other staff
may be justified but that is not the case here. Besides, in the reported case,
this Court, in its concluding part said, that it was not satisfied that any
case for interference under Art.
136 had been made out whereas in the present
case the appellant wants this Court to interfere and reverse the impugned part
of the award on the ground that it is grossly erroneous and unjust.
Reference was then made on behalf of the
appellant to the decision in Delhi Cloth & General Mills Co., Ltd., v.
Workmen(1), emphasis being laid on the following passage at p. 327 :
"But in the branch of law relating to
industrial relations the temptation to be, crusaders instead of adjudicators
must be firmly resisted. It would not be out of place to remember the statement
of the law made in a different context-but nonetheless appropriate here-by
Doughlas, J., of the Supreme Court of the United States in United Steel Workers
of America v. Enterprise Wheel and Car Corporation (2):
"....... as arbitrator.... does not sit
to dispense his own brand of industrial justice. He may of course look for
guidance from many sources, yet his award is legitimate only so long as it
draws its essence from the collective bargaining agreement.
When the arbitrator's words manifest an
infidelity to this obligation, courts have no choice but to refuse enforcement
of the award.' We may at once state that we are not for a moment suggesting
that the law of industrial relations developed in our country has proceeded on
lines parallel to the direction of the law in the United States." The
respondent, on the other hand, laid more emphasis on the last portion of the
above observations, submitting that the problems of our country in regard to
labour welfare at the present stage of our industrial development, particularly
in the background of our egalitarian socialistic pattern of society as visualised
in our Constitution, are materially different from the labour problems
requiring solution in the developed American society under that country's
constitution. The following passage from pp. 326-327 from he D.C.M.'s case(1)
is also worth quoting:
"We consider it right to observe that in
adjudication of industrial disputes settled legal principles have little play :
the awards made by industrial tribunals, are often the result of ad hoc
determination of disputed questions, (1) [1969]2S.C.R.307.
(2) [1960] 363 U.S. 593.
861 and each determination forms a precedent
for determination of other disputes. An attempt to search for principle from
the law built up on those precedents is a futile exercise. To the Courts
accustomed to apply settled principles to facts determined by the application
of the judicial process, an essay into the un surveyed expanses of the law of
industrial relations with neither a compass nor a guide, but only the pillars
of precedents is a disheartening experience. The Constitution has however
invested this Court with power to sit in appeal over the awards of Industrial
Tribunals which are, it is said, founded on the somewhat hazy background of
maintenance of industrial peace which secures the prosperity of the industry
and improvement of the conditions of work-men employed in the industry, and in
the absence of principles precedents may have to be adopted guides-somewhat
reluctantly to secure some reasonable degree of uniformity of harmony in the
process." In our view the ultimate object of industrial adjudication in
our country is to help the growth and progress of national economy and for
realising that object the industrial disputes are settled on principles of fair
play and justice, harmonising the conflicting claims of capital and labour with
full awareness of the current of socioeconomic trends. of thought. Our
industrial law, is therefore, expected to effectively secure to the workers
conditions of service reasonably conducive to the improvement of their social
and economic standard of living, and their moral and material development. The
existing peculiar problems, relating to industrial labour in our country,
having, their roots in the historical background of our social, economic and
political conditions have little in common with the current labour problems of
America or other developed countries. We must, therefore, guard ourselves
against the temptation of too readily and indiscriminately following the
American line of thought. Shri Gupte next referred us to the decision in J. K.
Iron & Steel Co. Ltd. v. The Iron & Steel Mazdoor Union, Kanpur(1)
relying on the following passage at p. 1 32 "In Bharat Bank Ltd. v.
Employees of Bharat Bank Ltd.(2) this Court held by a majority that though
these Tribunals are not Courts in the strict sense of the term they have to
discharge quasi-judicial functions and as such are subject to the overriding
jurisdiction of this Court under article 136 of the Constitution. Their powers
are derived from the statute that creates them and they have to function within
the limits imposed there (1)[1955]2S.C.R.1315.
(2) [1950] S.C.R. 459, 497.
9-L1061SupCI/72 862 and to act according to
its provisions. Those provisions invest them with many of the 'trappings' of a
court and deprive them of 'arbitrary or absolute discretion and, power. There
is, in our opinion, an even deeper reason which is hinted at in the judgment of
Mahajan J., (as he then was) at page 500 where he says 'that 'benevolent
despotism is foreign to a democratic Constitution'. That, in our opinion, is
the heart of the matter." To give relief to the workmen merely because the
appellant can bear the financial burden is, according to Shri Gupte, it by
these observations. According to the respondents, on the other hand, the
observations relied upon leave to be construed in their own context and so read
they do not prohibit the, industrial adjudication from granting just and fair
remuneration to the labour in lieu of its contribution to the prosperity of the
industry, provided the employer can, consistently with its own fair and just
claim in lieu of its contribution to the prosperity of the industry and without
detriment to its maintenance and betterment, bear the financial burden. The
respondents', learned counsel Shri Chaudhri drew our attention to the admitted
act, that, in the case of, Burmah Shell, Esso and Caltex Refineries, vacation
allowance (which was considered to be identical with travelling allowance) was
gianted to the Workmen by way of Settlement and submitted. that these
industries, though different being refinties, are in the same region and the
general standard 'of. Remunerate of, Workman in that region performing similar
duties and, functions should not. be materially different. The fact, that those
industries granted such allowance by settlement shows that such a demand by the
workman has not been considered by those industries to be un justor
unacceptable. Harmonious standardisation of wages in a region in the absence of
marketed difference in the character of the duties and functions of labour according
to the respondents reduces the factors contributing discontentment and promotes
the chances of the workers' commitment to the industry whereas unjustified
differential-treatment tends to serve as a potential source of industrial
unrest. Shri Chaudhri also referred us to the decision in Express Newspapers:
(P) Ltd.
v. Union of India(1) where at p. 81 it is
observed "It will be seen from this summary of the concepts of the living
wage held in various parts of the world-that there is general agreement that
the living Wage should enable the, male earner to provide for himself and his
family not merely the bare essentials of food, clothing and, shelter but a
measure of frugal comfort including education for the children, protection
against ill-health,, (1)[1959] S.C.R. 12.
863 requirements of essential social needs,
and a measure of insurance against the more important misfortunes including old
age.
Article 43 of our Constitution has also
adopted as one of the Directive Principles of State Policy 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, work, a living wage, conditions
of work ensuring a decent standard of life, and full enjoyment of leisure and
social and cultural opportunities. . . .' This is the ideal to which our social
welfare State has to approximate in an attempt to ameliorate the living.,
conditions of the workers." Shri Gupte, however, emphasised that in India
living wage on standard prevalent in more advanced countries is not possible
the present level of our national income.
Wage policy relating to, workmen appears to
be a co complex and sensitive area of public policy. The reason is plain. The
relative status of workmen in the society, their commitment to industry and their
attitude towards, the management, their motivation towards productivity and
their standard and way of life, are all con by wages. It is according no a
purely economic policy in which the employer and the employee alone are
interest-, ed. Besides the worker and the management, the consumer and the
society at large and a fortiori the State, are also vitally, interested, and no
wage policy can ever be applied in vacuum in disregard of the realities of the
social and economic, conditions in our country. Considering the question of
wages in the background of the Directive Principles enshrined in our
Constitution a wage structure should serve, to promote, a fair remuneration to
labour ensuring due social dignity, personality and security, a fair return to
capital, and strength incentives to efficiency without being unmindful of the
legitimate interest and expectation of the consumer in the, matter of prices.
Guided by this principle, if the financial capacity of the industry permits,
the workers should, broadly speaking, be allowed their due share in the
prosperity of the industry, to which they have contributed by their labour so
as to enable them, within reasonable limits, to improve their standard of living.
Turning now to the facts of the present case
we are clearly of the view that the Tribunal has committed a serious error in
not considering the other allowances and amenities allowed to the 864
respondents-workmen, and comparing their total wage packet with the total wage
packet of those employees to whom the allowance in question has been allowed,
when determining this question. The Tribunal has virtually decided the question
in issue exclusively on the basis that the employer has the financial capacity
to stand the burden of such allowance being granted to the workmen at the same
rate as the higher staff, with the same conditions.
The difference between the amenities allowed
to the workmen and to the staff to whom the vacation allowance is granted must
in law and justice be looked into and the question then decided whether or not
the present workmen's demand is justified. The principle of region-cum-industry
has no doubt to be kept in view but then the comparable industries in the
region have to be considered from all the relevant aspects which have been laid
down by this Court in various decisions to which it is unnecessary to refer,
the principle being well settled. The fact that in, the refineries in the
region similar allowance is granted as a result of settlement cannot, on that
account alone be considered to be irrelevant because that may appropriately
indicate that the demand of the workmen in those industries was not considered
unjust. But to what extent that should weigh with the Tribunal is for the
Tribunal to decide in the light of all the relevant circumstances. The, total
wage packet of the various categories of employees in the appellant's industry
itself, including the question of their nature of duties and functions,
however, deserves to be given primary importance so that there is no
reasonable, chance of heart-burning and discontentment amongst the different
categories of workmen on account of the differential treatment which, though
seemingly justifiable, may, in real effect. be discriminatory., The importance
of appropriate standardisation of wages in the appellant-industry on a proper
consideration of the duties and functions of the different categories of
employees must be kept in view in deciding the present dispute.
We would accordingly allow the Appeals, set
aside the award and remit the case back to the Tribunal with a direction to
decide the dispute after considering all the relevant factors as suggested. In
the peculiar circumstances of the case there is no order as to costs.
V.P.S.
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