PETITIONER: GREAVES COTTON AND CO. AND OTHERS Vs. RESPONDENT: THEIR WORKMEN DATE OF JUDGMENT: 14/11/1963 BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. GAJENDRAGADKAR, P.B. GUPTA, K.C. DAS CITATION: 1964 AIR 689 1964 SCR (5) 362 CITATOR INFO : R 1966 SC 305 (41) RF 1967 SC1175 (12) R 1967 SC1286 (8) R 1969 SC 360 (20) R 1972 SC 319 (10) RF 1972 SC2273 (20) R 1972 SC2332 (31,70,71,113,118) RF 1973 SC2758 (11) R 1974 SC 526 (15) RF 1975 SC1778 (20) R 1978 SC 982 (6,10) R 1978 SC1113 (14) R 1984 SC 356 (14) RF 1986 SC 125 (14) RF 1986 SC1794 (7) ACT: Industrial Dispute-Wage Scales-Industry-cum-region formula- Applicability-Division of unskilled workers into two classes, if permissible-Dearness allowance-Incremental scales-Adjustment. HEADNOTE: The disputes between the appellant companies and the workmen which were referred to the Industrial Tribunal for adjudication, related to wages, dearness allowance and gratuity. The companies raised objections to the award of the Tribunal on various grounds. Held:(i) The reference in the award to the recommendations of the Tripartite Conference wherein the need-based minimum wage was evolved, did not vitiate the award, as the final decision was based not on them but on a consideration of the wages prevalent incomparable concerns so far as clerical and subordinate staff were considered. (ii) In applying the industry-cum-region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there were large number of concerns in the same region carrying on the same industry, but where the number of industries of the same kind in a particular region was small, it was the region part of the formula which assumed importance particularly in the case of clerical and subordinate staff. In the present case, the Tribunal was right in leaning more on the region part of the industry-cum-region formula and less on the Industry part. Workman of Hindustan Motors v. Hindustan Motors, [1962] 2. J.352 and French Motor Car Company v. Their Workman [1963] Supp. 2. S.C.R. 16 considered. (iii)The Tribunal was not justified in creating two classes of higher unskilled and lower unskilled in the category of unskilled factory-workmen in the matter of fixation of wage-scales. (iv)Employees getting same wages should get the same scales of dearness allowance irrespective of whether they were working as clerks, or members of subordinate staff or factory-workmen. (v)In fixing the same rates of dearness allowance for factory workmen as for clerical staff, it was necessary for the Tribunal when making comparisons to take into account the total wage packet and then compare it with the total wage packet of comparable 363 concerns and thus arrive at a just figure for basic wage for each category of factory-workmen. (vi)There is nothing in law to prevent an industrial tribunal from granting adjustments to the employees in the revised wage scales even in a case where previously pay- scales were in existence, but this has to be done sparingly, taking into consideration the facts and circumstances of each case. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 272 to 280
of 1962.
Appeals by special leave from the Award dated June 3, 1960,
in reference (IT) Nos. 84 and 251 of 1959, June 15, 1960, in
References (IT) Nos. 112 and 252 of 1959, June 16, 1960, in
References (IT) Nos. 121 of 1959, and 7 of 1960, June 15,
1960, in References (IT) Nos. 123, 180 and 236 of 1959 of
the Industrial Tribunal, Maharashtra at Bombay.
S.V. Gupte, Additional Solicitor-General N. V. Phadke, J. B.
Dadachanji, O. C. Mathur and Ravinder Narain for the
appellants (in all the appeals).
M.C. Setalvad, K.T. Sule, Madan G. Phadnis, Jitendra Sharma
and Janardan Sharma, for the respondents (in C.A. No.
272/1962).
K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan
Sharma, for the respondents (in C. As. Nos. 273-280/62).
November 14, 1963. The Judgment of the Court was delivered
by
WANCHOO J.-These nine appeals by special leave arise out of
the awards of the Industrial Tribunal, Bombay and will be
dealt with together. There were disputes between the four
appellants–companies and the respondents, their workmen,
which were referred for adjudication to the Industrial
Tribunal by nine reference-orders on various dates between
April to December 1959. The main dispute which gave rise to
the references was with respect to wages, dearness allowance
and gratuity. The references included other items also but
we are not concerned in the present appeals with those
items. Of the four companies who are the appellants before
364
us, Greaves Cotton and Co., is the first company and its
main activity is to invest money in manufacturing concerns.
The second company is Greaves Cotton and Crompton Parkinson
Private Limited and its main business is distribution of the
products of a manufacturing concern known as Crompton
Parkinson (Works) India Limited and service and repair to
the said products at its workshop. The third company is
Konyon Greaves Private Limited and its main business is to
manufacture high grade interstranded ropes for the textile
industry. The last company is Ruston and Hornsby (India)
Private Limited and its main business is to manufacture oil
engines and pumps. The last three companies are controlled
by the first company, namely Greaves Cotton and Co., in one
way or the other and that is how the main dispute relating
to wages and dearness allowance was dealt with together by
the tribunal. There were two references each with respect
to the first three companies and three references with
respect to Ruston and Hornsby Private Limited; and that is
how there are nine appeals before us. There were nine
awards, though the main award dealing with the main dispute
relating to wages and dearness allowance was common.
It appears that wages and dearness allowance prevalent in
the four companies had been continuing since 1950 when the
last award was made between the parties. It may also be
stated that there was no .serious dispute before the
Tribunal as to the financial capacity of the companies and
further, as the first company controls the other three
companies, the wages and dearness allowance are the same so
far as the clerical and subordinate staff are concerned.
The same appears to be the case with respect to factory-
workmen.
The Tribunal dealt with clerical and subordinate staff
separately from the factory-workmen. So far as the clerical
and subordinate staff are concerned, the Tribunal, after a
comparison of wages and dearness allowance prevalent in the
four companies with wages
365
and dearness allowance prevalent in comparable concerns
revised them. Further it provided bow the clerical and
subordinate staff would be fitted in the new scales after
making certain adjustments and in that connection it gave
one to three extra increments depending upon length of
service between 1950 to 1959. Finally, it ordered that the
award would have effect from April 1, 1959, which was a week
before the first reference was made with respect to the
first company. The Tribunal then dealt with the case of the
factory-workmen and prescribed certain rates of wages.
Further it gave the same dearness allowance to the factory-
workmen as to the clerical and subordinate staff and
directed adjustments also on the same basis. Finally it
considered the question of gratuity and the main provision
in that respect was that the maximum gratuity allowable
would be upto 20 months and a provision. was also made to
the effect that if an employee was dismissed or discharged
for misconduct which caused financial loss to the employer,
gratuity to the extent of that loss only will not be paid to
the employee concerned.
The main attack of the appellants is on the award as regards
wages and dearness allowance. It is urged that the
industry-cum-region formula, which is the basis for fixation
of wages and dearness allowance has not been properly
applied by the Tribunal and it had been carried away by the
recommendations of the tripartite conference which suggested
need based minimum wages. It is also urged that whatever
comparison was made was with concerns which were not
comparable and the wages awarded were even higher than those
prevalent in any comparable concern. It is also urged that
the Tribunal did not consider the total effect of the
increase it was granting in basic wage and dearness
allowance together as it should have done, for the purpose
of finding out whether the total pay packet in the
appellants’ concerns can bear comparison with the total pay
packet of the concerns with which the Tribunal had compared
the appellants’ concerns. In this connection it is urged
that in flying
366
scales of wages the Tribunal increased the maximum and the
minimum and the annual rate of increment and decreased the
span of years in which the maximum would be reached.
Adjustments made by the Tribunal are also attacked and so is
the order making the award enforceable from April 1, 1959.
As to the factory workmen it is urged that the Tribunal made
no attempt to make a comparison with wages prevalent even in
what it considered to be comparable concerns. Lastly it is
urged that the Tribunal created a new category of factory
workmen called higher unskilled which was not demanded and
which in any case did not exist in any comparable concern.
The first question therefore which falls for decision is
whether the Tribunal went wrong in not following the
industry-cum-region principle and in leaning on the
recommendations of the Tripartite Conference. It is true
that the Tribunal begins its award with a reference to the
recommendations of the Tripartite Conference wherein the
need-based minimum wage was evolved. It is urged that this
disposed the Tribunal to pitch wage-scales too high. It is
however clear from the award that though the Tribunal
discussed the recommendations of the Tripartite Conference
at some length, when it actually came to make the award it
did not follow those recommendations. The reason why it
referred to those recommendations was that the respondents-
workmen based their claim on them and wanted that the
Tribunal should fix wagescales accordingly. But the
Tribunal’s conclusion was that it was not feasible to do so,
though looking at the financial stability of the appellants,
emoluments needed upgrading. It then went on to consider
the wages prevalent in comparable concerns and finally fixed
wages for the appellants on the basis of wages prevalent in
such concerns. Though therefore the recommendations of the
Tripartite Conference are referred to in the Tribunal’s
award, its final decision is not based on them and what the
Tribunal has done is to make comparisons with what it
considered comparable concerns so far as clerical and
subordi-
367
nate staff are concerned. We are therefore not prepared to
say that reference to the recommendations of the Tripartite
Conference in the opening part of the award was irrelevant
and therefore the rest of the award must be held to be
vitiated on that ground alone.
The main contention of the appellants however is that the
tribunal has gone wrong in applying the industry-cum-region
formula which is the basis for fixing wages and dearness and
has made comparison with concerns which are not comparable.
It is also urged that the Tribunal has relied more on the
region aspect of the industry-cum-region formula and not on
the industry aspect when dealing with clerical and
subordinate staff and in this it went wrong. Reference in
this connection is made to two decisions of this Court,
namely, Workmen of Hindusthan Motors v. Hindusthan
Motors(‘,) and French Motor Car Company v. Their Workman (2
) and it is emphasis that the principles laid down in
Hindusthan Motors’ case(“) were more applicable to the
present case than the principles laid down in the French
Motor Car Co.’s case(2). In the Hindusthan Motors case(1),
this Court observed that it was ordinarily desirable to have
as much uniformity as possible in the wage-scales of
different concerns of the same industry working in the same
region, as this puts similar industries more or less on an
equal footing in their production struggle. This Court
therefore applied the wage-scales awarded by the Third Major
Engineering Tribunal in Bengal in the case of Hindusthan
Motors also. It is urged that the Tribunal should have
taken into account comparable concerns in the same industry
and provided wage-scales on the same lines so that, so far
as manufacturing concerns in the present appeals are
concerned, there will be equality in the matter of
competition. In the French Motor Car Co.’s case(2) however
this Court held so far as clerical staff and subordinate
staff are concerned that it may be possible to take into
account
(1) [1962] 2 L.L.J. 352.
(2) [1963] Supp. 2 S.C.R. 16
368
even those concerns which are engaged in different lines of
business for the work of clerical and subordinate staff is
more or less the same in all kinds of concerns. We are of
opinion that there is no inconsistency as urged in the
principles laid down in these two cases. As we have already
said the basis of fixation of wages and dearness allowance
is industry-cum-region. Where there are a large number of
industrial concerns of the same kind in the same region it
would be proper to put greater emphasis on the industry part
of the industry-cum-region principle as that would put all
concerns on a more or less equal footing in the matter of
production costs and therefore in the matter of competition
in the market and this will equally apply to clerical and
subordinate staff whose wages and dearness allowance also go
into calculation of production costs. But where the number
of comparable concerns is small in a particular region and
therefore the competition aspect is not of the same
importance, the region part of the industry-cum-region
formula assumes greater importance particularly with
reference to clerical and subordinate staff and this was
what was emphasised in the French Motor Car Co.’s case()
where that company was already paying the highest wages in
the particular line of business and therefore comparison had
to be made with as similar concerns as possible in different
lines of business for the purpose of fixing wage-scales and
dearness allowance. The principle therefore which emerges
from these two decisions is that in applying the industry-
cum-region formula for fixing wage scales the Tribunal
should lay stress on the industry part of the formula if
there are a large number of concerns in the same region
carrying on the same industry; in such a case in order that
production cost may not be unequal and there may be equal
competition, wages should generally be fixed on the basis of
the comparable industries, namely, industries of the same
kind. But where the number of industries of the same kind
in a particular region is small it is the region part of the
industry-cum-region formula which
(1) [1963] Supp. 2s C.R. 16.
369
assumes importance particularly in the case of clerical and
subordinate staff, for, as pointed out in the French Motor
Car Co.’s case,(” there is not much difference in the work
of this class of employees in different industries. In the
present cases it does appear that the Tribunal has leaned
more on the region part of the industry-cum-region formula
and less on the industry part. But we think that it cannot
be said that the Tribunal was wrong in doing so for two
reasons. In the first place these four companies are not
engaged in the same line of industry; but on account of
certain circumstances, namely, that Greaves Cotton and Co.
is the controlling company of the other three, it has been
usual to keep the same scales for clerical and subordinate
staff in all these concerns. In the second place, it is not
clear, as was clear in the Hindusthan Motors case(” that
there are a large number of comparable concerns in the same
region. As a matter of fact the main company out of these
four is Greaves Cotton and Co. Limited, which is in the main
an investment and financial company and the Tribunal was
therefore right in taking for comparison such companies as
would stand comparison with the main company in the present
appeals (namely, Greaves Cotton & Co).
Both parties filed scales of wages prevalent in what they
considered to be comparable concerns and it is clear from
the documents filed that some of the comparable concerns
were the same in the documents filed by the two parties. On
the whole therefore we do not think the Tribunal was wrong
in putting emphasis on the region aspect of the
industry-cum-region formula in the present case insofar as
clerical and subordinate staff was concerned., for the four
companies before us do not belong to the same industry and
Greaves Cotton and Co. controls the other three.
Considering therefore the standing of the main company
(namely, Greaves Cotton and Co. Ltd.), it was not improper
for the Tribunal in the present cases to rely on the
comparable concerns
(1) [1963] Supp. 2 S.C.R. 16
1/SCI/64 — 24
(2) [1962] 2 L.L.J. 352.
370
which were cited on behalf of the respondents, some of which
were common with the comparable concerns cited on behalf of
the appellants. What the Tribunal lid thereafter was to
consider the minimum for various categories of clerical and
subordinate staff prevalent in these comparable concerns and
the maximum prevalent therein at-id also the annual
increments and the span of years in which. the maximum would
be reached. The Tribunal then went on to fix scales for
various categories of clerical and subordinate staff of the
appellants which were in-between the scales found in various
concerns. Further, as the financial capacity of the
appellants was not disputed, the Tribunal pitched these
scales nearer the highest scales taking into account the
fact that for nine years after 1950 there had been no
increase in wage scales. We do not think therefore that the
wage sales fixed by the Tribunal, learning as it did, on the
region aspect of the industry-cum-region formula, for the
clerical and subordinate staff can be successfully assailed
by the appellants.
It has however been urged that the Tribunal overlooked
considering what would be the total wage packet including
basic wages and dearness allowance and that has made the
total wages (i.e. basic wage and dearness allowance) fixed
by the Tribunal much higher in the case of the appellants
than in comparable concerns which it took into account. It
is true that the Tribunal has not specifically considered
what the total wage packet would be on the basis of the
scales of wages and dearness allowance fixed by it as it
should have done; but considering that wage scales fixed are
less than the highest in the comparable concerns though more
than the lowest, it cannot be said that the total wage
packet in the case of the appellants would ‘be necessarily
higher than in the case of the other comparable concerns.
This will be clear when we deal with the dearness allowance
which has been fixed by the Tribunal, for it will appear
that the dearness allowance fixed is more or less on the
same lines, i.e. less than
371
the highest but more than the lowest in other comparable
concerns. On this basis it cannot be said that the total
wage packet fixed in these concerns would be the highest in
the region. Though therefore the Tribunal has not
specifically considered this aspect of the matter which it
should have done its decision cannot be successfully
assailed on the ground that the total wage packet fixed is
the highest in the region.
This brings us to the case of factory-workmen. We are of
opinion that there is force in the contention of the
appellants insofar as the fixation of wagescales for
factory-workmen is concerned. The respondents wanted that
separate wages should be fixed for each category of workmen.
The Tribunal however rejected this contention and held that
the usual pattern of’ having unskilled, semi-skilled and
skilled grades should be followed and the various workmen,
though they should be known by their designation and not by
the class in which they were being placed, should be fitted
in these categories. In the present concerns, there were
six categories from before, namely (i) unskilled, (ii)
semiskilled 1, (iii) semiskilled If, (iv) skilled 1, (V)
skilled 11, and (vi) skilled 111. The Tribunal kept these
categories though it introduced a seventh category called
the higher unskilled. It is not seriously disputed that
this category of higher unskilled does not exist in
comparable concerns; nor have we been able to understand how
the unskilled category can be sub-divided into two namely,
lower and higher unskilled, though we can understand the
semi-skilled and skilled categories being sub-divided,
depending upon the amount of’ skill. But there cannot be
degrees of want of skill among the unskilled class. The
Tribunal therefore was not justified in creating the class
of higher unskilled. It is neither necessary nor desirable
to create a higher unskilled category and only the six
categories which were prevalent from before should continue.
The main attack of the appellants on the wages fixed for
these six categories is that in doing so, the
372
Tribunal completely overlooked the wages prevalent for these
categories in concerns which it had considered comparable.
A look at the award shows that it is so. The Tribunal has
no where considered what the wages for these categories in
comparable concerns are, though it appears that some
exemplars were filed before it; but the way in which the
Tribunal has dealt with the matter shows that it paid scant
regard to the exemplars filed before it and did not care to
make the comparison for factory-workmen in the same way in
which it had made comparison for clerical and subordinate
staff. In these circumstances, wage-scales fixed for
factory-workmen must be set aside and the matter remanded to
the Tribunal to fix wage-scales for factory-workmen dividing
them into six categories as at present and then fixing wage
after taking into account wages prevalent in comparable
concerns. The parties will be at liberty to lead further
evidence in this connection.
Then we come to the question of dearness allowance. So far
as clerical staff is concerned, dearness allowance prevalent
in the appellants’ concerns was as follows on the cost of
living index of 411-420:-
Basic salary D.A at cost of Verification for
in Rs. living index every 10 point
group 411-420 movement
1 to 100 115% of basic salary 5%
or the textile scale
on 30 day month which
ever is higher
101 to 200 35% 1 1/2%
201 to 300 25% 1%
301 and above 17 1/2% 3/4%
373
The Tribunal fixed the dearness allowance as follows:-
When the consu- Variation for
Salary slab mer price index each 10 point rise
is between 411. or fall in the
420 index
On 1st Rs. 100 115% 5%
On 2nd Rs. 100 50% 2.%
On 3rd Rs. 100 25% 1%.
Balance upto 20% 1.%
Rs. 600
A comparison of these figures will show that on the first
hundred and the third hundred there is no difference in the
scale fixed by the Tribunal; but there is a slight
improvement on the second hundred and a very slight one
above three hundred. This scale fixed by the Tribunal is in
line with some scales of dearness allowance recently fixed
by Tribunals in that region. The main improvement is on the
second hundred and it cannot really be said that employees
in that wage range do not require the higher relief granted
to them by tribunals in view of the rise in prices. We do
not think therefore that the dearness allowance fixed by the
Tribunal, taking into account what was already prevalent in
these concerns and also taking into account the trend in
that region, can be successfully assailed so far as clerical
staff’ is concerned.
This brings us to the case of subordinate staff. It appears
that in these concerns, subordinate staff was getting
dearness allowance on different scales based on the old
textile scale of dearness allowance. The Tribunal has put
the subordinate staff in the same scale of dearness
allowance as clerical staff. The reason given by it for
doing so is that incongruity in the payment of dearness
allowance between clerical and subordinate staff should be
removed. It appears that on account of different scales of
374
dearness allowance for subordinate and clerical staff a
member of ‘the subordinate staff drawing the same wages
would get less dearness allowance than a member of the
clerical staff. The discrepancy is very glaring as between
clerical staff and factory-workmen who also have different
scales of dearness allowance. The Tribunal therefore
thought that dearness allowance which is meant to neutralise
the rise in cost of living, should be paid to clerical
staff, subordinate staff as well as factory workmen on the
same scale, for the need for neutralisation was uniformly
felt by all kinds of employees. It also pointed that there
was a trend towards uniformity in the matter of scales of
dearness allowance as between clerical staff and other staff
and factory workmen and referred to a number of firms where
same scales prevailed for all the staff. It has however
been urged on behalf of the appellants that the pattern in
the region is that there are different scales of dearness
allowance for clerical staff and other staff including
factory workmen and the Tribunal therefore should have
followed this pattern. The reasons given by the Tribunal
for giving the same scales of dearness allowance to all the
categories of staff, including the factory-workmen appear to
us to be sound. Time has now come when employees getting
same wages should get the same dearness allowance
irrespective of whether they are working as clerks, or
members of subordinate staff or factory-workmen. The
pressure of high prices is the same on these various kinds
of employees. Further subordinate staff and factory workmen
these days are as keen to educate their children as clerical
staff and in the circumstances there should be no difference
in the amount of dearness allowance between employees of
different kinds getting same wages. Further an employee
whether he is of one kind or another getting the same wage
hopes for the same amenities of the and there is no reason
why he should not get them, simply because he is, for
example, a factory workman, though he may be coming from the
same class of people as a member of clerical staff. On the
whole therefore the Tribunal was in
375
our opinion right in following the trend that has begun in
this region and in fixing the same scale of dearness
allowance for subordinate staff and factory workmen as in
the case of clerical staff. So far therefore as subordinate
and clerical staff are concerned, we see no reason to
disagree with the rate of dearness allowance fixed by the
Tribunal.
This brings us to the case of the dearness allowance for
factory-workmen. In their case we have set aside the award
relating to wage scales. It follows that we must also set
aside the award relating to dearness allowance as we have
already indicated that the Tribunal has to take into
consideration the total pay packet in fixing wages and
dearness allowance. When therefore the case goes back to
the Tribunal for fixing wages and dearness allowance for
factory-workmen, it will be open to the Tribunal to fix the
same rates of dearness allowance for factory workmen as for
clerical staff; but in doing so the Tribunal must when
making comparisons take into account the total wage packet
(i.e. basic wages fixed by it as well as dearness allowance)
and then compare it with the total wage packet of comparable
concerns and thus arrive at a just figure for basic wage,
for each category of factory-workmen. But the entire matter
is left to the Tribunal and it may follow such method as it
thinks best so long as it arrives at a fair conclusion after
making the necessary comparison.
This brings us to the question of adjustment. We have
already said that the Tribunal allowed one to three
increments depending upon the length of service between 1950
and 1959. It has been urged that no adjustment should have
been allowed taking into account the fact that incremental
scales were in force previously also in these concerns and
the Tribunal has increased both the minimum and the maximum
in its award and has granted generous annual increments
reducing the total span within which a particular employee
belonging to clerical and subordinate staff will reach the
maximum. Reliance in this connection has been placed on the
376
French Motor Car Co.’s case (“. It is true that the
Tribunal has given larger increments thus reducing the span
of years for reaching the maximum. That alone however is no
reason for not granting adjustment. But it is said that in
the French Motor Co. case(‘-‘, this Court held that where
scales of pay were existing from before no adjustment should
be granted by giving extra increments and that case applies
with full force to the facts of the present case. Now in
that case this Court pointed out on a review of a large
number of awards dealing with adjustments that “generally
adjustments are granted when scales of wages are fixed for
the first time. But there is nothing in law to prevent the
industrial tribunal from granting adjustments to the
employees in the revised wage scales even in a case where
previously pay-scales were in existence; but this has to be
done sparingly taking into consideration the facts and
circumstances of each case. The usual reason for granting
adjustment even where wage-scales were formerly in existence
is that the increments provided in the former wage-scales
were particularly low and therefore justice required that
adjustment should be granted a second time.” Another reason
for the same was that the scales of pay were also low. In
those circumstances adjustments have been granted by
tribunals a second time. This Court then pointed out in
that case that the incremental scales prevalent in that
company were the highest for that kind of industry and
therefore struck down the adjustments granted and ordered
that clerical staff should be fixed on the next higher step
in the new scales if there was no step corresponding to the
salary drawn by a clerk in the new scale. The question
therefore whether adjustment should be granted or not is
always a question depending upon the facts and circumstances
of each case.
Let us therefore see what the circumstances in the present
cases are. Tables of comparative rates of increments were
filed before the Tribunal
(1) [1963] Supp. 2 S.C.R. 16.
377
for various grades of clerks. It is clear from the
examination of these tables and pay-scales prevalent in the
appellants’ concerns from 1950 that pay scales were not high
as compared to pay scales in comparable concerns. If
anything, they were on the low side. Further, as an
example, in the case of junior clerks, the first rate of
increment was Rs. 5 in the appellants’ concerns and this
rate went on for 13 years; in other concerns where the first
rate of increment was Rs. 5 it lasted for a much shorter
period, which in no case exceeded eight years and was in
many cases three or four years. In some concerns the first
rate of increment was higher than Rs. 5. Almost similar was
the case with senior clerks. So it appears that in the
appellants’ concerns the first rate of increment was
generally on the low side and lasted for a longer period
than in the case of comparable concerns. In these
circumstances if the Tribunal decided to give increments by
way of adjustments it cannot be said that the Tribunal went
wrong. The facts ‘in these cases are different from the
facts in the case of the French Motor Car Co.’s case(2) and
therefore (1) we see no reason for interfering with the
order of adjustment. After the change in wage-scales, dear-
ness allowance and adjustment, the employees of the
appellants’ concerns will stand comparison with some of the
best concerns in that region. But considering that there is
no question of want of financial capacity and that Greaves
Cotton & Co. which is the main company concerned in these
appeals, has a high standing in that region, we do not think
that the total wage packet fixed is abnormal or so
disproportionate as compared to the total wage packet in
other comparable concerns as to call for any interference
with adjustments.
The next question is about the so-called retrospective
effect of the award. The first reference was made to the
Tribunal on April 8, 1959, while the last was in December
1959. What the Tribunal has done is to grant wage-scales
etc., from April 1, 1959. This cannot in our opinion be
said to be really (1)[1963] Supp. 2 S.C.R. 16.
378
retrospective, because it is practically from the date of
the first reference in the case of the main company. On the
whole therefore we see no reason to interfere with the order
of the Tribunal fixing the date from which the award would
come into force.
Lastly we come to the question of gratuity. The attack in
this connection is on two aspects of the gratuity scheme.
The first is about the fixation of 20 months as the maximum
instead of’ 15 months, which was usual so far, The second is
with respect to deduction from gratuity only to the extent
of the financial loss occasioned by misconduct in case of
dismissal for misconduct. So far as the second provision is
concerned it cannot be disputed that this is the usual
provision that is being made in that region. So ear as the
increase in the maximum from 15 months to 20 months is
concerned, it appears that the Tribunal has relied on a
number of cases in which the maximum is higher than fifteen
months wages. In these circumstances considering that tri-
bunals have now begun to, give a higher ceiling and in one
concern, namely Mackinnon Mackenzie, the ceiling has been
fixed even so high as thirty moths by agreement, we do not
think that any interference is called for in the present
case.
We therefore dismiss the appeals so far as retrospective
effect and adjustments as also fixation of wages and
dearness allowance with respect to clerical and subordinate
staff are concerned. We allow the appeal with respect to
factory-workmen and send the cases back to the Tribunal for
fixing the wage structure including basic wage and dearness
allowance and for granting adjustments in the light of the
observations made by us. The new award pursuant to this
remand will also come into force from the same date, namely,
April 1, 1959. The appeals with respect to gratuity are
dismissed. In the circumstances we order parties to bear
their own costs.Two months from today is allowed to pay
up the arrears.
Appeal partly allowed and remanded.
379