{"id":113292,"date":"1963-11-14T00:00:00","date_gmt":"1963-11-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/greaves-cotton-and-co-and-others-vs-their-workmen-on-14-november-1963"},"modified":"2015-05-08T04:45:45","modified_gmt":"2015-05-07T23:15:45","slug":"greaves-cotton-and-co-and-others-vs-their-workmen-on-14-november-1963","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/greaves-cotton-and-co-and-others-vs-their-workmen-on-14-november-1963","title":{"rendered":"Greaves Cotton And Co. And Others vs Their Workmen on 14 November, 1963"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Greaves Cotton And Co. And Others vs Their Workmen on 14 November, 1963<\/div>\n
Equivalent citations: 1964 AIR 689, \t\t 1964 SCR (5) 362<\/div>\n
Author: K Wanchoo<\/div>\n
Bench: Wanchoo, K.N.<\/div>\n
           PETITIONER:\nGREAVES COTTON AND CO.\tAND OTHERS\n\n\tVs.\n\nRESPONDENT:\nTHEIR WORKMEN\n\nDATE OF JUDGMENT:\n14\/11\/1963\n\nBENCH:\nWANCHOO, K.N.\nBENCH:\nWANCHOO, K.N.\nGAJENDRAGADKAR, P.B.\nGUPTA, K.C. DAS\n\nCITATION:\n 1964 AIR  689\t\t  1964 SCR  (5) 362\n CITATOR INFO :\n R\t    1966 SC 305\t (41)\n RF\t    1967 SC1175\t (12)\n R\t    1967 SC1286\t (8)\n R\t    1969 SC 360\t (20)\n R\t    1972 SC 319\t (10)\n RF\t    1972 SC2273\t (20)\n R\t    1972 SC2332\t (31,70,71,113,118)\n RF\t    1973 SC2758\t (11)\n R\t    1974 SC 526\t (15)\n RF\t    1975 SC1778\t (20)\n R\t    1978 SC 982\t (6,10)\n R\t    1978 SC1113\t (14)\n R\t    1984 SC 356\t (14)\n RF\t    1986 SC 125\t (14)\n RF\t    1986 SC1794\t (7)\n\n\nACT:\nIndustrial Dispute-Wage Scales-Industry-cum-region  formula-\nApplicability-Division\t of  unskilled\tworkers\t  into\t two\nclasses,   if\tpermissible-Dearness   allowance-Incremental\nscales-Adjustment.\n\n\n\nHEADNOTE:\nThe disputes between the appellant companies and the workmen\nwhich\twere  referred\tto  the\t Industrial   Tribunal\t for\nadjudication,  related\tto  wages,  dearness  allowance\t and\ngratuity.   The companies raised objections to the award  of\nthe Tribunal on various grounds.\nHeld:(i)   The\t reference   in\t the   award   to   the\nrecommendations\t of  the Tripartite Conference\twherein\t the\nneed-based  minimum  wage was evolved, did not\tvitiate\t the\naward, as the final decision was based not on them but on  a\nconsideration of the wages prevalent incomparable  concerns\nso far as clerical and subordinate staff were considered.\n(ii) In applying the industry-cum-region formula for fixing\nwage  scales the Tribunal should lay stress on the  industry\npart  of the formula if there were large number of  concerns\nin the same region carrying on the same industry, but  where\nthe  number of industries of the same kind in  a  particular\nregion\twas  small, it was the region part  of\tthe  formula\nwhich  assumed\timportance  particularly  in  the  case\t  of\nclerical and subordinate staff.\nIn the present case, the Tribunal was right in leaning\tmore\non  the region part of the industry-cum-region\tformula\t and\nless on the Industry part.\nWorkman of Hindustan Motors v. Hindustan Motors,<\/a> [1962] 2.\nJ.352  and  French  Motor Car Company  v.  Their  Workman\n[1963] Supp. 2. S.C.R. 16 considered.\n(iii)The  Tribunal  was not justified in  creating  two\nclasses\t of  higher  unskilled and lower  unskilled  in\t the\ncategory  of  unskilled\t factory-workmen in  the  matter  of\nfixation of wage-scales.\n(iv)Employees getting same wages should get the same scales\nof  dearness  allowance irrespective of\t whether  they\twere\nworking\t as  clerks,  or members  of  subordinate  staff  or\nfactory-workmen.\n(v)In  fixing  the same rates of  dearness  allowance  for\nfactory workmen as for clerical staff, it was necessary\t for\nthe  Tribunal when making comparisons to take  into  account\nthe  total  wage packet and then compare it with  the  total\nwage packet of comparable\n363\nconcerns and thus arrive at a just figure for basic wage for\neach category of factory-workmen.\n(vi)There  is  nothing\tin law\tto  prevent  an\t industrial\ntribunal  from granting adjustments to the employees in\t the\nrevised\t wage  scales even in a case where  previously\tpay-\nscales were in existence, but this has to be done sparingly,\ntaking\tinto  consideration the facts and  circumstances  of\neach case.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 272 to\t 280
\nof 1962.\n<\/p>\n
Appeals by special leave from the Award dated June 3,  1960,
\nin reference (IT) Nos. 84 and 251 of 1959, June 15, 1960, in
\nReferences (IT) Nos. 112 and 252 of 1959, June 16, 1960,  in
\nReferences  (IT) Nos. 121 of 1959, and 7 of 1960,  June\t 15,
\n1960,  in References (IT) Nos. 123, 180 and 236 of  1959  of
\nthe Industrial Tribunal, Maharashtra at Bombay.
\nS.V. Gupte, Additional Solicitor-General N. V. Phadke, J. B.
\nDadachanji,  O.\t C.  Mathur  and  Ravinder  Narain  for\t the
\nappellants (in all the appeals).\n<\/p>\n
M.C. Setalvad, K.T. Sule, Madan G. Phadnis, Jitendra  Sharma
\nand  Janardan  Sharma,\tfor the\t respondents  (in  C.A.\t No.
\n272\/1962).\n<\/p>\n
K.T.  Sule, Madan G. Phadnis, Jitendra Sharma  and  Janardan
\nSharma, for the respondents (in C. As.\tNos. 273-280\/62).
\nNovember 14, 1963.  The Judgment of the Court was  delivered
\nby
\nWANCHOO J.-These nine appeals by special leave arise out  of
\nthe  awards of the Industrial Tribunal, Bombay and  will  be
\ndealt  with together.  There were disputes between the\tfour
\nappellants–companies  and the respondents,  their  workmen,
\nwhich  were  referred  for adjudication\t to  the  Industrial
\nTribunal  by nine reference-orders on various dates  between
\nApril to December 1959.\t The main dispute which gave rise to
\nthe references was with respect to wages, dearness allowance
\nand gratuity.  The references included other items also\t but
\nwe  are\t not  concerned in the present\tappeals\t with  those
\nitems.\tOf the four companies who are the appellants before
\n364<\/span>
\nus,  Greaves  Cotton and Co., is the first company  and\t its
\nmain activity is to invest money in manufacturing  concerns.
\nThe second company is Greaves Cotton and Crompton  Parkinson
\nPrivate Limited and its main business is distribution of the
\nproducts  of  a\t manufacturing\tconcern\t known\tas  Crompton
\nParkinson  (Works) India Limited and service and  repair  to
\nthe  said  products at its workshop.  The third\t company  is
\nKonyon\tGreaves Private Limited and its main business is  to
\nmanufacture  high grade interstranded ropes for the  textile
\nindustry.   The last company is Ruston and  Hornsby  (India)
\nPrivate Limited and its main business is to manufacture\t oil
\nengines and pumps.  The last three companies are  controlled
\nby the first company, namely Greaves Cotton and Co., in\t one
\nway  or the other and that is how the main dispute  relating
\nto  wages and dearness allowance was dealt with together  by
\nthe  tribunal.\tThere were two references each with  respect
\nto  the\t first\tthree companies and  three  references\twith
\nrespect\t to Ruston and Hornsby Private Limited; and that  is
\nhow  there  are\t nine appeals before us.   There  were\tnine
\nawards, though the main award dealing with the main  dispute
\nrelating to wages and dearness allowance was common.
\nIt  appears that wages and dearness allowance  prevalent  in
\nthe  four companies had been continuing since 1950 when\t the
\nlast  award  was made between the parties.  It may  also  be
\nstated\tthat  there  was  no  .serious\tdispute\t before\t the
\nTribunal  as to the financial capacity of the companies\t and
\nfurther,  as  the  first company controls  the\tother  three
\ncompanies, the wages and dearness allowance are the same  so
\nfar  as\t the clerical and subordinate staff  are  concerned.
\nThe  same  appears to be the case with respect\tto  factory-
\nworkmen.\n<\/p>\n
The  Tribunal  dealt  with clerical  and  subordinate  staff
\nseparately from the factory-workmen.  So far as the clerical
\nand  subordinate staff are concerned, the Tribunal, after  a
\ncomparison of wages and dearness allowance prevalent in\t the
\nfour companies with wages
\n365<\/span>
\nand  dearness  allowance prevalent  in\tcomparable  concerns
\nrevised\t them.\t Further it provided bow  the  clerical\t and
\nsubordinate  staff would be fitted in the new  scales  after
\nmaking\tcertain adjustments and in that connection  it\tgave
\none  to\t three\textra increments depending  upon  length  of
\nservice between 1950 to 1959.  Finally, it ordered that\t the
\naward would have effect from April 1, 1959, which was a week
\nbefore\tthe  first reference was made with  respect  to\t the
\nfirst company.\tThe Tribunal then dealt with the case of the
\nfactory-workmen\t and  prescribed  certain  rates  of  wages.
\nFurther it gave the same dearness allowance to the  factory-
\nworkmen\t as  to\t the  clerical\tand  subordinate  staff\t and
\ndirected  adjustments  also on the same basis.\t Finally  it
\nconsidered  the question of gratuity and the main  provision
\nin  that  respect was that the\tmaximum\t gratuity  allowable
\nwould  be upto 20 months and a provision. was also  made  to
\nthe  effect that if an employee was dismissed or  discharged
\nfor misconduct which caused financial loss to the  employer,
\ngratuity to the extent of that loss only will not be paid to
\nthe employee concerned.\n<\/p>\n
The main attack of the appellants is on the award as regards
\nwages  and  dearness  allowance.   It  is  urged  that\t the
\nindustry-cum-region formula, which is the basis for fixation
\nof  wages  and\tdearness allowance  has\t not  been  properly
\napplied by the Tribunal and it had been carried away by\t the
\nrecommendations of the tripartite conference which suggested
\nneed  based minimum wages.  It is also urged  that  whatever
\ncomparison  was\t made  was  with  concerns  which  were\t not
\ncomparable and the wages awarded were even higher than those
\nprevalent in any comparable concern.  It is also urged\tthat
\nthe  Tribunal  did  not consider the  total  effect  of\t the
\nincrease  it  was  granting  in\t basic\twage  and   dearness
\nallowance  together as it should have done, for the  purpose
\nof  finding  out  whether  the\ttotal  pay  packet  in\t the
\nappellants’ concerns can bear comparison with the total\t pay
\npacket of the concerns with which the Tribunal had  compared
\nthe  appellants’ concerns.  In this connection it  is  urged
\nthat in flying
\n366<\/span>
\nscales\tof wages the Tribunal increased the maximum and\t the
\nminimum\t and the annual rate of increment and decreased\t the
\nspan  of  years\t in  which the\tmaximum\t would\tbe  reached.
\nAdjustments made by the Tribunal are also attacked and so is
\nthe  order making the award enforceable from April 1,  1959.
\nAs to the factory workmen it is urged that the Tribunal made
\nno attempt to make a comparison with wages prevalent even in
\nwhat it considered to be comparable concerns.  Lastly it  is
\nurged  that the Tribunal created a new category\t of  factory
\nworkmen\t called higher unskilled which was not demanded\t and
\nwhich in any case did not exist in any comparable concern.
\nThe  first  question therefore which falls for\tdecision  is
\nwhether\t the  Tribunal\twent  wrong  in\t not  following\t the
\nindustry-cum-region   principle\t and  in  leaning   on\t the
\nrecommendations\t of the Tripartite Conference.\tIt  is\ttrue
\nthat  the Tribunal begins its award with a reference to\t the
\nrecommendations\t of  the Tripartite Conference\twherein\t the
\nneed-based minimum wage was evolved.  It is urged that\tthis
\ndisposed the Tribunal to pitch wage-scales too high.  It  is
\nhowever\t clear\tfrom  the award\t that  though  the  Tribunal
\ndiscussed  the recommendations of the Tripartite  Conference
\nat  some length, when it actually came to make the award  it
\ndid  not  follow those recommendations.\t The reason  why  it
\nreferred to those recommendations was that the\trespondents-
\nworkmen\t based\ttheir  claim on them  and  wanted  that\t the
\nTribunal   should  fix\twagescales  accordingly.   But\t the
\nTribunal’s conclusion was that it was not feasible to do so,
\nthough looking at the financial stability of the appellants,
\nemoluments  needed upgrading.  It then went on\tto  consider
\nthe wages prevalent in comparable concerns and finally fixed
\nwages for the appellants on the basis of wages prevalent  in
\nsuch concerns.\tThough therefore the recommendations of\t the
\nTripartite  Conference\tare referred to\t in  the  Tribunal’s
\naward, its final decision is not based on them and what\t the
\nTribunal  has  done  is to make\t comparisons  with  what  it
\nconsidered  comparable\tconcerns  so  far  as  clerical\t and
\nsubordi-\n<\/p>\n
367<\/span><\/p>\n
nate staff are concerned.  We are therefore not prepared  to
\nsay that reference to the recommendations of the  Tripartite
\nConference  in the opening part of the award was  irrelevant
\nand  therefore\tthe  rest of the award must be\theld  to  be
\nvitiated on that ground alone.\n<\/p>\n
The  main contention of the appellants however is  that\t the
\ntribunal has gone wrong in applying the\t industry-cum-region
\nformula which is the basis for fixing wages and dearness and
\nhas made comparison with concerns which are not\t comparable.
\nIt  is also urged that the Tribunal has relied more  on\t the
\nregion aspect of the industry-cum-region formula and not  on
\nthe   industry\taspect\twhen  dealing  with   clerical\t and
\nsubordinate  staff and in this it went wrong.  Reference  in
\nthis  connection  is made to two decisions  of\tthis  Court,
\nnamely,\t  Workmen   of\tHindusthan  Motors   v.\t  Hindusthan
\nMotors<\/a>(‘,) and French Motor Car Company v. Their Workman  (2
\n)  and\tit  is emphasis that the  principles  laid  down  in
\nHindusthan  Motors’  case(“)  were more\t applicable  to\t the
\npresent\t case  than the principles laid down in\t the  French
\nMotor Car Co.’s case(2).  In the Hindusthan Motors  case(1),
\nthis Court observed that it was ordinarily desirable to have
\nas  much  uniformity  as  possible  in\tthe  wage-scales  of
\ndifferent concerns of the same industry working in the\tsame
\nregion,\t as this puts similar industries more or less on  an
\nequal  footing\tin their production  struggle.\t This  Court
\ntherefore applied the wage-scales awarded by the Third Major
\nEngineering  Tribunal  in Bengal in the case  of  Hindusthan
\nMotors\talso.\tIt is urged that the  Tribunal\tshould\thave
\ntaken into account comparable concerns in the same  industry
\nand  provided wage-scales on the same lines so that, so\t far
\nas  manufacturing  concerns  in\t the  present  appeals\t are
\nconcerned,   there  will  be  equality\tin  the\t matter\t  of
\ncompetition.  In the French Motor Car Co.’s case(2)  however
\nthis  Court  held so far as clerical staff  and\t subordinate
\nstaff  are  concerned that it may be possible to  take\tinto
\naccount
\n(1) [1962] 2 L.L.J. 352.\n<\/p>\n
(2) [1963] Supp. 2 S.C.R. 16
\n368<\/span>
\neven those concerns which are engaged in different lines  of
\nbusiness  for the work of clerical and subordinate staff  is
\nmore  or less the same in all kinds of concerns.  We are  of
\nopinion\t that  there  is no inconsistency as  urged  in\t the
\nprinciples laid down in these two cases.  As we have already
\nsaid  the basis of fixation of wages and dearness  allowance
\nis  industry-cum-region.  Where there are a large number  of
\nindustrial  concerns of the same kind in the same region  it
\nwould be proper to put greater emphasis on the industry part
\nof  the industry-cum-region principle as that would put\t all
\nconcerns  on a more or less equal footing in the  matter  of
\nproduction costs and therefore in the matter of\t competition
\nin  the market and this will equally apply to  clerical\t and
\nsubordinate staff whose wages and dearness allowance also go
\ninto calculation of production costs.  But where the  number
\nof  comparable concerns is small in a particular region\t and
\ntherefore  the\tcompetition  aspect  is\t not  of  the\tsame
\nimportance,  the  region  part\tof  the\t industry-cum-region
\nformula\t  assumes  greater  importance\t particularly\twith
\nreference  to  clerical and subordinate staff and  this\t was
\nwhat  was  emphasised in the French Motor Car  Co.’s  case()
\nwhere  that company was already paying the highest wages  in
\nthe particular line of business and therefore comparison had
\nto be made with as similar concerns as possible in different
\nlines of business for the purpose of fixing wage-scales\t and
\ndearness  allowance.  The principle therefore which  emerges
\nfrom  these two decisions is that in applying the  industry-
\ncum-region  formula  for  fixing wage  scales  the  Tribunal
\nshould\tlay  stress on the industry part of the\t formula  if
\nthere  are  a large number of concerns in  the\tsame  region
\ncarrying on the same industry; in such a case in order\tthat
\nproduction  cost may not be unequal and there may  be  equal
\ncompetition, wages should generally be fixed on the basis of
\nthe  comparable industries, namely, industries of  the\tsame
\nkind.\tBut where the number of industries of the same\tkind
\nin a particular region is small it is the region part of the
\nindustry-cum-region formula which
\n(1) [1963] Supp. 2s C.R. 16.\n<\/p>\n
369<\/span><\/p>\n
assumes importance particularly in the case of clerical\t and
\nsubordinate  staff, for, as pointed out in the French  Motor
\nCar  Co.’s case,(” there is not much difference in the\twork
\nof this class of employees in different industries.  In\t the
\npresent\t cases it does appear that the Tribunal\t has  leaned
\nmore  on the region part of the industry-cum-region  formula
\nand less on the industry part.\tBut we think that it  cannot
\nbe  said  that the Tribunal was wrong in doing\tso  for\t two
\nreasons.   In the first place these four companies  are\t not
\nengaged\t in  the same line of industry; but  on\t account  of
\ncertain\t circumstances, namely, that Greaves Cotton and\t Co.
\nis  the controlling company of the other three, it has\tbeen
\nusual  to keep the same scales for clerical and\t subordinate
\nstaff in all these concerns.  In the second place, it is not
\nclear,\tas  was clear in the Hindusthan Motors\tcase(”\tthat
\nthere are a large number of comparable concerns in the\tsame
\nregion.\t  As a matter of fact the main company out of  these
\nfour is Greaves Cotton and Co. Limited, which is in the main
\nan  investment\tand financial company and the  Tribunal\t was
\ntherefore  right in taking for comparison such companies  as
\nwould stand comparison with the main company in the  present
\nappeals (namely, Greaves Cotton & Co).\n<\/p>\n
Both  parties filed scales of wages prevalent in  what\tthey
\nconsidered  to be comparable concerns and it is\t clear\tfrom
\nthe  documents\tfiled that some of the\tcomparable  concerns
\nwere the same in the documents filed by the two parties.  On
\nthe  whole therefore we do not think the Tribunal was  wrong
\nin   putting   emphasis\t on  the  region   aspect   of\t the
\nindustry-cum-region  formula in the present case insofar  as
\nclerical and subordinate staff was concerned., for the\tfour
\ncompanies  before us do not belong to the same industry\t and
\nGreaves\t  Cotton   and\tCo.  controls\tthe   other   three.
\nConsidering  therefore\tthe  standing of  the  main  company
\n(namely,  Greaves Cotton and Co. Ltd.), it was not  improper
\nfor  the  Tribunal  in\tthe present cases  to  rely  on\t the
\ncomparable concerns
\n(1) [1963] Supp. 2 S.C.R. 16
\n1\/SCI\/64 — 24
\n(2) [1962] 2 L.L.J. 352.\n<\/p>\n
370<\/span><\/p>\n
which were cited on behalf of the respondents, some of which
\nwere common with the comparable concerns cited on behalf  of
\nthe  appellants.   What the Tribunal lid thereafter  was  to
\nconsider the minimum for various categories of clerical\t and
\nsubordinate staff prevalent in these comparable concerns and
\nthe   maximum  prevalent  therein  at-id  also\tthe   annual
\nincrements and the span of years in which. the maximum would
\nbe  reached.   The Tribunal then went on to fix\t scales\t for
\nvarious categories of clerical and subordinate staff of\t the
\nappellants which were in-between the scales found in various
\nconcerns.   Further,  as  the  financial  capacity  of\t the
\nappellants  was\t not disputed, the  Tribunal  pitched  these
\nscales\tnearer\tthe highest scales taking into\taccount\t the
\nfact  that  for\t nine years after 1950\tthere  had  been  no
\nincrease in wage scales.  We do not think therefore that the
\nwage sales fixed by the Tribunal, learning as it did, on the
\nregion\taspect of the industry-cum-region formula,  for\t the
\nclerical and subordinate staff can be successfully  assailed
\nby the appellants.\n<\/p>\n
It  has\t however  been urged that  the\tTribunal  overlooked
\nconsidering  what would be the total wage  packet  including
\nbasic  wages  and dearness allowance and that has  made\t the
\ntotal  wages (i.e. basic wage and dearness allowance)  fixed
\nby  the Tribunal much higher in the case of  the  appellants
\nthan in comparable concerns which it took into account.\t  It
\nis  true that the Tribunal has not  specifically  considered
\nwhat  the  total wage packet would be on the  basis  of\t the
\nscales\tof  wages and dearness allowance fixed by it  as  it
\nshould have done; but considering that wage scales fixed are
\nless than the highest in the comparable concerns though more
\nthan  the  lowest,  it cannot be said that  the\t total\twage
\npacket\tin the case of the appellants would ‘be\t necessarily
\nhigher\tthan in the case of the other  comparable  concerns.
\nThis will be clear when we deal with the dearness  allowance
\nwhich  has  been fixed by the Tribunal, for it\twill  appear
\nthat  the  dearness allowance fixed is more or less  on\t the
\nsame lines, i.e. less than
\n371<\/span>
\nthe  highest  but more than the lowest in  other  comparable
\nconcerns.   On this basis it cannot be said that  the  total
\nwage packet fixed in these concerns would be the highest  in
\nthe   region.\tThough\ttherefore  the\tTribunal   has\t not
\nspecifically  considered this aspect of the matter which  it
\nshould\thave  done  its\t decision  cannot  be\tsuccessfully
\nassailed  on the ground that the total wage packet fixed  is
\nthe highest in the region.\n<\/p>\n
This  brings us to the case of factory-workmen.\t We  are  of
\nopinion\t that  there  is  force in  the\t contention  of\t the
\nappellants  insofar  as\t the  fixation\tof  wagescales\t for
\nfactory-workmen\t is concerned.\tThe respondents wanted\tthat
\nseparate wages should be fixed for each category of workmen.
\nThe Tribunal however rejected this contention and held\tthat
\nthe  usual  pattern of’ having unskilled,  semi-skilled\t and
\nskilled\t grades should be followed and the various  workmen,
\nthough they should be known by their designation and not  by
\nthe class in which they were being placed, should be  fitted
\nin  these categories.  In the present concerns,\t there\twere
\nsix  categories\t from  before, namely  (i)  unskilled,\t(ii)
\nsemiskilled  1,\t (iii) semiskilled If, (iv) skilled  1,\t (V)
\nskilled\t 11, and (vi) skilled 111.  The Tribunal kept  these
\ncategories  though it introduced a seventh  category  called
\nthe  higher  unskilled.\t It is not seriously  disputed\tthat
\nthis  category\tof  higher  unskilled  does  not  exist\t  in
\ncomparable concerns; nor have we been able to understand how
\nthe  unskilled category can be sub-divided into two  namely,
\nlower  and  higher unskilled, though we can  understand\t the
\nsemi-skilled  and  skilled  categories\tbeing\tsub-divided,
\ndepending  upon the amount of’ skill.  But there  cannot  be
\ndegrees\t of  want of skill among the unskilled\tclass.\t The
\nTribunal  therefore was not justified in creating the  class
\nof higher unskilled.  It is neither necessary nor  desirable
\nto  create  a  higher unskilled category and  only  the\t six
\ncategories which were prevalent from before should continue.
\nThe  main  attack of the appellants on the wages  fixed\t for
\nthese six categories is that in doing so, the
\n372<\/span>
\nTribunal completely overlooked the wages prevalent for these
\ncategories  in concerns which it had considered\t comparable.
\nA  look at the award shows that it is so.  The Tribunal\t has
\nno  where considered what the wages for these categories  in
\ncomparable  concerns  are,  though  it\tappears\t that\tsome
\nexemplars  were\t filed before it; but the way in  which\t the
\nTribunal has dealt with the matter shows that it paid  scant
\nregard to the exemplars filed before it and did not care  to
\nmake  the comparison for factory-workmen in the same way  in
\nwhich  it had made comparison for clerical  and\t subordinate
\nstaff.\t In  these  circumstances,  wage-scales\t fixed\t for
\nfactory-workmen must be set aside and the matter remanded to
\nthe Tribunal to fix wage-scales for factory-workmen dividing
\nthem into six categories as at present and then fixing\twage
\nafter  taking  into account wages  prevalent  in  comparable
\nconcerns.   The parties will be at liberty to  lead  further
\nevidence in this connection.\n<\/p>\n
Then we come to the question of dearness allowance.  So\t far
\nas clerical staff is concerned, dearness allowance prevalent
\nin  the appellants’ concerns was as follows on the  cost  of
\nliving index of 411-420:-<\/p>\n
\nBasic salary\tD.A at cost of\t\t  Verification for\nin Rs.\t\tliving index\t\t  every 10 point\n\t\tgroup 411-420\t\t  movement\n1 to 100     115% of basic salary\t    5%\n\t     or the textile scale\n\t     on 30 day month which\n\t     ever is higher\n101 to 200\t  35%\t\t\t    1 1\/2%\n201 to 300\t  25%\t\t\t    1%\n301 and above\t  17 1\/2%\t\t    3\/4%\n373<\/span>\n<\/pre>\n
The Tribunal fixed the dearness allowance as follows:-\n<\/p>\n
\t\t When the consu-\t Variation for
\nSalary slab\t mer price index\t each 10 point rise
\n\t\t is between 411.\tor fall in the
\n\t\t 420\t\t\t   index
\nOn 1st Rs. 100\t 115%\t\t\t     5%
\nOn 2nd Rs. 100\t 50%\t\t\t     2.%
\nOn 3rd Rs. 100\t 25%\t\t\t     1%.\n<\/p>\n
Balance upto\t 20%\t\t\t     1.%\n     Rs. 600\n<\/pre>\n
A  comparison of these figures will show that on  the  first
\nhundred and the third hundred there is no difference in\t the
\nscale  fixed  by  the  Tribunal;  but  there  is  a   slight
\nimprovement  on\t the second hundred and a  very\t slight\t one
\nabove three hundred.  This scale fixed by the Tribunal is in
\nline  with some scales of dearness allowance recently  fixed
\nby Tribunals in that region.  The main improvement is on the
\nsecond\thundred and it cannot really be said that  employees
\nin that wage range do not require the higher relief  granted
\nto  them by tribunals in view of the rise in prices.  We  do
\nnot think therefore that the dearness allowance fixed by the
\nTribunal, taking into account what was already prevalent  in
\nthese  concerns\t and also taking into account the  trend  in
\nthat region, can be successfully assailed so far as clerical
\nstaff’ is concerned.\n<\/p>\n
This brings us to the case of subordinate staff.  It appears
\nthat  in  these\t concerns,  subordinate\t staff\twas  getting
\ndearness  allowance  on different scales based\ton  the\t old
\ntextile\t scale of dearness allowance.  The Tribunal has\t put
\nthe  subordinate  staff\t in  the  same\tscale  of   dearness
\nallowance  as  clerical staff.\tThe reason given by  it\t for
\ndoing  so  is that incongruity in the  payment\tof  dearness
\nallowance  between clerical and subordinate staff should  be
\nremoved.  It appears that on account of different scales of
\n374<\/span>
\ndearness  allowance  for subordinate and  clerical  staff  a
\nmember\tof  ‘the subordinate staff drawing  the\t same  wages
\nwould  get  less  dearness allowance than a  member  of\t the
\nclerical staff.\t The discrepancy is very glaring as  between
\nclerical  staff and factory-workmen who also have  different
\nscales\tof  dearness  allowance.   The\tTribunal   therefore
\nthought that dearness allowance which is meant to neutralise
\nthe  rise  in  cost of living, should be  paid\tto  clerical
\nstaff,\tsubordinate staff as well as factory workmen on\t the
\nsame  scale, for the need for neutralisation  was  uniformly
\nfelt by all kinds of employees.\t It also pointed that  there
\nwas  a trend towards uniformity in the matter of  scales  of
\ndearness allowance as between clerical staff and other staff
\nand factory workmen and referred to a number of firms  where
\nsame  scales  prevailed for all the staff.  It\thas  however
\nbeen  urged on behalf of the appellants that the pattern  in
\nthe  region is that there are different scales\tof  dearness
\nallowance  for\tclerical  staff and  other  staff  including
\nfactory\t workmen  and  the Tribunal  therefore\tshould\thave
\nfollowed  this pattern.\t The reasons given by  the  Tribunal
\nfor giving the same scales of dearness allowance to all\t the
\ncategories of staff, including the factory-workmen appear to
\nus  to be sound.  Time has now come when  employees  getting
\nsame   wages   should  get  the\t same\tdearness   allowance
\nirrespective  of  whether  they are working  as\t clerks,  or
\nmembers\t of  subordinate  staff\t or  factory-workmen.\t The
\npressure  of high prices is the same on these various  kinds
\nof employees.  Further subordinate staff and factory workmen
\nthese days are as keen to educate their children as clerical
\nstaff and in the circumstances there should be no difference
\nin  the\t amount of dearness allowance between  employees  of
\ndifferent  kinds  getting same wages.  Further\tan  employee
\nwhether\t he is of one kind or another getting the same\twage
\nhopes  for the same amenities of the and there is no  reason
\nwhy  he\t should\t not get them, simply  because\the  is,\t for
\nexample, a factory workman, though he may be coming from the
\nsame class of people as a member of clerical staff.  On\t the
\nwhole therefore the Tribunal was in
\n375<\/span>
\nour  opinion right in following the trend that has begun  in
\nthis  region  and  in  fixing the  same\t scale\tof  dearness
\nallowance  for subordinate staff and factory workmen  as  in
\nthe case of clerical staff.  So far therefore as subordinate
\nand  clerical  staff  are concerned, we\t see  no  reason  to
\ndisagree  with the rate of dearness allowance fixed  by\t the
\nTribunal.\n<\/p>\n
This  brings  us to the case of the dearness  allowance\t for
\nfactory-workmen.  In their case we have set aside the  award
\nrelating  to wage scales.  It follows that we must also\t set
\naside  the award relating to dearness allowance as  we\thave
\nalready\t indicated  that  the  Tribunal\t has  to  take\tinto
\nconsideration  the  total  pay packet in  fixing  wages\t and
\ndearness  allowance.  When therefore the case goes  back  to
\nthe  Tribunal  for fixing wages and dearness  allowance\t for
\nfactory-workmen, it will be open to the Tribunal to fix\t the
\nsame rates of dearness allowance for factory workmen as\t for
\nclerical  staff;  but  in doing so the\tTribunal  must\twhen
\nmaking\tcomparisons take into account the total wage  packet
\n(i.e. basic wages fixed by it as well as dearness allowance)
\nand then compare it with the total wage packet of comparable
\nconcerns  and thus arrive at a just figure for\tbasic  wage,
\nfor each category of factory-workmen.  But the entire matter
\nis left to the Tribunal and it may follow such method as  it
\nthinks best so long as it arrives at a fair conclusion after
\nmaking the necessary comparison.\n<\/p>\n
This  brings  us  to the question of  adjustment.   We\thave
\nalready\t said  that  the  Tribunal  allowed  one  to   three
\nincrements depending upon the length of service between 1950
\nand 1959.  It has been urged that no adjustment should\thave
\nbeen  allowed taking into account the fact that\t incremental
\nscales\twere in force previously also in these concerns\t and
\nthe Tribunal has increased both the minimum and the  maximum
\nin  its\t award and has granted\tgenerous  annual  increments
\nreducing  the total span within which a particular  employee
\nbelonging  to clerical and subordinate staff will reach\t the
\nmaximum.  Reliance in this connection has been placed on the
\n376<\/span>
\nFrench\tMotor  Car  Co.’s  case (“.  It\t is  true  that\t the
\nTribunal has given larger increments thus reducing the\tspan
\nof years for reaching the maximum.  That alone however is no
\nreason for not granting adjustment.  But it is said that  in
\nthe  French Motor Co. case(‘-‘, this Court held\t that  where
\nscales of pay were existing from before no adjustment should
\nbe granted by giving extra increments and that case  applies
\nwith  full force to the facts of the present case.   Now  in
\nthat  case  this Court pointed out on a review\tof  a  large
\nnumber\tof awards dealing with adjustments  that  “generally
\nadjustments  are granted when scales of wages are fixed\t for
\nthe first time.\t But there is nothing in law to prevent\t the
\nindustrial   tribunal  from  granting  adjustments  to\t the
\nemployees  in the revised wage scales even in a\t case  where
\npreviously pay-scales were in existence; but this has to  be
\ndone  sparingly\t taking\t into consideration  the  facts\t and
\ncircumstances  of each case.  The usual reason for  granting
\nadjustment even where wage-scales were formerly in existence
\nis  that the increments provided in the\t former\t wage-scales
\nwere  particularly low and therefore justice  required\tthat
\nadjustment should be granted a second time.” Another  reason
\nfor  the same was that the scales of pay were also low.\t  In
\nthose\tcircumstances  adjustments  have  been\tgranted\t  by
\ntribunals  a  second time.  This Court then pointed  out  in
\nthat  case  that the incremental scales\t prevalent  in\tthat
\ncompany\t were  the  highest for that kind  of  industry\t and
\ntherefore  struck down the adjustments granted\tand  ordered
\nthat clerical staff should be fixed on the next higher\tstep
\nin the new scales if there was no step corresponding to\t the
\nsalary\tdrawn  by a clerk in the new  scale.   The  question
\ntherefore  whether  adjustment should be granted or  not  is
\nalways a question depending upon the facts and circumstances
\nof each case.\n<\/p>\n
Let  us therefore see what the circumstances in the  present
\ncases  are.  Tables of comparative rates of increments\twere
\nfiled before the Tribunal
\n(1)  [1963] Supp. 2 S.C.R. 16.\n<\/p>\n
377<\/span><\/p>\n
for  various  grades  of  clerks.   It\tis  clear  from\t the
\nexamination of these tables and pay-scales prevalent in\t the
\nappellants’ concerns from 1950 that pay scales were not high
\nas  compared  to  pay scales  in  comparable  concerns.\t  If
\nanything,  they\t were  on  the low  side.   Further,  as  an
\nexample,  in  the case of junior clerks, the first  rate  of
\nincrement  was\tRs. 5 in the appellants’ concerns  and\tthis
\nrate went on for 13 years; in other concerns where the first
\nrate  of  increment was Rs. 5 it lasted for a  much  shorter
\nperiod,\t which\tin no case exceeded eight years and  was  in
\nmany cases three or four years.\t In some concerns the  first
\nrate of increment was higher than Rs. 5. Almost similar\t was
\nthe  case  with senior clerks.\tSo it appears  that  in\t the
\nappellants’  concerns  the  first  rate\t of  increment\t was
\ngenerally  on  the low side and lasted for a  longer  period
\nthan   in  the\tcase  of  comparable  concerns.\t  In   these
\ncircumstances if the Tribunal decided to give increments  by
\nway of adjustments it cannot be said that the Tribunal\twent
\nwrong.\t The  facts ‘in these cases are different  from\t the
\nfacts in the case of the French Motor Car Co.’s case(2)\t and
\ntherefore  (1)\twe see no reason for  interfering  with\t the
\norder of adjustment.  After the change in wage-scales, dear-
\nness   allowance  and  adjustment,  the\t employees  of\t the
\nappellants’ concerns will stand comparison with some of\t the
\nbest concerns in that region.  But considering that there is
\nno  question of want of financial capacity and that  Greaves
\nCotton\t& Co. which is the main company concerned  in  these
\nappeals, has a high standing in that region, we do not think
\nthat  the  total  wage\tpacket\tfixed  is  abnormal  or\t  so
\ndisproportionate  as  compared to the total wage  packet  in
\nother  comparable concerns as to call for  any\tinterference
\nwith adjustments.\n<\/p>\n
The  next  question  is about  the  so-called  retrospective
\neffect\tof the award.  The first reference was made  to\t the
\nTribunal  on April 8, 1959, while the last was\tin  December
\n1959.\tWhat the Tribunal has done is to  grant\t wage-scales
\netc.,  from  April 1, 1959.  This cannot in our\t opinion  be
\nsaid to be really (1)[1963] Supp. 2 S.C.R. 16.\n<\/p>\n
378<\/span><\/p>\n
retrospective,\tbecause it is practically from the  date  of
\nthe first reference in the case of the main company.  On the
\nwhole therefore we see no reason to interfere with the order
\nof  the Tribunal fixing the date from which the award  would
\ncome into force.\n<\/p>\n
Lastly\twe come to the question of gratuity.  The attack  in
\nthis  connection is on two aspects of the  gratuity  scheme.
\nThe first is about the fixation of 20 months as the  maximum
\ninstead of’ 15 months, which was usual so far, The second is
\nwith  respect to deduction from gratuity only to the  extent
\nof  the financial loss occasioned by misconduct in  case  of
\ndismissal for misconduct.  So far as the second provision is
\nconcerned  it  cannot  be disputed that this  is  the  usual
\nprovision that is being made in that region.  So ear as\t the
\nincrease  in  the  maximum from 15 months to  20  months  is
\nconcerned,  it\tappears that the Tribunal has  relied  on  a
\nnumber of cases in which the maximum is higher than  fifteen
\nmonths wages.  In these circumstances considering that\ttri-
\nbunals\thave now begun to, give a higher ceiling and in\t one
\nconcern,  namely Mackinnon Mackenzie, the ceiling  has\tbeen
\nfixed  even so high as thirty moths by agreement, we do\t not
\nthink  that  any interference is called for in\tthe  present
\ncase.\n<\/p>\n
We  therefore  dismiss the appeals so far  as  retrospective
\neffect\tand  adjustments  as  also  fixation  of  wages\t and
\ndearness allowance with respect to clerical and\t subordinate
\nstaff  are concerned.  We allow the appeal with\t respect  to
\nfactory-workmen and send the cases back to the Tribunal\t for
\nfixing the wage structure including basic wage and  dearness
\nallowance  and for granting adjustments in the light of\t the
\nobservations  made  by us.  The new award pursuant  to\tthis
\nremand will also come into force from the same date, namely,
\nApril  1,  1959.  The appeals with respect to  gratuity\t are
\ndismissed.   In the circumstances we order parties  to\tbear
\ntheir own costs.Two months from today is allowed to pay
\nup the arrears.\n<\/p>\n
Appeal partly allowed and remanded.\n<\/p>\n
379<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Greaves Cotton And Co. And Others vs Their Workmen on 14 November, 1963 Equivalent citations: 1964 AIR 689, 1964 SCR (5) 362 Author: K Wanchoo Bench: Wanchoo, K.N. 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. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-113292","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nGreaves Cotton And Co. 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