Tata Chemicals Ltd. Vs. Its Workmen
[1978] INSC 72 (23 March 1978)
SINGH, JASWANT SINGH, JASWANT KRISHNAIYER,
V.R.
CITATION: 1978 AIR 828 1978 SCR (3) 635 1978
SCC (3) 42
CITATOR INFO :
D 1981 SC2163 (7)
ACT:
Industrial Disputes Act 1947-Sec. 2(k)(P),
18-Settlement not arrived at otherwise than in course of conciliation whether
binds all workmen--Whether accepting benefit of a settlement amounts to
acquiescence-Whether Govt. can refer a dispute at the instance of a minority
union.
Industry cum region-If no comparable concern
in the region.
HEADNOTE:
The appellant, a_Public Limited Company has
its factory at Mithapur in the State of Gujarat. it was carrying on its
dealings with Sangh which was. a recognised Union till 25-1- 1973. Later on
Employees Union came to be recognised under the Code of Discipline, in view of
the fact that it had 55 per cent of the total number of employees as its
members.
The appellant accorded recognition to the
Employees Union with effect from 25-1-1973. On 18-6-1973 the Employees Union
submitted a charter of demands which, inter alia, included a demand for
dearness allowance at 100 per cent of Ahmadabad Cotton Textile rate. Meanwhile,
on 9-7-1973, the Sangh representing 800 workmen of the concern also submitted
its charter of demands which included a demand for dearness allowance as paid
to the workmen of the Cotton Textile Industry. The appellant arrived at, an
agreement with the Employees Union in respect of the demands submitted by the
latter. It was agreed between the parties that the settlement would remain in
force for a period of 3 years with effect from 1st January, 1974. On 21-1-1975
the State Government made a reference to the Industrial 'tribunal for
adjudication of the dispute raised by the Sangh. Before the Industrial Tribunal
the Employees Union questioned the right of Sangh to raise the demand with
regard to the variable dearness allowance as also the right of the Govt. to
refer the demand for adjudication. Later on, the Employees Union abandoned its
initial stand and supported the demand of the Sangh on the ground that the
appellant had made huge profits. The appellant contended that in view of the
settlement with the Employees Union, the Sangh was precluded from raising any
dispute which was the subject matter of reference to the Tribunal. It also
contended that as the benefit accruing from the settlement had been and was
being taken by all the workmen the reference was incompetent. The demand for
variable dearness allowance was also opposed by the appellant on the ground
that the employees were being paid dearness allowance in accordance with the
recommendation of the Central Wage Board.
On an examination of the material adduced
before the Tribunal it came to the conclusion that the appellant Company was a
flourishing and a highly integrated chemical complex of long standing whose
profits were continuously rising; that no other unit in the Heavy Chemicals
Industry in the region could be favorably compared with the appellant. Company;
that the industries in other parts of.
Gujarat which are included in the list of
Heavy Chemicals Factories governed by Wage Board were paying 100 per cent of
the dearness allowance linked to by Ahmadabad cost of living index. The
Tribunal awarded dearness allowance I varying from 85 per cent to 95 per cent
of the Ahmadabad Textile dearness allowance.
In an appeal by special leave, the appellant
contended (1) In view of the settlement with the Employees Union which covered
the demand for variable dearness allowance and the fact that the benefit
accruing from the settlement was taken by the entire body of workmen, the
reference by the State Government as regards variable dearness allowance was
invalid, and the Tribunal had no jurisdiction to adjudicate upon the same.
536 (2) The Tribunal has erred in ignoring
the industry-cum-region principle while fixing the variable dearness allowance.
The respondent contended (1) The settlement
did not cover the demand regarding variable dearness allowance sponsored by the
Sangh.
(2) In any event, the said settlement was
binding only on the parties thereto and the Sangh not being a signatory to the
settlement was not bound by it.
(3) It was open to a minority Union to
sponsor the demand and for the, Government to make the reference on the basis
of such demand.
(4) Since there were no comparable concerns
in the region the Industrial Tribunal was right in taking into consideration
the dearness allowance paid by concerns in other parts of Gujarat.
Dismissing the appeal
HELD: 1. An analysis of section 2(p) of the Industrial
Disputes Act, 1947 which defines settlement and section 18 of the Act show that
a settlement which is arrived at otherwise than in the course of conciliation
proceedings is.
binding only on the parties to the settlement
who have subscribed to it in the prescribed manner. [541 E-F, 542 E] Bata Shoe
Co. (P) Ltd. v. D. N. Ganguly and Ors., [1961] 3 S.C.R. 308, referred to. Ramnagar
Cane and Sugar Co. Ltd. v. Jatin Chakravorty & Ors.
[1960] 3 S.C.R. 966 and The Jhagrakhan
Collieries (P) Ltd.
v. Shri G. C. Agrawal, Presiding Officer,
Central Government Industrial Tribunal-cum-Labour Court, Jabalpur and Ors.,
[1975] 3 S.C.C. 613, referred to.
2. In the present case since the agreement
was not arrived at in the course of conciliation it could not bind anyone other
than the parties thereto. The fact that the Employees Union which had been duly
recognised under the Code of Discipline arrived at the agreement with the
appellant Company could not operate as a legal impediment in the way of the
Sangh which was not a party to the agreement to raise a demand or dispute with
regard to the variable dearness allowance limited to Ahmadabad cost of living
index or affect the validity of the reference by the Government or the
jurisdiction of the Court to go into the dispute. [543 E-F]
3. A minority union can validly raise an
industrial dispute is clear from section 2(k) [543 G] Dharampal Premchand v.
M/s. Dharampal Premchand (Saughandhi) [1965] 3 S.C.R. 394; relied on.
4. The acceptance of benefit under an
agreement by workers who are not parties to the agreement cannot amount to
acquiescence. Even if 99 per cent of the workers have impliedly accepted the
agreement it will not put an end to.
the dispute before the Labour Court and make
it functus officio. [544 C-D] Jhagrakhan Collieries (P) Ltd. v. Shri G. C.
Agrawal, Presiding Officer, Central Government Industrial Tribunal- cum-Labour
Court, Jabalpur and Ors., [1975] 3 S.C.C. 613, relied on.
5. It is a matter of common knowledge that
the spiral of prices has been constantly rising and the basket of goods and
services has been costing more and more day after-day since the out-break of
the Second World War in September 1939. The appellant Company holds a unique
position in Heavy Chemicals in 537 the region. It is for this that the
Industrial Tribunal was constrained to turn to similar industries in Gujarat
and found that Sarabhai Chemicals Baroda was the nearest similar industry which
can legitimately serve as comparable concern.
[544 F, 545 A-B] Ahmadabad Mill Owners'
Association etc. v. The Textile Labour Association, [1966] 1 S.C.R. 382, relied
on.
6. When there is a large disparity between
the two concerns engaged in the same line of business in a region with which
the Industrial Court is dealing it is not safe to fix the same wage structure
for the large flourishing concern of long standing as obtains in a small
struggling concern. [546 A-B] Bengal Chem' ;cat and Pharmaceutical Works Ltd.
v. Its Workmen & Anr., [1969] 1 I.L.J. 751 a p. 758, French Motor Car
Company Ltd. v. Their workmen, [1962] 2 L.L.J. 744;
relied on.
7. It cannot also be lost sight of that with
the march of time narrow concept, of industry-cum-region is fast changing and
too much importance cannot be attached to the region. The modern trends in
industrial law seem to lay greater accent on the similarity of industry rather
than on the region. [546 B-C] Workmen of New Egerton Woollen Mills v. New
Egerton Woollen Mills and Ors., [1969] 2 L.L.J. 782, relied on.
8. As in the instant case, there was no
comparable concern engaged in the line of business similar to that of the
appellant in the Saurashtra region, the 'Industrial Tribunal did not commit any
error in taking into, consideration for the purposes of comparison Dearness
Allowance paid by Sarabhai Chemicals and other concerns of the like or
approximate like magnitude in other parts of the 'State of Gujarat. [546 E]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 2160 of 1977.
(Appeal by Special Leave from the Award dated
21-2-77 of the Industrial Tribunal Gujarat in Reference I.T. No. 13 of 1975
published in the Gujarat Govt. Gazette dated 17th March', 1977).
G. B. Pai, O. C. Mathur & K. J. John for
the appellant.
V. M. Tarkunde, K. L. Hathi, P. C.Kapur &
S. C. Patel for the respondent.
The Judgment of the Court was delivered by
JASWANT SINGH. J. This appeal by special leave is directed against the award
dated February 21, 1977 of the Industrial Tribunal Gujarat in reference No. 13
of 1975 made on January 21, 1975, by the Government of Gujarat in exercise of
its powers under section 1O (1) (d) of the Industrial Disputes Act. 1947 (XIV of
1947) (hereinafter, called 'the Act') for adjudication of the dispute relating
to five demands ,viz.
Washing Allowance, Woollen Jersey Unclean
Allowance, Trans- port Allowance and Variable Dearne is Allowance linked with Ahmadabad
cost of living index and adequate dearness allowance ,equal to that of textile
workers of Ahmadabad (which is 100 neutralisation) sponsored by the. Chemicals
Kamdar Sangh, Mithapur (hereinafter referred to as 'the Sangh).
Briefly stated, the facts leading to the
appeal are : The appellant .is a public limited company registered under the
Indian Companies .Act and has its factory at Mithapur in he State of Gujarat.
As per its practice and policy of recognising and negotiating with the Union
538 enjoying the support of largest number of its workers, it carried on its
dealings with the Sangh (which was the recognised union) till January 25, 1973
when the Assistant Commissioner of Labour, Ahmadabad declared as a result of
the verification made by him that the 'rata Chemicals Employees' Union
(hereinafter referred to as 'the Employees' Union) was entitled to be
recognised under the Code of Dis- cipline in view of the fact that 55% of the
total number of the employees of the concern were its members and addressed a
communication to the appellant requesting it to recognise the said union.
Pursuant to this communication, the appellant accorded recognition to the
Employees' Union with effect from January 25, 1973. Thereupon the Sangh filed a
Special Civil Application challenging the aforesaid order of the Assistant
Commissioner of Labour in the High Court of Gujarat which was summarily
rejected vide order dated April 3, 1973. On June 18, 1973, the Employees Union
submitted a charter of demands to the appellant which included inter alia a demand
for dearness allowance at 100% of Ahmadabad Cotton Textile Rate popularly known
as the Textile Dearness Allowance. In respect of these demands, the
Conciliation Officer summoned a consolatory meeting for July 26, 1973.
Meanwhile on July 9, 1973, the Sangh
representing about 800 workmen of the concern submitted tile aforesaid charter
of demands before the management which also included a demand for Dearness
Allowance as paid to the workers of the Cotton Textile Indus try. The charter
also contained an intimation to the management of the Sangh's intention to
resort to strike for realisation of its demands. As negotiations between the
parties for an amicable settlement did not prove fruitful, the Sangh wrote to
the Conciliation Officer, Rajkot, on July 17, 1973 requesting him to intervene.
After preliminary discussions with both the parties, the Conciliation Officer
admitted the case for conciliation on August 30, 1973. As the conciliation
proceedings held by him from time to time between September 7, 1973 and
November 6, 1973 (to which the Employees' Union was also made a party at its
request) did not lead to a settlement between the parties,. the Conciliation
Officer submitted his Failure Report to the State Government on December 14,
1973. on even 1 date, the appellant arrived at an agreement with the Employees'
Union in respect of the demands submitted 'by the latter on behalf of its daily
rated and monthly rated members including clerical staff. It was agreed
'between the parties to this settlement that it would remain in force for a
period of three years with effect from January 1974.
A notice with regard to the settlement with
the Employees Union was put up on general notice board by the appellant on
December 17, 1973. On January 21, 1975, the State Government made, as already
stated, 'a reference to the Industrial Tribunal for adjudication of the dispute
respecting the aforesaid demands raised by the Sangh. In the course of the
reference proceedings, the Employees' Union adopted a nebulous and shifting
stand. In its anxiety to maintain its status as the recognised majority union
having the sole right of collective bargaining and settling industrial
disputes, it insisted in the first instance on its right to actively
participate in the proceedings and inter alia questioned the right of the Sangh
to raise the demand with regard to V.D.A.. as also the right of the Government
to refer the demand for adjudication 539 alleging that earlier in 1968 when it
raised a demand for 100% Textile Dearness Allowance, the Sangh resisted the
same and entered into a settlement with the appellant Company on July 31, 1969
for a period of five years. Later on abandoning its initial stand, it supported
the demand of the Sangh averring that having regard to the huge profits made by
the appellant Company over the years, the workmen were entitled to payment of
Dearness Allowance not only on the lines of the Textile Dearness Allowance but
a still higher Allowance like that of the employees in the Bombay Head Office
of the appellant Company In the written statement filed by it, the appellant
Company not only challenged the locus standi of the Employees' Union to raise
any demand on behalf of the workmen or to support the demands raised by the
Sangh in view of the aforesaid- settlement dated" December 14, 1973 but
also maintained that in view of the said settlement which continued to be in
operation, the Sangh was precluded from raising any dispute in respect of the
demands which are the subject of reference to the Tribunal for adjudication. It
further contended that as the benefit accruing from the settlement had been and
was being taken by all the workmen, the reference was incompetent and the
Tribunal had no jurisdiction to adjudicate upon' the demands incorporated
therein. While it resisted the first four demands raised by the Sangh on mere
technicalities, with regard to the demand for Variable Dearness Allowance, the
appellant company averred that in view of the fact that all the employees were
being paid Dearness Allowance in accordance with the recommendation of the
Central Wage Board for the Heavy Chemicals and Fertiliser Industry and that
neutralisation in the increase in cost of living under the said scheme of
payment in case of group-1 factories was not sent per cent but was equivalent
to 92 per cent, the demand for Variable Dearness Allowance was not valid. The
appellant further urged that in the matter of fixtion of Dearness Allowance,
the formula of Industry-cum-Region was to be adhered to and the total pay
packet of the comparable concerns in the region had to be taken into
consideration.
On an examination of the material adduced
before it including the facts and figures relating to the appellant Company's
investments, reserves, production, percentage of wages of workers, profits and
declared dividends etc., the Industrial Tribunal came to the conclusion that
the appellant Company was a very flourishing and highly integrated chemical
complex of long standing, whose profits were continually rising; that no other
unit in the Heavy Chemicals Industry in the region could he favourably compared
with the appellant Company so far as the extent and nature of production,
business and financial capacity were concerned; that the industries in other
parts of Gujarat like Sarabhai Chemicals, Baroda, Anil Starch, Ahmadabad,,
Alembic Chemicals Works, Baroda, Attul Products Bulsar and Ahmadabad
Manufacturing & Calico Printing Co. Ltd. Chemical Division, Ahmadabad which
were included in the list of heavy chemicals factories covered by Wage Board
were paying 100 per cent of the Dearness Allowances linked to the Ahmadabad
cost of living index number known as 540 Textile Dearness Allowance and that
the total pay packet which was being paid to the workers of Mithapur where the
prices of essential commodities were comparatively higher than at any other
place in the district like Jamnagar, Dharangadhra, ProbandaBhavnagar was much
less than Sarabhai Chemical, Baroda, and disallowing the objections raised by
the appellant Company and considering the Textile Dearness Allowance as a
scientific formula faithfully reflecting the rise and fall in the consumer
price index for working class which afforded maximum protection to the
workmen,in the lowest basic wage slab adopted the same, and inter alia directed
the appellant Company to pay to all the concerned employees including the daily
rated workmen in different categories in Grades I, III, V, VI, VII & VIII
and the monthly rated clerical, technical and supervisory staff falling in
Grades V, VI & VII uniform Dearness Allowance varying from 85% of the Ahmadabad
Textile Dearness Allowance (old) to 95 % of the Ahmadabad Textile Dearness
Allowance as before the old revision phased over a period of three years
beginning from February 1, 1975 that is to say at 85% from February 1, 1975 to
December 31, 1976 and 95% from January 1, 1977 and onwards.
Appearing on behalf of the appellant, Mr. Pai
has addressed us only in regard to the Sangh's demand and the Tribunal's award
in respect of Variable Dearness Allowance. HO has contended that regard being
had to the fact that the aforesaid settlement dated December 14, 1973 between
the appellant Company and the Employees Union covered the demand regarding
V.D.A. sponsored by the Sangh and the benefit accruing from the settlement was
taken by the entire body of workmen, the aforesaid reference by the State
Government as regards the V.D.A. was invalid and the Tribunal had no
jurisdiction to adjudicate upon the same,. He has further urged that in fixing
the V.D.A., the Tribunal has erred in ignoring the industry-cum-region
principle which is well recognised in the industrial world.
Mr. Tarkunde has, on the other hand, urged
that the aforesaid settlement dated December 14, 1973 did not cover the demand
regarding V.D.A. sponsored by the Sangh; that in any event, the said settlement
was binding only on the parties there and the Sangh not being a signatory to
the settlement, it was perfect.y open to it even though it was a minority union
to sponsor the demand in question and to the Government to make the reference.
He has further contended that there being no comparable concern in the region,
the Industrial Tribunal was right in taking into consideration the Dearness
Allowance paid by Sarabhai Chemicals and other concerns in other parts of
Gujarat Five questions arise for consideration in this case.-(1) Whether the
settlement of December 14, 1973 covered the demand with respect to Variable
Dearness Allowance sponsored by the $angh, (ii) whether the aforesaid reference
by the Government was invalid and the Industrial Tribunal was incompetent to
make the award in question during the currency of settlement arrived at by the
Employees' Union which had been duly recognised under the Code of Discipline,
(iii) whether the acceptance of the benefits flowing from the aforesaid
settlement not 541 only by the members of the Majority Union but also by the
members of the Sangh operated as an implied agreement by acquiescence and
debarred the Sangh from raising the demand, (iv) whether it was legal and proper
for the Tribunal to link the scheme of Dearness Allowance with the Ahmadabad
Dearness Allowance when the recommendation of the Wage Board set up for the
industry in 1968 for adoration of All India Consumer Price Index as the basis
of Dearness Allowance had been accepted and was being implemented and (v)
whether in fixing the Dearness Allowance, the Industrial Tribunal was justified
in going beyond the region and taking into consideration for the purpose of
comparison the Dearness Allowance paid by Sarabhai Chemicals and other concerns
in other parts of the State.
Before dealing with these points, we consider
it necessary and proper to refer to a few provisions of the Act.
Clause (p) of section 2 of the Act defines
"settlement" as under "2.(p) 'settlement' means a settlement
arrived at in the course of conciliation proceeding and includes a written
agreement between the employer and workmen arrived at otherwise than in the
course of conciliation proceeding where such agreement has been signed by the parties
thereto in such manner as may be prescribed and a copy thereof has been sent to
an officer authorised in this behalf by the appropriate Government and the
Conciliation Officer." An analysis of the above mentioned clause would
show that it envisages two categories of settlement.-(i) a settlement which is
arrived at in the course of conciliation proceeding i.e. which is arrived at
with the assistance and concurrence of the Conciliation officer who is duty
bound to promote a right settlement and to. do everything he can to induce the
parties to come to a fair and amicable settlement of the dispute. See The Bata
Shoe Co. (P) Ltd. v. D. N. Ganguly & Ors.(1) and (ii) a written agreement
between employer and workman arrived at otherwise than in the course of
conciliation proceeding.
For the validity of the second category of
settlement, it is essential that the parties thereto should have subscribed to
it in the prescribed manner and a copy thereof should have been sent to an
officer authorised in this behalf by the appropriate Government and the
Conciliation Officer.
The consequences of the aforesaid two
categories of settlement which are quite distinct are set out in section 18 of
the Act which reads as under "18. (1) A settlement arrived at by agreement
between the employer.. and workman otherwise than in the course of conciliation
proceeding shall be binding on the parties to the agreement.
(1) [1961] 13 S.C.R.308.
17-277 SCI/78 542 (2) Subject to the
provisions of sub-section (3), an arbitration award which has become
enforceable shall be binding on the parties to the agreement who referred the
dispute to arbitration.
(3) A settlement arrived at in the course of
conciliation proceeding under this Act or an arbitration award in a case where
a notification has been issued under sub-section (3A) of section 10A or an
award of a Labour Court, Tribunal or National Tribunal which has become
enforceable shall be binding on- (a) all parties to the industrial dispute;
(b) all other parties summoned to appear in
the proceeding as parties to the dispute, unless the Board, Arbitrator, Labour
Court, Tribunal or National Tribunal, as the case may be, records the opinion
that they were so summoned without proper cause;
(c) where a party referred to in clause (a)
or clause (b)is an employer, his heirs, successors or assigns in respect of the
establishment to which the dispute relates;
(d) where a party referred to in clause (a)
or clause (b) is composed of workmen, all persons who are employed in the
establishment or part of the establishment, as the case may be, to which the
dispute relates on the date of the dispute and all persons who subsequently
become employed in that establishment or part." A bare perusal of the
above quoted section would show that whereas a settlement arrived at by
agreement between the employer and the workmen otherwise than in the course of
conciliation proceeding is binding only on the parties to the agreement a
settlement arrived at in the course of conciliation proceeding under the Act is
binding not only on the parties to the industrial dispute but also on other
persons specified in clauses (b), (c) and (d) of sub-section (3) of section 18
of the Act. We are fortified in this conclusion by a decision of this Court in
Ramnagar Cane and Sugar Co. Ltd. v. Jatin Chakravorty & Ors. (1) Where it
was held as follows "When an industrial dispute is thus raised and is
decided either by settlement or by an award the scope and effect of its
operation is prescribed by s. 18 of the Act. Section 18(1) provides that a
settlement arrived at by agreement between the employer and the workman
otherwise than in the course of conciliation proceeding shall be binding on the
parties to the agreement; whereas S. 18(3) provides that a settlement arrived
at. in the course of conciliation proceedings Which has become enforceable
shall be binding on all the parties specified in cls. (a), (b), (c), and (d) of
sub-s. (3). Section 18 (3) (d) makes it clear that, where a party referred (1)
[1960] 3 S.C.R. 960.
543 to in cl. (a) or (b) is composed of
workmen, all persons who are employed in the establishment or part of the
establishment, as the case may be, to which the dispute relates on the date of
the dispute and all persons who subsequently become employed in that establishment
or part, would be bound by the settlement. . . . . . . In order to bind the
workmen it is not necessary to show that the said workmen, belong to the Union
which was a party to the dispute before the conciliator.
The whole policy of s. 18 appears to be to
give an extended operation to the settlement arrived at in the course of
conciliation proceedings, and that is the object with which the four categories
of persons bound by such settlement are specified in s. 18 , sub-s. (3)."
Similar view seems to have been held by another Division Bench of this Court in
The Jhagrakhan Collieries (P) Ltd. v. Shri G. C. Agarwal, Presiding Officer,
Central Government Industrial Tribunal-cum-Labour Court, Jabalpur & Ors.(1)
The legal position emerging from the aforementioned provisions of the Act being
clear, we now proceed to tackle the questions set out above.
As the first two questions are inseparably
linked up, we propose to deal with them together. Although, prima facie there
seems to be considerable force in the Sangh's stand that paras 2.3, 3.1, 3.2
and 3.3 of the aforesaid agreement of December 14, 1973 arrived at between the
Employees' Union and the appellant Company related only to the special pay and
did not cover the Sangh's demand for Variable Dearness Allowance linked to the Ahmadabad
cost of living index, we do not consider it necessary ;to go into this
question, as the said agreement not having been arrived at during the course of
a conciliation proceeding, it could not, according to section 18(1) of the Act
bind anyone other than the parties thereto. A fortlori, the fact that the
Employees' Union which hod been duly recognised under the Code of Discipline
arrived at the aforesaid agreement with the appellant Company would not operate
as a legal impediment in the way of the Sangh (which was not a party to the
agreement)to raise a demand or dispute with regard to the Variable Dearness
Allowance linked to Ahmadabad cost of living index or affect the validity of
the reference by the Government or the jurisdiction of the Industrial Tribunal
to go into the dispute. The conclusion that a minority union can validly raise
an industrial dispute gains support from section 2(k) of the Act which does not
restrict the ambit of the definition of 'industrial dispute to a dispute
between an employer and a recognised majority union but takes within its wide
sweep any dispute or difference between employer and workmen including a
minority union of workmen which is connected with employment or terms of
employment or conditions of labour of workmen as well as the observations made
by this Court in M/s. Dharampal Premchand v. M/s. Dharampal Premchand
(Saughandhi) (1) [1975] 3 S.C.C.613.
(2) [1965] 3 S.C.R.394 544 It may also be
relevant to mention in this connection that both the counsel for the Employees'
Union and the counsel for the appellant Company admitted before the Industrial
Tribunal that the aforesaid agreement had been terminated by two months' notice
(See p. 39 of the Industrial Tribunal's Award). We have, therefore, no
hesitation in holding that neither the Sangh was precluded from raising the
demand or the dispute, nor was the Government debarred from making the
reference nor was the Industrial Tribunal's competence to go into the dispute
and make the award affected in any manner.
The first two questions are decided
accordingly.
Re : Question No. 3 :-This question is no
longer res integra. In Jhagrakhan Collieries (P) Ltd. v. Shri G. C. Agarwal,
Presiding Officer, Central Government Industrial Tribunal-cum-Labolur Court,
Jabalpur & Ors. (supra) Sarkaria, J. speaking for the Bench observed that
"an implied agreement by acquiescence, or by conduct such as acceptance of
a benefit under an agreement to which the worker acquiescing or accepting the
benefit was not a party, being outside the purview of the Act, is not binding
on such a worker either under subsection (1) or under sub-section (3) of
section 18. It follows, therefore,' that even if 99% of the workers have
impliedly accepted the agreement arrived at by drawing V.D.A. under it, will
not-whatever its effect under the general law-put an end to the dispute before
the Labour Court and make it functus officio under the Act." Accordingly,
the theory of implied agreement by acquiescence sought to be built up on behalf
of the appellant on the basis of the acceptance of the benefits flowing from
the agreement even by the workmen who were not signatories to the settlement is
of no avail to the appellant Company and cannot operate as an estoppel against
the Sangh or its members.
Re : Question No. 4 : It is a matter of
common knowledge that the spiral of prices has been constantly rising, and the
basket of goods and services has been costing more and more day after day since
the outbreak of the Second World War in September, 1939. It is equally well
known and indeed is not disputed that in the relevant years the prices of
essential commodities and cost of living have been com- paratively higher at
Mithapur that at other places in the districts like Jamnagar, Dharangadhra, Porbandar,
Bhavnagar etc. and the appellant Company had not been maintaining uniform
standard of Dearness Allowance, and had been paying higher Dearness Allowance
to the workmen in its Head Office at Bombay than to its workmen at Mithapur.
The statistics extracted from various annual reports etc. exhibited in the case
particularly Exhibit 13(6) go to show that the appellant Company which, was
established more th in 40 years ago besides being a highly integrated chemical
complex based on the solar evaporation 'of sea water in India is the largest
solar salt producing concern in the country. 'The statistics also show that
production of soda ash in diverse forms by the appellant Company for the
relevant years is considerably higher than the combined production of soda ash
of Dharangadhra Chemicals and Saurashtra Chemicals-the two other concerns in
the Saurashtra region. The statistics also establish that there is no other 545
heavy Chemicals Concern in the region which can be favorably compared to the
appellant Company in so far as the nature, and extent of business, capital
outlay, percentage of gross and net profits, strength of labour force,
reserves, dividends on Equity Share prospects of future business are concerned.
As in Chart (Exh. 13(26) shows that the percentage of wages in the appellant
Company is the lowest amongst the seven companies listed therein.
Considering all the relevant factors which
are to be born in mind in fixing the Dearness Allowance, it is evident that the
appellant Company holds a unique position in heavy chemicals in the region. It
is in these circumstances that the Industrial Tribunal was constrained to turn
to similar industries in Gujarat and found in the light of the aforesaid
guiding factors that Sarabhai Chemicals, Baroda was the nearest similar
industry which could legitimately serve as a comparable concern. The statistics
also establish that besides Sarabhai Chemicals, Baroda, Anil Starch, Ahmadabad,
Alembic Chemicals Works, Baroda, Attul Products, Bulsar and Ahmadabad Manufacturing
and Calico Printing Co. Ltd. which are included in the list of heavy chemical
factories covered by the Wage Board were paying 100% of Textile Dearness
Allowance to its workmen. It is also evident from Exhibit 23 that the total pay
packet paid to Mithapur ,workers was much less as compared to the total pay
packet of the workers in other chemical and pharmaceutical companies alluded to
in Exhibit 23. The material on the-record also makes it abundantly clear that
the appellant Company has been making huge profits over the years and its
financial position is so stable that it could not only give Variable Dearness
Allowance on the basis of what was being paid to the workmen in the Textile
Industry but could pay even higher allowance as was being paid to its workmen
in the Head Office at Bombay. The Tribunal was, therefore, justified in linking
the Dearness-Allowance in ,question to the Textile Dearness Allowance paid to
the industrial workers at Ahmadabad which is based on the Report of Family
Living Survey among industrial Workers at Ahmadabad, 1958-59, complied as a
result of the joint investigation carried on in a rational and scientific
manner by several institutions viz. Labour Bureau, Ministry of Labour &
Employment. Government of India, clinical Advisory Committee on Cost of Living
Index Numbers consisting of representatives of the Ministry of Labour &
Employment, Food and Agriculture Finance, Planning Commission, the National
Sample Survey Directorate, the Department of Statics (C.S.O), the Indian Statistical
Institute and the Reserve Bank of India etc. leading to the construction of
Consumer Price Index Number for the working class which was accepted as
reliable by this Court in Ahemedabad Mill Owners Association etc.v.The Textile
Labour Association.(1) We are, therefore, of the opinion that notwithstanding
the implementation of he recommendations of the Wage Board, there was nothing
wrong a )out the linking of the scheme of the Dearness Allowance with the
Ahemedabad Cost of Living Index ,Number known as Textile Dearness Allowance as
before the revision in 1974.
Re : Question No. 5 : This takes us to
determination of the last (1) [1966] 1 S.C.R. 382.
546 question. The decision of this Court in
Bengal Chemical and Pharmaceutical works Ltd. and Its Workmen & Anr(1) no
doubt shows that in ,fixing wages and Dearness Allowance, the Industry
cum-region formula is inter alia to be kept in view. At the same time, it has
to be borne in mind that there can be no comparison between a small struggling
concern and a large flourishing unit. It follows therefore, that when there is
a large disparity between the two concerns engaged in the same line of business
in a region with which the industrial Court is dealing is not safe to fix the
same wage structure for the large flourishing concern of long standing as
obtains in a small struggling concern. (See French Motor Car Company Ltd. and
Their Workmen (2). It cannot also be lost sight of that with the march of time,
the narrow concept of Industry-cum-Region is fast charging and too much
importance cannot be attached to region. The modem trends in industrial law
seem to lay greater accent on the similarity of industry rather than on the
region. It was observed by this Court in Workmen of New Egerton Woollen Mills
and New Egerton Woollen Mills & Ors.(3) that where there are no comparable
concerns in the same industry in the region, the Tribunal can look to concerns
in other industries in the region for comparison but in that case. such concern
should be as similar as possible and not disproportionately large or absolutely
dissimilar. On the parity of reasoning, it is reasonable to conclude that where
there are no comparable concerns engaged in similar industry in the region, it
is permissible for the Industrial Tribunal or Court to look to such similar
industries or industries as nearly similar as possible in adjoining or other
region in the State having similar economic conditions.
As in the instant case there was no
comparable concern engaged in the line of business similar to that of the
appellant Company in the Surashtra region, the Industrial Tribunal. did not, in
our opinion, commit any error in taking into consideration for the purpose of
comparison ,the Dearness Allowance paid by Sarabhai Chemicals and other
concerns ,-of the like or approximately Eke magnitude in other parts of the
State of Gujarat.
For the foregoing reasons, we do not find any
force in this appeal which is dismissed with costs quantified at Rs. 2,000/-.
Appeal dismissed, P.H.P.
(1) [1969] 1 L.L.J. 751, 758 (2) [1962] 2
L.L.J. 744.
(3) [1969] 2 L.L.J. 782.
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