{"id":126215,"date":"1986-04-11T00:00:00","date_gmt":"1986-04-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/monthly-rated-workmen-at-the-vs-indian-hume-pipe-company-ltd-on-11-april-1986"},"modified":"2016-01-26T11:23:26","modified_gmt":"2016-01-26T05:53:26","slug":"monthly-rated-workmen-at-the-vs-indian-hume-pipe-company-ltd-on-11-april-1986","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/monthly-rated-workmen-at-the-vs-indian-hume-pipe-company-ltd-on-11-april-1986","title":{"rendered":"Monthly-Rated Workmen At The … vs Indian Hume Pipe Company Ltd., … on 11 April, 1986"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Monthly-Rated Workmen At The … vs Indian Hume Pipe Company Ltd., … on 11 April, 1986<\/div>\n
Equivalent citations: 1986 AIR 1794, \t\t 1986 SCR (2) 484<\/div>\n
Author: V Khalid<\/div>\n
Bench: Khalid, V. (J)<\/div>\n
           PETITIONER:\nMONTHLY-RATED WORKMEN AT THE WADALAFACTORY OF THE INDIAN HUM\n\n\tVs.\n\nRESPONDENT:\nINDIAN HUME PIPE COMPANY LTD., BOMBAY\n\nDATE OF JUDGMENT11\/04\/1986\n\nBENCH:\nKHALID, V. (J)\nBENCH:\nKHALID, V. (J)\nREDDY, O. CHINNAPPA (J)\nNATRAJAN, S. (J)\n\nCITATION:\n 1986 AIR 1794\t\t  1986 SCR  (2) 484\n 1986 SCC  Supl.    0\t  1986 SCALE  (1)1217\n CITATOR INFO :\n RF\t    1992 SC 504\t (29)\n\n\nACT:\n     Service Conditions\t of employees - Change from the slab\nsystem of  Dearness Allowance in vogue for eighteen years to\nthe  textile   scale  of   D.A.\t affording   115  per\tcent\nneutralisation in  respect of  the head office staff and the\nmonthly rated  factory staff  - Validity  of the  notice  of\nchange dated  15.7.75 given  by the company under section 9A\nof the\tIndustrial Disputes  Act,  1947\t -  Advisability  of\nTribunals and Courts to revise the wage structure of workmen\nto their  prejudice when  a dispute arises - Burden of proof\nas to  necessity of  change, upon  whom lies  in a reference\narising out of section 9A notice of change.\n\n\n\nHEADNOTE:\n     The respondent  is an  Engineering concern owning sixty\nfactories spread  throughout India.  In\t Bombay,  it  has  a\nfactory at  Wadala and\thead office at Ballard Estate. There\nwere  four   Industrial\t Disputes  Awards  in  this  company\npertaining to  the pay-scales  and dearness allowance of the\nworkmen. By  the Award passed in reference No. IT 82 of 1950\npay-scales and fixed dearness allowance were introduced with\neffect from  1.7.50 with  the consumer price index in Bombay\nat 312\tpoints in  1950. In 1957 the index rose by 55 points\nand stood  at 367  points as  a consequence  of which  by an\nAward passed  in reference IT No. 77 of 1958 dated 21st May,\n1959 the  slab system  of dearness  allowance was introduced\nwith effect  from 1.2.58.  This Award  was not challenged by\nthe company  at any  time. By Award published on 30.12.65 in\nreference IT  No.47 of\t1964 at\t the instance  of the labour\nmarginal increase  in the  basic  pay  scales  was  provided\nmainly on  the ground  that  the  slab\tsystem\twas  working\nsatisfactorily. By an Award published on 7.7.77 in reference\nNo. IT\t42 of 1973 the clerical and subordinate staff in the\nhead office  were also\tgiven the slab system of D.A. It was\ncategorically observed in this Award that there should not\n485\nbe any\tdisparity in  the D.A.\tbetween\t the  monthly  rated\nfactory staff and the head office staff.\n     While the\twage structure\tstood thus, the company gave\nnotice of  change for  doing away  with the  slab system  on\n15.7.75 of  D.A. in  respect of\t head office  staff and\t the\nmonthly rated factory staff. The notice of change in respect\nof head\t office staff was not pressed since a Settlement was\nreached between\t the parties,  in July\t1976 whereunder\t the\nD.A. at\t consumer price\t index 1380 points was merged in the\nrevised consolidated  pay scale of different categories with\neffect\tfrom   1.9.75.\tAlthough  in  September,  1975,\t the\nconsumer price\tindex figure  was 1270\tpoints, it was taken\nnotionally as  1380 for the purpose of merger, providing for\nreview of  consolidated pay  scales if\tthe  consumer  price\nindex moved high. The notice of change in respect of monthly\nrated factory  staff was, however, referred to adjudication.\nThe Industrial\tTribunal gave  its Award  on  27th  October,\n1980, holding  that the\t employer was  justified in  seeking\nabolition of  the slab\tsystem of  D.A. and  substituting it\nwith the  textile scale\t of  D.A.  affording  115  per\tcent\nneutralisation. The Tribunal held that the workmen should be\npaid D.A.  at 115%  of the  revised textile rate in the same\nmanner in  which the daily rated workmen are paid their D.A.\nat the\tprevalent cost\tof living  index  in  the  month  of\nNovember, 1980\tor if  such index number is not available at\nthat time then at the index No. 1771-1780. While making this\nAward the  Tribunal was\t conscious  of\tthe  fact  that\t the\nworkmen were  likely to\t lose quite  a substantial amount of\nthe D.A.  but it  was stated  that it  was  inevitable\twhen\nattempt was  made to bring about uniformity and parity among\nthe workmen  of the  same company  working at the same place\ndoing similar  work. The  Tribunal felt\t that if  the parity\nscheme was  to come  into force\t either from the date of the\ndemand or  from the  date of  reference, another unfortunate\nhappening would\t take place  in that  the workmen  would  be\nliable to  refund a  lot of  amount excessively recovered by\nthem as\t and by\t way of\t D.A. on account of slab system. The\nTribunal therefore  felt that  it would\t be  too  harsh\t and\nunkind to  such workmen\t and held  that the Award would come\ninto  force  prospectively  with  effect  from\t1.11.80\t and\nobserved that the reduction in the monthly emoluments of the\nworkmen should be a gradual process so that they are able to\nbear the  burden and  can learn\t to adjust  themselves\twith\nlittle less  income month  to month.  It therefore, directed\nthe reduction to be spread\n486\nover equally  for a period of six months from 1.11.80. Hence\nthe appeal by special leave.\n     Allowing the appeal, the Court,\n^\n     HELD :  1. In  a reference arising out of the notice of\nchange given by a company under section 9A of the Industrial\nDisputes Act,  1947 the\t company should\t make available\t all\nevidence necessary  to justify\tits stand  for a change from\nthe existing  system. In  the instant  case, overlooking the\ncircumstances under  which reference  was made such a burden\nwas wrongly  cast on  the workmen  to prove that a change in\nthe system was not necessary. [496 B-C]\n     2.1 Normally  it would be inadvisable for Tribunals and\nCourts to  revise the  wage structure  of workmen  to  their\nprejudice when\ta dispute  arises.  However,  Tribunals\t and\nCourts can  take judicial  notice of  one fact;\t and that is\nthat the  wages of  workmen, except  in\t exceptionally\trare\ncases, fall  within the category of mere \"subsisting wages\",\nand as\tsuch tinkering\twith the  wage structure  of workmen\ncannot be  permitted except  under compelling circumstances.\nEmployers have seldom displayed a cooperative attitude where\nwage structures\t of workmen  are devised.  They\t have  never\nshowed a  willingness for the involvement of the labour with\nthe capital so as to engender a participative labour capital\nrelationship. Reckoning\t with this  reality, the  Courts and\nTribunals have\tnecessarily to\tkeep their  hands  off\tfrom\nupsetting a  wage structure  that has  satisfactorily worked\nfor a  long time. The sweat of the labour is never reflected\nin any balance sheet, although the latent force behind every\nsuccessful industry  is this  sweat. With their present wage\nstructure, the\tlabour just exist. No one should try to deny\nthem even this bare source of existence. [503 G-H; 504 A-C]\n     Crown Aluminimum  Works v. Their Workmen,<\/a> [1958] S.C.R.\n651, followed.\n     2.2 The  Supreme Court  often times emphasised the need\nfor a  living wage  to workmen instead of a subsisting wage.\nIt is indeed a matter of concern and mortification that even\ntoday the  aspirations of a living wage for workmen remain a\nmirage and  a distant  dream. Nothing short of a living wage\ncan\n487\nbe a  fair wage.  It should  be the  combined effort  of all\nconcerned including  the  Courts  to  extend  to  workmen  a\nhelping hand so that they get a living wage which would keep\nthem to\t some extent at least free from want. Viewed against\nthis background\t no case has been made out by the respondent\nin the\tinstant case,  for a  change of\t the slab  system of\ndearness allowance  to the  revised Textile rate of dearness\nallowance. [503 D-F]\n     The slab  system which  has been  approved by Tribunals\nand by\tCourts was  available at the head office and for the\ndaily rated  workmen at Wadala upto the year 1976 and worked\nsatisfactorily for  over 17  years. In\tthe absense  of\t any\ndemand\tfrom   any  region   for  the\tslab   system,\t the\napplicability of  well-settled\tprinciple  of  industry-cum-\nregion, and  the sound\tfinancial position of the company it\ncannot be said that if the slab system was introduced in all\nthe factories  it would\t result in  the closing of the whole\ncompany itself.\t The question that it would work against the\nprinciple of parity and uniformity and that there would be a\nchange of the subordinate staff getting more emoluments than\ntheir officers\twho might  be  recently\t employed  does\t not\narise. [496 C-E]\n     2.3 The  theory of\t ceiling on  the quantum of dearness\nallowance cannot  be accepted  since  under  the  prevailing\nconditions there  is no control over the prices of essential\ncommodities and\t as such a ceiling would not give sufficient\ncushion when  prices of\t essential commodities\tcontinuously\nrise. [506 F-G]\n     Killick  Nixon  Ltd.  v.  Killick\t&  Allied  Companies\nEmployees Union,<\/a> [1975] Supp. S.C.R. 453, distinguished.\n     Unichem Laboratories  Ltd. v.  The\t Workmen,<\/a>  [1972]  3\nS.C.R. 567;  Greeves  Cotton  and  Co.\tand  Ors.  v.  Their\nWorkmen,<\/a> [1964] 5 S.C.R. 362; Bengal Chemical Pharmaceutical\nWorks Ltd.  v. Its  Workmen,<\/a> [1969]  2 S.C.R. 113 and Kamini\nMetals and  Alloys Ltd.\t v. Their  Workmen,<\/a> [1967]  2 S.C.R.\n463, referred to.\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3040 of
\n1986.\n<\/p>\n
     From the  Award  dated  27.10.1980\t of  the  Industrial
\nTribunal Maharashtra in Reference (IT) No. 531 of 1975.\n<\/p>\n
488<\/span><\/p>\n
     N.B. Shetye,  Dr. Y.S.  Chitale, Mukul  Mudgal and Atul
\nChitale for the Appellants.\n<\/p>\n
     G.B. Pai,\tP. Ramaswami, H.S. Parihar and Vipin Chandra
\nfor the Respondent.\n<\/p>\n
     J.P. Cama and Mukul Mudgal for the Intervener.
\n     The Judgment of the Court was delivered by
\n     KHALID, J.\t This appeal,  by special leave, is directed
\nagainst the  award of  the Industrial Tribunal in IT No. 531
\nof 1975,  dated 27th  October, 1980.  The appellants are the
\nmonthly-rated workmen  at Wadala  Factory of the Indian Hume
\nPipe Company  Ltd., Bombay  and the  respondent the  Company
\nmentioned above.\n<\/p>\n
     We will  briefly refer to the history of the demands of
\nthe workmen  in this  Company to  appreciate how the dispute
\ninvolved  in   this  appeal   originated.   The\t  respondent
\n(hereinafter referred  to as  the Company) is an Engineering
\nconcern owning\tsixty factories\t spread throughout India. In
\nBombay, it  has a  factory at  Wadala  and  head  office  at
\nBallard Estate.\t In this  appeal, we  are concerned with the
\nmonthly rated workmen at the Wadala Factory. In this factory
\nthere are about 375 daily rated workers and 80 monthly rated
\nclerical and  subordinate staff.  The total  labour strength
\nall over  India is  about 3000\tdaily rated workers and 1000
\nmonthly rated clerical and subordinate staff.\n<\/p>\n
     In the  year 1950,\t there\twas  an\t industrial  dispute
\npertaining to  the pay\tscales and dearness allowance of the
\nworkmen in this factory. An award was passed in this dispute
\nby the\tconcerned Industrial Tribunal in reference No. IT 82
\nof 1950.  By  this  award  pay\tscales\tand  fixed  dearness
\nallowance were introduced w.e.f. 1-7-1950, with the consumer
\nprice index  in Bombay\tat 312\tpoints in 1950. In 1957, the
\nindex rose  by 55  points and stood at 367 points. There was
\nanother industrial dispute in 1958 in reference IT No. 77 of
\n1958 resulting in the award published on the 21st May, 1959,
\nintroducing the\t slab system  of D.A.  w.e.f. 1-2-1958. This
\naward was not challenged by the Company at any time.\n<\/p>\n
     In 1964,  the labour  sought revision in the pay scales
\n489<\/span>
\nfor the\t monthly rated\tclerical and subordinate staff, as a
\nconsequence of\twhich reference\t IT No.\t 47 of 1964 was made
\nresulting  in\tan  award  published  on  30-12-1965,  which
\nprovided marginal  increase in\tthe basic pay scales, mainly
\non  the\t  ground  that\t the   slab   system   was   working
\nsatisfactorily.\n<\/p>\n
     2. In  this Company  the daily  rated  operatives\twere
\ngetting the  old textile scale since the year 1942 which was
\nraised to  the revised\ttextile scale  as D.A.\tby an award.
\nThus, the  daily rated\toperatives  and\t the  monthly  rated
\nclerical and  subordinate staff\t were paid D.A. on different
\nbasis and  at different\t rates in this Company. As there was
\nno revision  in the pay scales from 1950, for about 22 years
\na demand  was made  for revision  in pay  scales for monthly
\nrated clerical\tand subordinate staff in the year 1972. This
\ndemand was  referred to\t adjudication in reference IT No. 42
\nof 1973\t as a consequence of which an award was published on
\n7-7-1977. The  clerical and  subordinate staff\tin the\thead
\noffice of this Company were also being given the slab system
\nof D.A.\t This award  observed that  there should  not be any
\ndisparity in  the D.A.\tbetween the  monthly  rated  factory
\nstaff and the head office staff.\n<\/p>\n
     3. While  the wage\t structure stood  thus, the  Company
\ngave notice  of change\tfor doing  away with  slab system of
\nD.A. by\t notice dated  15-7-1975, in  respect  of  the\thead
\noffice staff and the monthly rated factory staff. The notice
\nof change  in respect  of the  head  office  staff  was\t not
\npressed since  a settlement was reached between the parties.
\nAs per\tthis settlement arrived at in July 1976, the D.A. at
\nconsumer price\tindex 1380  points was merged in the revised
\nconsolidated pay  scale of  different categories w.e.f. 1-9-
\n1975. Although\tin September, 1975, the consumer price index
\nfigure was  1270 points, it was taken notionally as 1380 for
\nthe purpose of merger, indicated above, providing for review
\nof consolidated pay scales if the consumer price index moved
\nhigh. The  notice of  change in\t respect  of  monthly  rated
\nfactory staff  was, however,  referred to  adjudication. The
\nCompany’s claim\t was to do away with the slab system of D.A.
\nand to\tsubstitute it  by revised  textile scale.  The Union
\nfiled a\t written statement justifying continuity of the slab
\nsystem which  was in  vogue for\t 17  years.  The  Industrial
\nTribunal gave  the award,  impuged in  this appeal,  on 27th
\nOctober, 1980. The Tribunal came to
\n490<\/span>
\nthe conclusion\tthat the  employer was\tjustified in seeking
\nabolition of  the slab\tsystem of  D.A. and  substituting it
\nwith the  textile scale\t of  D.A.  affording  115  per\tcent
\nneutralisation.\n<\/p>\n
     4. The  Tribunal said  that the  workmen should be paid
\nD.A. at 115 per cent of the revised textile rate in the same
\nmanner in which “the daily rated workmen are paid their D.A.
\nat the\tprevalent cost\tof living  index  in  the  month  of
\nNovember, 1980\tor if  such index number is not available at
\nthat time  then at  the index  No. 1771-1780.”\tWhile making
\nthis award  the Tribunal  was conscious of the fact that the
\nworkmen were  likely to\t lose quite  a substantial amount of
\ntheir D.A.  However, the  Tribunal  got\t over  this  concern
\nstating that  it was  inevitable, when\tattempt was  made to
\nbring about  uniformity and  parity among the workmen of the
\nsame company  working at  the same place doing similar work.
\nThe Tribunal felt conscious of another distressing result of
\nthe award.  The Tribunal  felt that if the parity scheme was
\nto come\t into force  “either from  the date of the demand or
\nfrom the  date of  reference, another  unfortunate happening
\nwould take  place in  that the\tworkmen would  be liable  to
\nrefund a  lot of amount excessively recovered by them as and
\nby way of D.A. on account of slab system.” The Tribunal felt
\nthat “it  would be too harsh and unkind to such workmen” and
\ntherefore  held\t  that\tthe  award  would  come\t into  force
\nprospectively  w.e.f.  1-11-1980.  The\tTribunal,  not\trest
\ncontent with  the expression  of concern  for workmen,\tgave
\nanother palliative  to them lest the reduction in their D.A.
\nshould cause  them dislocation\tfinancially all\t of a sudden
\nand therefore  observed that  the reduction  in the  monthly
\nemoluments of  the workmen  should be  a gradual process “so
\nthat they  are able  to bear  the burden  and can  learn  to
\nadjust themselves  with little\tless income month to month.”
\nThe reduction  was, therefore,\tdirected to  be spread\tover
\nequally for a period of six months from 1-11-1980.\n<\/p>\n
     5. When  the matter came up before this Court on 15-12-
\n1980, special  leave was  granted and  the following interim
\nrelief was given to the appellants.\n<\/p>\n
\t  “Special leave  granted. By  way of interim relief
\n\t  it is\t hereby directed  that the difference in the
\n\t  D.A. awarded by the Industrial Tribunal and the
\n491<\/span>
\n\t  D.A. being  paid on  slab system which is directed
\n\t  to be reduced phasewise on monthly basis of 1\/6th,
\n\t  reduction will  be implemented  in payments  to be
\n\t  made in  the months of December, 1980 and January,
\n\t  February, March, April and May, 1981, but shall be
\n\t  based on monthly wages thereafter from payments in
\n\t  the subsequent  months and this will be subject to
\n\t  the further  direction of  this Court.  Appeal  be
\n\t  expedited……………”\n<\/p><\/blockquote>\n
This interim order was modified by the Vacation Judge on 14-
\n3-1981, as follows :\n<\/p>\n
\t  “The order  passed by\t this Court  on 15.12.80  to
\n\t  continue till\t the end  of  August,  1981  on\t the
\n\t  appellants agreeing to reimburse the management in
\n\t  case they  fail in  the appeal which reimbursement
\n\t  will be by way of deduction from their dues.”<\/p><\/blockquote>\n
     6.\t We   will  now\t  proceed  to\tconsider  the  rival
\ncontentions put\t forward by  the parties  in support  of and
\nagainst the  award. The\t Company, in  justification of their
\nchange of notice and defending the award passed, put forward
\ntheir case as follows:\n<\/p>\n
     The Company manufactures various pipes, cement concrete
\npipes as  well as  steel pipes\tfor Hydro Electric Projects.
\nThese products\tare manufactured  as per definite orders and
\nspecifications\tby   governmental  bodies  and\tother  local
\nauthorities, unlike  other industrial  units  which  are  at
\nliberty to manufacture their products and market them. Their
\nproducts are  usually  bulky  in  nature,  making  transport
\ndifficult and  costly. For  easy transport  of\tthese  bulky
\nproducts, the  Company decided to establish as many as sixty
\nfactories all  over India to cater to the needs of the local
\nmarkets and  to make  them easily accessible to avoid damage
\nto  their  products  and  heavy\t transporting  charges.\t The
\nproducts of  the Company  have only  a\tlimited\t market\t and
\ntherefore, has\tto  face  keen\tcompetition  unlike  cement,
\nsteel, sugar,  chemicals etc. which have an expanding market
\nand which can be programmed in anticipation of sale.\n<\/p>\n
     The Company  has three  thousand daily paid workmen and
\nthousand monthly paid workmen all over India. Out of these,
\n492<\/span>
\nthe appellants\tform only  80 monthly paid workmen, employed
\nin Wadala manufacturing factory. The slab system of dearness
\nallowance, according  to the  Company, has  been universally
\ncondemned by  successive Tribunals.  The appellant  –  Union
\nenjoys a  privileged position  out  of\tthis  four  thousand
\nworkmen of  the Company all over India. While conceding that
\nthe appellant  – Union\thad been enjoying the slab system of
\ndearness allowance till the reference was made, it is stated
\nthat at the time the slab system was introduced it was never
\nconceived by  the Tribunals  that the  cost of\tliving index
\nwould spiral  upto such\t great heights\tas to  make payments
\ndifficult. The dearness allowance enjoyed by the appellant –
\nUnion is  so high in certain cases that neutralisation is at
\nrates much higher than 100 per cent which is discouraged and
\nis  disapproved\t  consistently\tby   this  Court  and  other
\nIndustrial Tribunals.  It is further stated that the Company
\ndoes not  have the  capacity  to  pay  the  slab  system  of
\ndearness allowance  and in  case the remaining monthly rated
\nworkmen put  forward such  a claim,  the respondents will be
\nforced to close down their factories.\n<\/p>\n
     The appellant  – Union  pleaded that  the award  of the
\nTribunal was  defective\t both  in  law\tand  on\t facts.\t The
\nTribunal did  not have\tany material before it compelling it
\nto change  a system  that had  satisfactorily worked  for 18
\nyears and  in effect  had become  part\tand  parcel  of\t the
\nservice conditions  of the  workmen.  The  findings  of\t the
\nTribunal that  the slab\t system had  become unscientific and
\nimproper, that continuance of the system was not in national
\ninterest or  in public interest, that ever since slab system
\nwas introduced\tneutralisation had  become more than 100 per
\ncent and  that the  slab system\t confined to  the  appellant
\nalone would  create disparity  and discontent  among workmen
\nare according  to the  appellants not based on evidence. The
\nobservation in\tthe award  that the  Union did\tnot bring on
\nrecord any evidence to show that wages paid to them were far
\nbelow the  living wage\tor to  show  that  the\tmodification
\nsought would  cause them  hardship which  they would  not be
\nable to\t stand\tis  incorrect  and  is\tmade  without  being
\nfaithful to  the facts\tand evidence in the case. With these
\nrival contentions  in view,  we will now proceed to consider
\nthe award.\n<\/p>\n
     7. The dispute arose when the respondent-Company served
\na
\n493<\/span>
\nnotice under Section 9-A of the Industrial Disputes Act. The
\ndispute referred to arbitration reads as follows :\n<\/p>\n
\t  “The rate of payment of Dearness Allowance payable
\n\t  to monthly  rated clerical  and subordinate  staff
\n\t  working at  the Wadala factory will be changed and
\n\t  will be  worked out  as per  revised Textile scale
\n\t  calculated on\t the basis  of working\tdays in\t the
\n\t  month with a ceiling on dearness allowance payment
\n\t  at consumer  price index  number for working class
\n\t  of Bombay  at 800 (base 1933-34 : 100) with effect
\n\t  from 1975.”\n<\/p><\/blockquote>\n
It was\tthe Tribunal presided over by Shri Sawarkar, in I.T.
\nNo. 77\/58  by its  award dated 21.5.1959 that introduced the
\nslab system  of dearness  allowance first. Before making the
\naward, the  Tribunal considered\t the various contentions put
\nforward by  the company.  The Tribunal considered the nature
\nof this\t industry  and\theld  that  it\twas  an\t Engineering
\nconcern, and  a member\tof the\tEngineering  Association  of
\nIndia.\tThe   Tribunal\texamined   the\tscales\tof  dearness
\nallowance  in  eight  different\t units\tof  the\t Engineering
\nIndustry and  concluded that  the total\t emoluments  of\t the
\nmonthly rated staff of the Indian Hume Pipe Company Ltd., at
\nits Wadala  factory (i.e. Rs. 125 to Rs. 385) were far lower
\nthan those  of the  other  concerns  with  which  they\twere
\ncompared. This\tTribunal repelled  the plea that an increase
\nin dearness  allowance would  cause  disparity\tbetween\t the
\nworkmen at the head office and at the factory and passed the
\naward introducing the slab system as follows :\n<\/p>\n
     Slab\tD.A. at cost of living\t       VARIATION\n\t\tindex 311-320.\t\t       per 10 pts.\n1 - 100\t   65% of the basic salary or\t\t  5%\n\t   Textile scale calculated on the\n\t   basis of the number of days in\n\t   the month whichever is higher.\n101 - 200      30% -do-\t\t\t\t  2%\n202 - 300      15% -do-\t\t\t\t  1%\n301 & above    10% -do-\t\t\t\t  1%\n494<\/span>\n<\/pre>\n
     Dearness allowance\t was being paid to the appellants at
\nthis rate  without any\tobjection by  the Company  till\t the
\nnotice of  change was given. It has to be borne in mind even
\nat the\toutset that  the reference was occasioned because of
\nthe notice  of change given by the Company. It was therefore
\nnecessary for  the Company  to\tmake  available\t before\t the
\nTribunal all  evidence necessary  to justify its stand for a
\nchange from  the existing  system. We were taken through the
\naward in full by the learned Counsel for the appellants. All
\nthat we\t find in the award, by way of justification for this
\nchange, is that the Company would be confronted with similar
\ndemands by  the workers\t in its other factories, that it has
\nno capacity to pay the dearness allowance at this rate, that
\nit would result in more than 100 per cent neucralisation and
\nthat this  system had  not found  favour with  many  of\t the
\nTribunals  who\tconsidered  the\t question  of  the  dearness
\nallowance in Maharashtra.\n<\/p>\n
     We will  presently refer  to some portions of the award
\nto see whether the Tribunal was justified in doing away with
\nthe existing  scheme and  thus denying\tto the\tworkmen what
\nthey were  getting till the award was made. But before we do
\nso, we\twould like  to show  the effect\t of the award on the
\nemoluments of the workmen involved in this case if the award
\nwere to be implemented.\n<\/p>\n
\t\t\t  TABLE -I
\nMonthly Pay at\t  Monthly Pay at Index\t    Reduction in
\nIndex 1771-1780\t  1771-1780 that would\t    the monthly
\navailable prior\t  be available as per\t    emoluments.
\nto the award\t  the award.\n<\/p>\n
under challenge.\n<\/p>\n
Basic\t  D.A.\t   Total     Basic     D.A.\tTotal\n  Rs.\t  Rs.\t   Rs.\t     Rs.       Rs.\tRs.\t Rs.\n500\t  1,590\t   2,090     500       542\t1,042  1,048\n400\t  1,434\t   1,834     400       542\t  942\t 892\n300\t  1,278\t   1,578     300       542\t  842\t 736\n200\t  1,117\t   1,317     200       542\t  742\t 575\n100\t    795\t     895     100       542\t  642\t 253\n 40\t    544\t     584      40       542\t  582\t   2\n<\/pre>\n
     The table\tbelow shows  the total\tmonthly pay  of\t the
\nabove workmen and the consolidated pay that similarly placed
\nworkmen get at the head office.\n<\/p>\n
495<\/span><\/p>\n
\t\t\t  TABLE II
\n____________________________________________________________
\nBasic\tDearness     Total     Total\t Monthly  Difference
\npay\tallowance    monthly   monthly\t consoli- between
\n\tas per\t     pay       pay\t dated\t  total pay
\n\tslab sys-\t       packet\t pay\t  packet of
\n\ttem D.A.\t       of\t packet\t  head
\n\tapplica-\t       Wadala\t at head  office
\n\tble at\t\t       Factory\t office\t   workmen
\n\tIndex\t\t       work-\t as per\t   and total
\n\t1771-1780\t       men as\t state-\t   paypacket
\n\tprior to\t       per the\t ment\t  of similar
\n\tthe award\t       award\t submit-  workmen at
\n\t\t\t\t\t ted by\t     Wadala
\n\t\t\t\t\t the\t     Factory
\n\t\t\t\t\t company     awarded
\n\t\t\t\t\t before the
\n\t\t\t\t\t Tribunal
\n____________________________________________________________
\nRs.\t  Rs.\t    Rs.\t      Rs.\tRs.\t  Rs.\n<\/p>\n
500\t  1,590\t    2,090     1,042\t1,815\t  773\n400\t  1,434\t    1,634\t942\t1,635\t  693\n300\t  1,278\t    1,578\t842\t1,380\t  538\n200\t  1,133\t    1,347\t742\t1,185\t  443\n100\t    795\t      895\t642\t  790\t  148\n<\/pre>\n
____________________________________________________________
\n     The first\ttable glares  one in the face. The reduction
\nis substantial\tin most\t of the\t cases. Mr. Pai, the learned
\ncounsel for  the company  had to agree that as per the award
\nthe difference in the dearness allowance was substantial and
\nthe damage  to the workmen was not inconsequential. However,
\nhe tried  to get  over this  inconvenient position  with the
\nplea that  continuance of  the scheme  would spiral  up\t the
\ndearness allowance  so much that it would render the working
\nof the\tCompany difficult  and create wide disparity between
\nthese workmen  and others.  The second table which shows the
\ndifference between  the pay packet of Wadala Factory workmen
\nand the\t head office  was explained away by Mr. Pai with the
\nplea   that    the   head    office   workmen\thad   bigger
\nresponsibilities and  did better  work. These justifications
\nput forward by him, have been echoed by the Tribunal also.\n<\/p>\n
     As indicated earlier, we will now refer to the award
\n496<\/span>
\nunder challenge.  The company  had a  case that\t out of\t its
\nsixty factories,  each\tfactory\t should\t be  treated  as  an
\nindependent unit.  This contention  did not find favour with
\nthe Tribunal.  According to  us, the  Tribunal rightly\theld
\nthat since  there was  no functional  integrality, the units
\nhad to\tbe taken  as one.  The Tribunal\t also found that the
\nCompany’s financial  position taken  as a whole was not only
\nsatisfactory but quite sound till 1979.\n<\/p>\n
     The Tribunal  committed an\t error\tby  overlooking\t the
\ncircumstances under which reference was made and casting the
\nburden wrongly\ton the workmen to prove that a change in the
\nsystem was  not necessary.  The Tribunal assumed that so far
\nas the\tBombay Region was concerned, it was an admitted fact
\nthat the daily rated workmen at Wadala factory and the staff
\nat the\thead office  were not  paid wages  as per  the\tslab
\nsystem. This assumption is wrong because the slab system was
\navailable at the head office and for the daily rated workmen
\nat Wadala  upto the  year 1976. The Tribunal apprehends that
\nif the\tslab system  was introduced in all the factories the
\nnet result  would be  that the whole company will have to be
\nclosed down.  This apprehension\t is without  any  foundation
\nbecause at  the time  the Tribunal  considered\tthe  dispute
\nthere was no demand from any region for the slab system. The
\nTribunal admits\t that the  slab system had been in vogue for
\n18 years  and that  it had  worked  satisfactorily  and\t had
\nbecome part  of the  service conditions of the monthly rated
\nworkmen. However,  the Tribunal\t observes  that\t the  system
\ncould be  revised if  it was  shown that the system had out-
\nlived its utility. The justification for this observation is
\nthat at the time the slab system was introduced no one fore-
\nsaw the spiralling rise in the cost of living index and that
\nit would work against the principle of parity and uniformity
\nand  the  danger  of  the  subordinate\tstaff  getting\tmore
\nemoluments  than   their  officers  who\t might\tbe  recently
\nemployed.  These   are\tall  assumptions  without  necessary
\nmaterials  and\t this  is  the\tsecond\terror  committed  by
\nTribunals. It  is not  uncommon\t that  even  in\t prestigious
\ninstitutions recently  employed officers get emoluments less
\nthan the  subordinate staff. On this plea, the benefits that
\nthe workmen  were enjoying till then should not be denied to
\nthem. To  say that  the system had become ‘unscientific’ and
\n‘improper’ because the workmen were getting fantastic amount
\nof dearness  allowance was again without necessary material.
\nThe Tribunal
\n497<\/span>
\nthen proceeded\tto say\tthat change  in the  slab system was
\nnecessary in  the “larger  interest of the country”, “in the
\ninterest of social justice”, “in the interest of justice and
\nfair play”,  “to avoid industrial unrest”, “general interest
\nof the\tcompany and  in the  larger interest of the nation.”
\nThese are  empty verbiage  without any basis on the facts of
\nthe case.  The discussion  in the award that continuation of
\nthe dearness  allowance\t would\tbring  about  neutralisation
\nabove 100  per cent  is also  not  supported  by  sufficient
\nmaterials. The\tTribunal  has  devoted\tsome  discussion  in
\nsupport of  the highly\tplaced officers\t and went  to  their
\nrescue with  the plea  that they  were subject\tto  taxation
\nrendering their\t salaries modest.  We wish to state that all
\nthese statements  could have  been avoided in a matter where
\nthe Tribunal had only to consider whether the management was
\njustified in  trying to\t upset\ta  scheme  that\t had  worked
\nsatisfactorily for  a period  of 18 years. We do not propose
\nto make\t further comments  upon the  award of  the Tribunal.
\nSuffice it  to say  that the whole approach is erroneous and
\nthe conclusions\t were  arrived\tat  on\tassumptions  without
\nacceptable evidence.  The management had not produced before
\nthe Tribunal  sufficient evidence  to persuade\tit to change
\nthe existing  system. It may be that the slab system did not
\nfind favour with some other Tribunals. But that is no reason
\nwhy a  system that  had existed\t for a\tlong period  of time
\nshould be  stopped to  the detriment  of the workmen without
\ncompelling reasons.\n<\/p>\n
     Notice of\tchange was  given by  the company  to  bring
\nabout parity  or  uniformity  of  D.A.\tin  respect  of\t its
\nworkmen. The  Tribunal accepted\t this case of the company in
\npassing the  award. A  close scrutiny  of the  facts of\t the
\ncase, however,\twould indicate\tthat such  a parity  was not
\npossible and  that the\tcompany also  knew that\t parity\t was
\nimpossible of  achievement. This  is evident  from the\tfact
\nthat notice  of change\tdid not relate to all the workmen in
\nthe company.  It will  be seen\tthat the  company had  three
\nsystems for  payment of\t dearness allowance  i.e.,  dearness
\nallowance based\t on revised  textile for daily rated factory
\nworkers; dearness  allowance  without  ceiling\tfor  monthly
\nrated factory  staff and  consolidated\twages  and  dearness
\nallowance for  monthly rated  Head Office staff. The Company
\nhas not\t shown\tthat  it  had  adopted\ta  uniform  dearness
\nallowance system  for all  its workmen\teven in\t the  Bombay
\nregion. Therefore, the Tribunal’s
\n498<\/span>
\nconclusion based  on the  object of  achieving uniformity in
\ndearness allowance does not appear to be correct.\n<\/p>\n
     Mr. Pai learned counsel for the respondent-company took
\nus through  the various awards passed by different Tribunals
\nin his\tattempt to  impress  upon  us  the  fact  that\tsuch
\nTribunal  had  not  only  discouraged  the  slab  system  of
\ndearness allowance but had even condemned it.\n<\/p>\n
     In the  case of Hind Cycles Ltd., an award was given by
\nMr. M.R.  Mehar, Industrial Tribunal, Bombay, wherein it was
\nobserved as follows :\n<\/p>\n
\t  “…..The slab  system was devised when it was not
\n\t  expected that the consumer price index would shoot
\n\t  up to\t the extent that it has with the result that
\n\t  where the  slab system  is  followed\t(as  in\t the
\n\t  concerns  listed  in\tExhibit\t U-3)  the  dearness
\n\t  allowance of\tmonthly\t paid  staff  have  shot  up
\n\t  completely out  of proportion\t to basic wages with
\n\t  the result  that in  industries and occupations in
\n\t  which that  system is\t not followed but some other
\n\t  system is  followed the  dearness allowances, even
\n\t  though linked\t with the index, are much lower than
\n\t  the dearness\tallowance in  the concerns listed in
\n\t  Exhibit U-3…………”<\/p><\/blockquote>\n
     In the  case of Shaw Wallace & Co. Ltd., the Industrial
\nTribunal, presided  over by  Mr.  M.R.\tMehar,\tobserved  as
\nfollows :\n<\/p>\n
\t  “…….I have  made\treference  to  the  dearness
\n\t  allowance  in\t  Banks,  Mill\t companies  and\t  in
\n\t  Government offices  not because these are concerns
\n\t  comparable with Hind Cycle but to show the varying
\n\t  systems of  dearness allowance  and to  illustrate
\n\t  how  the   total  emoluments\t of   employees\t  in
\n\t  industrial employments  in which  the slab  system
\n\t  referred to  above prevails  have shot up so as to
\n\t  be  completely   out\tof   proportion\t with  those
\n\t  employees doing  similar work\t in  employments  in
\n\t  which there  is either fixed dearness allowance or
\n\t  the dearness\tallowance  though  linked  with\t the
\n\t  index, is not on
\n499<\/span>
\n\t  the slab  system.  Thus,  by\tthe  slab  system  a
\n\t  certain class\t of fortunate  employees  have\tbeen
\n\t  absolutely  protected\t against  rise\tin  cost  of
\n\t  living and  have not to bear hardships which other
\n\t  larger sections  of employees\t have to  suffer  on
\n\t  account of inflation….”\n<\/p><\/blockquote>\n
The same  Tribunal has this to say in the case of the Wadala
\nfactory, with which we are concerned, in its award dated 6th
\nDecember, 1965 :\n<\/p>\n
\t  “This dispute\t concerns  only\t the  monthly  rated
\n\t  staff of the factory. The demands concerning daily
\n\t  rated\t staff\t is  pending   before  a   Board  of
\n\t  Conciliation………. I  have therefore  to\tmake
\n\t  the award having in mind the total emoluments i.e.
\n\t  wage scales  and dearness  allowance prevailing in
\n\t  factories of\tthis size in the region belonging to
\n\t  other\t prosperous   concerns\tin  the\t engineering
\n\t  industry.\n<\/p><\/blockquote>\n
\t  In  considering  the\tdemands\t for  improved\twage
\n\t  scales the  total emoluments\thave to\t be borne in
\n\t  mind. While  the daily rated staff get the textile
\n\t  rate of dearness allowance the monthly rated staff
\n\t  get  dearness\t allowance  according  to  the\tslab
\n\t  system at  the same  rate as\tfor the Head Office,
\n\t  and\twhich\t dearness    allowance\t  is\tvery
\n\t  satisfactory……….”\n<\/p><\/blockquote>\n
The  Tribunal\tdid  not  interfere  with  the\tslab  system
\nprevalent in the Company.\n<\/p>\n
     In the case of Central Tin Works, a demand was made for
\nthe intorduction  of the  slab system.\tBut  the  Industrial
\nTribunal, Bombay,  presided over  by K.R.  Pawar, raised the
\nrate of\t dearness allowance  to 100  per cent  of the cotton
\ntextile rate.\n<\/p>\n
     In the case of Voltas Limited, in an award given on the
\n30th September,\t 1965, the Industrial Tribunal presided over
\nby  Mr.\t  V.A.\tNaik  raised  ceiling  of  maximum  dearness
\nallowance from\tRs. 400 to Rs. 450. Fixation of the ceiling,
\naccording to  Mr. Pai, is to contain the rigours of the slab
\nsystem.\n<\/p>\n
500<\/span><\/p>\n
     In Forbes\tForbes Compbell\t & Co.\tLtd., an  award\t was
\npassed by  the Industrial Tribunal presided over by Mr. V.A.
\nNaik on\t 23-12-1969, on\t the claim  for raising the dearness
\nallowance declining the demand.\n<\/p>\n
     Mr. R.D. Tulpule, Industrial Tribunal Bombay, passed an
\naward in  the case  of Polychem\t Ltd., on 9th June, 1970. In
\nthis case,  the Tribunal  noticed the  criticism of the slab
\nsystem of  dearness allowance  and sought  to rectify  it by
\ngranting 110  per  cent\t of  the  revised  textile  dearness
\nallowance along\t with fixed  ad-hoc  payment  tapering\twith
\nincrease of the slab of the salary.\n<\/p>\n
     Considerable  stress   was\t made  by  Mr.\tPai  on\t the
\nfollowing observation  of the Tribunal at page 246 of Volume
\nVII paper book :\n<\/p>\n
\t  “I have  not come across a case where slab rate of
\n\t  dearness allowance  was introduced  for the  first
\n\t  time.”\n<\/p><\/blockquote>\n
The answer  to this  observation is  that in the case of the
\nCompany with  which we\tare concerned  it was introduced for
\nthe first  time in  1958. We may also state that we have not
\ncome  across   any  award   wherein  the  slab\tsystem\tonce
\nintroduced was abolished except in one case.\n<\/p>\n
     In the  case of  Mazagaon Docks, an award was passed by
\nthe Industrial\tTribunal presided over by Shri S.A. Patel on
\n13th December,\t1984, substituting  the existing  scheme  of
\ndearness allowance  based on  the slab\tsystem by  a revised
\ntextile scale of dearness allowance. This was done following
\nthe decision  of this Court in Killick Nixon Ltd. v. Killick
\n& Allied  Companies Employees Union,<\/a> [1975] Supp. S.C.R. 453
\nrendered  on   May  2,\t1975.  It  can\tbe  argued,  perhaps
\njustifiably, that  in this  case  this\tCourt  introduced  a
\nceiling on  dearness  allowance\t in  place  of\tslab  system
\navailable in  the Mazagaon  Docks. This decision was pressed
\ninto service in support of the submission that the situation
\nobtaining in  the company  with which  we are dealing is the
\nsame as\t in the\t above case  and to  contend that  the\tslab
\nsystem should  yield place to at least a ceiling on dearness
\nallowance.\n<\/p>\n
501<\/span><\/p>\n
     We have  no quarrel  with the  conclusion arrived at in
\nthe above  case on  the facts  of that\tcase.  However,\t the
\nconclusion arrived  at in that decision cannot be applied in
\na general  manner in all cases. In that case, the employer’s
\ngrievance was  this: The  post of  junior  executives  is  a
\npromotional post  for supervisors.  Still  the\tformer\twere
\ndrawing less  emoluments than  the latter.  This is  because
\nthere was  no ceiling  on dearness  allowance in  respect of
\nworkmen and  supervisors. The  employer produced  a chart in
\nsupport of  his case and contended that this would result in
\nindiscipline and  unrest in  this industry.  It was  in this
\ncontext\t that\tthis  Court  laid  down\t fourteen  different
\naspects, not  exhaustive in  their scope,  which had  to  be
\ntaken  into  account  before  tinkering\t with  the  dearness
\nallowance. The\tMazagaon Docks\tcase has  taken support from
\nKillick Nixon  Ltd.  case  without  sufficient\tmaterial  to
\nsustain its  conclusion that slab system should be abolished
\nto avoid  huge distortion  of  wage  differences  among\t the
\npersons employed  in that  concern. A close study of Killick
\nNixon Ltd.  case will  bear out\t that this Court did not lay
\ndown that  in all  cases slab  system of  dearness allowance
\nshould be  abolished or\t done away  with to the detriment of
\nthe workers.  All that this Court held in that case was that
\nthe employer having made out a case for putting a ceiling on
\ndearness allowance,  it was  for the  Tribunal to  decide at
\nwhat particular amount there should be a ceiling on dearness
\nallowance. An  attempt was made by the employer in that case
\nto press  into service the view of the National Commissioner
\nof Labour  to ascertain\t the minimum  wage in the Company at
\nwhich a\t worker would require complete neutralisation of the
\ncost of\t living and  then find\tthe amount  necessary  as  a
\nprotection against  his real wages. This was not accepted by
\nthis Court. The Court observed :\n<\/p>\n
\t  “….We do  not wish\tto lay down as an invariable
\n\t  rule that  in all cases there should be ceiling on
\n\t  D.A. Whenever\t a case\t of this  nature  comes\t for
\n\t  industrial  adjudication,  it\t will  always  be  a
\n\t  delicate task for the Tribunal to strike a balance
\n\t  keeping in view the above principles, weightage of
\n\t  each one  of which  being  variable  according  to
\n\t  conditions obtaining.\t Whether or not there should
\n\t  be a ceiling on dearness allowance in a given case
\n\t  must depend on the facts and circumstances of that
\n502<\/span>
\n\t  case. There  can be  no inexorable  rule  in\tthat
\n\t  respect. We have formulated the various principles
\n\t  which must  be taken\tinto account by the Tribunal
\n\t  in  determining   this  question,   but  the\tmost
\n\t  dominant of  these must  always be  that of social
\n\t  justice, for\tthat is\t the  ideal  which  we\thave
\n\t  resolved   to\t  achieve   when   we\tframed\t our
\n\t  Constitution………”<\/p><\/blockquote>\n
     Thus, the\tratio of  that case  cannot be\textended  to
\nevery case to interfere with the existing D.A. Scheme, which
\nis beneficial to the workmen.\n<\/p>\n
     Mr. P.S. Mavalenkar, Industrial Tribunal, Bombay, in an
\naward dated  30-11-1976, imposed a ceiling of Rs. 700 on the
\nslab system of dearness allowance.\n<\/p>\n
     We thought\t it necessary to refer to the various awards
\nread by\t Mr. Pai  only for the completeness of the Judgment.
\nIt has\tto be  borne in\t mind that  in most  of these cases,
\nawards were  passed at\tthe instance  of the  employees when
\ndemands were made for raising the dearness allowance paid to
\nthem. Here,  we have  the case of the employer trying to get
\nover  a\t system\t of  dearness  allowance  which\t had  worked
\nsmoothly for 18 years, on the specious plea that at the time
\nthe  slab   system  was\t  introduced,  it  was\tnot  in\t the
\nexpectation of\tanyone that  the cost  of price\t index would
\nspiral up  so much  as to make it impossible for the Company
\nto  pay\t  according  to\t this  scheme.\tFrom  the  materials
\navailable we do not find that this plea can be accepted. The
\nrecords produced  show that  despite this system of dearness
\nallowance the  Company has  been making profits and has been
\nimproving its position year by year.\n<\/p>\n
     At page 103 of Volume I paper book, the appellants have
\nproduced a  table showing  dearness allowance  paid by seven
\ncompanies including  the  respondent  company  at  the\tslab
\nsystem to  show that  other companies  have been paying more
\ndearness allowance  to their  workmen  than  the  respondent
\ncompany with  inconsequential  differences  in\tcertain\t pay
\nscales. They have also given a comparative statement showing
\nhow the increase in total wages including dearness allowance
\nas per\tslab system,  for pay scale of Rs. 100 to Rs. 500 is
\nless than  the percentage  of  increase\t in  consumer  price
\nindex. The percentage of increase in consumer price index of
\n2642 over CPI 320 in
\n503<\/span>
\n1958 is\t 826 while  the percentage  of increase in wages for
\nthe same CPI is only 806.\n<\/p>\n
     In reply  to the Company’s case of capacity to pay, the
\nappellants have produced at page 101, Volume V paper book, a
\ntable showing  the net\tprofit and  the gross  profit of the
\nCompany from 1979 to 1984. The net profit has increased from
\na sum  of Rs.  19.65 lakhs  in 1978  to a  sum of Rs. 176.38
\nlakhs in  1984 and the gorss profit from Rs. 115.60 lakhs to
\nRs. 439.11  lakhs, after  paying the slab system of dearness
\nallowance to the appellants. They have also produced a table
\nshowing the  financial position of the Company from the year
\n1979 to 1984. Sales have increased from Rs. 1221.56 lakhs in
\nthe year  1979 to Rs. 2193.94 lakhs in the year 1984 and the
\ndividend on equity capital from 12.80 per cent in 1979 to 18
\nper cent in 1984.\n<\/p>\n
     We do  not think  it necessary  to deal at length about
\nthe evolution  of the concept of dearness allowance. Suffice
\nit to  say that\t this Court has, often times, emphasised the
\nneed for  a living  wage to  workmen instead of a subsisting
\nwage. It  is indeed  a matter  of concern  and mortification
\nthat even today the aspirations of a living wage for workmen
\nremain a  mirage and  a distant\t dream. Nothing\t short of  a
\nliving wage  can be  a fair  wage. It should be the combined
\neffort of  all concerned  including the\t Courts to extend to
\nworkmen a  helping hand so that they get a living wage which
\nwould keep  them to  some extent at least free from want. It
\nis against  this background  that a  claim by  employers  to
\nchange\tthe  conditions\t of  service  of  workmen  to  their
\ndetriment has  to be  considered  and  it  is  against\tthis
\nbackground that\t we have considered the award review. We are
\nnot satisfied  that a  case has\t been made  out on the facts
\navailable, for a change.\n<\/p>\n
     The question  is often  asked as to whether it would be
\nadvisable for  Tribunals  and  Courts  to  revise  the\twage
\nstructure of  workmen to  their\t prejudice  when  a  dispute
\narises. Normally  the  answer  would  be  in  the  negative.
\nTribunals and  Courts can  take judicial notice of one fact;
\nand  that   is\tthat   the  wages   of\tworkmen,  except  in
\nexceptionally rare  cases, fall\t within the category of mere
\n“subsisting wages”.  That being\t so, it would be inadvisable
\nto tinker  with the  wage structure  of workmen except under
\ncompelling circumstances. Employers have
\n504<\/span>
\nseldom displayed a cooperative attitude where wage structure
\nof workmen are devised. They have never showed a willingness
\nfor the\t involvement of the labour with the capital so as to
\nengender a  participative labour  capital relationship. This
\nis a  reality that  Tribunals and Courts have to reckon with
\nthat being so, Courts and Tribunals have necessarily to keep
\ntheir hands  off from  upsetting a  wage structure  that has
\nsatisfactorily worked  for a  long time.  The sweat  of\t the
\nlabour is never reflected in any balance sheet, although the
\nlatent force behind every successful industry is this sweat.
\nWith their present wage structure, the labour just exist. No
\none should  try to  deny  them\teven  this  bare  source  of
\nexistence.\n<\/p>\n
     In re-inforcement\tof our\tconclusion, we will refer to
\nthe following  passage in  the case of Crown Aluminium Works
\nv. Their Workmen,<\/a> [1958] S.C.R. 65] :\n<\/p>\n
\t  “The question\t posed before us by Mr. Sen is : Can
\n\t  the wage  structure fixed  in a  given industry be
\n\t  never revised\t to the\t prejudice of  its workmen ?
\n\t  Considered as\t a general  question in the abstract
\n\t  it must  be answered\tin favour  of Mr. Sen. We do
\n\t  not think  it would  be correct  to say that in no
\n\t  conceivable circumstances  can the  wage structure
\n\t  be revised  to the  prejudice of  workmen. When we
\n\t  make this  observation,  we  must  add  that\teven
\n\t  theoretically no  wage structure  can or should be
\n\t  revised  to\tthe  prejudice\tof  workmen  if\t the
\n\t  structure in question falls in the category of the
\n\t  bare subsistence  or the minimum wage. If the wage
\n\t  structure in\tquestion falls in a higher category,
\n\t  then it would be open to the employer to claim its
\n\t  revision even\t to the\t prejudice  of\tthe  workmen
\n\t  provided a  case for\tsuch revision is made out on
\n\t  the\tmerits\t  to   the   satisfaction   of\t the
\n\t  tribunal……….It\twould\tbe  interesting\t  to
\n\t  notice in  this connection  that all the tribunals
\n\t  that have  dealt with\t the  present  dispute\thave
\n\t  consistently directed\t that existing\twages should
\n\t  not be reduced to the prejudice of the workmen. In
\n\t  other words,\tthough each  tribunal  attempted  to
\n\t  constitute  a\t wage  structure  in  the  light  of
\n\t  materials furnished  to it,  a saving\t clause\t has
\n\t  been added every time
\n505<\/span>
\n\t  protecting the  interests of\tsuch workmen as were
\n\t  drawing higher  wages before. Even so it would not
\n\t  be right  to\thold  that  there  is  a  rigid\t and
\n\t  inexorable convention that the wage structure once
\n\t  fixed by industrial tribunals can never be changed
\n\t  to the  prejudice  of\t workmen.  In  our  opinion,
\n\t  therefore, the  point raised\tby Mr.\tSen must  be
\n\t  answered in  his favour  subject to  such relevant
\n\t  considerations and  limitations as we have briefly
\n\t  indicated.”<\/p><\/blockquote>\n
     We are  not prepared  to accept  the submission made by
\nthe learned  counsel for the respondent that the slab system
\nhas not\t been approved either by Tribunals or by Courts, not
\nto say that they have been condemned. In the case of Unichem
\nLaboratories Ltd.  v. The  Workmen,<\/a> [1972] 3 S.C.R. 567 this
\nCourt has  occasion to\tconsider the  slab system  and\tthis
\nCourt gave  its seal  of approval to this system. This Court
\nafter considering  the various\tmaterials placed  before  it
\nobserved that  in  the\tBombay\tregion\tthere  were  several
\nPharmaceutical\tunits\tadopting  slab\tsystem\tof  dearness
\nallowance. We  read the\t following passage in support of our
\nconclusion that\t the slab  system did  find favour with this
\nCourt on more than one occasion :\n<\/p>\n
\t  “….When  once  such\t units\tcan  be\t taken\tinto
\n\t  account  as\tcomparable  units,  the\t pattern  of
\n\t  dearness allowance obtaining therein can very well
\n\t  be considered\t to ascertain  the system adopted by
\n\t  the industry\tas that\t will show  the trend in the
\n\t  region. As  pointed out  above at  least 11 units,
\n\t  referred to  in Ex.  DU.1 have  adopted the system
\n\t  now introduced in the case of the appellant by the
\n\t  Tribunal. Under  those  circumstances,  when\tsuch
\n\t  system is  prevailing in  the industry in the same
\n\t  region, it  cannot be\t held that  the Tribunal has
\n\t  committed  an\t error,\t in  introducing  a  similar
\n\t  pattern in  the case\tof the\tappellant. The\tslab
\n\t  system has  been approved by this Court as will be
\n\t  seen by  the decisions  in Greeves  Cotton and Co.
\n\t  and Others  v. Their\tworkmen, [1964] 5 S.C.R. 362
\n\t  and Bengal  Chemical and Pharmaceutical Works Ltd.
\n\t  v. Its  workmen, [1969]  2  S.C.R.  113.  Even  in
\n\t  Bombay that  such a  pattern of dearness allowance
\n\t  as the one introduced in the case of the
\n506<\/span>
\n\t  appellant is existing, is seen by the decisions of
\n\t  this Court in Greeves Cotton and Co. and others v.
\n\t  Their workmen and Kamini Metals and Alloys Ltd. v.
\n\t  Their workmen,  [1967] 2  S.C.R. 463. No doubt the
\n\t  industries therein  were not pharmaceutical units.
\n\t  But that  such a system exists in Bombay region is
\n\t  clear from the above decisions.”\n<\/p><\/blockquote>\n
This Court  then noticed that in a number of awards rendered
\nduring the  year 1965  to 1968\tthe slab  system of dearness
\nallowance was adopted and wound up by saying :\n<\/p>\n
\t  “These facts\tclearly\t show  that  the  scheme  of
\n\t  dearness allowance provided in the award before us
\n\t  in respect of the appellants is not anything new.”\n<\/p><\/blockquote>\n
\t\t\t\t\t\t    (at page\n<\/p><\/blockquote>\n
604)
\nThe only  grievance that  the respondent’s  counsel can have
\nagainst these  observations is that the Court in those cases
\nwere  considering   pharmaceutical  units   which  were\t not
\ncomparable with\t the unit  in question. We do not agree that
\nthis distinction  can be  pressed into\tservice to  deny the
\nworkmen the  slab system existing in this unit. The Tribunal
\nhas found  this unit  to be an engineering unit which is not
\nin a  far less\tdisadvantageous position than pharmaceutical
\nunits.<\/p><\/blockquote>\n
     The learned  Counsel for  the respondent  made a strong
\nplea for  substitution of  the exising\tsystem\tof  dearness
\nallowance with ceiling on the quantum of dearness allowance.
\nWe have\t already indicated that in the absence of compelling
\nmaterials a  system that gives benefit to the workmen cannot
\nlightly be interfered with to their detriment. The theory of
\nceiling on  the quantum\t of  dearness  allowance  cannot  be
\naccepted since\tunder the  prevailing conditions there is no
\ncontrol over the prices of essential commodities and as such
\na ceiling  would not  give sufficient cushion when prices of
\nessential commodities continuously rise.\n<\/p>\n
     Mr. Pai  apprehended the  possibility of similar demand
\nby the\tworkers in  other factories  which would  render the
\nworking of the factory itself difficult and sometimes compel
\nit to  close them  down. He  has  made\tavailable  to  us  a
\nstatement
\n507<\/span>
\nshowing the  amounts that  the company will have to dole out
\nif the\tpresent system\tis to  continue. In  respect  of  80
\nmonthly rated  workmen the  difference payable\twill be\t Rs.
\n75,000 per  month, which works out to Rs. 9,00,000 per year.
\nIf this\t slab system is to be introduced for 4000 employees,
\nthe liability  will be\tabout Rs. 4,50,00,000. Though at the
\nfirst flush  one would be tempted to agree with Mr. Pai, the
\ntemptation will\t disappear when\t we inform  ourselves of the
\nfact that  in a catena of decisions this Court has laid down
\nthe industry-cum-region\t basis as the acceptable basis while
\nworking out  dearness allowance.  This is the usual alarmist
\ncry  of\t  the  employers.   Uniformity\tof   wage  structure
\nthroughout the country if accepted will be giving a go-by to
\nthe well  settled  principle  of  industry-cum-region.\tThis
\nCourt has  time and  again laid down the industry-cum-region
\nprinciple whenever the question of wage structure arose.\n<\/p>\n
     As an  answer to  this plea  of the respondent, we will
\nonly read  the following  passage from\tthe Judgment  in the
\ncase of\t Workmen v.  Indian Oxygen  Ltd.,<\/a> to which one of us
\nwas a  party. Desai  J. while  repelling the plea that in an
\nindustrial undertaking which has an all India operation, the
\nunit as a whole should be considered, observed thus :\n<\/p>\n
\t  “14. On  behalf of  the Karmachari  Union, it\t was
\n\t  contended that  in devising  a dearness  allowance
\n\t  formula, the\tregion-cum-industry principle should
\n\t  ordinarily be\t accepted. As  pointed\tout  earlier
\n\t  dearness allowance  generally has a local flavour.
\n\t  A man\t is exposed  to the  vagaries of  the market
\n\t  where he  resides and works, even though he may be
\n\t  an  employee\t of  a\tnational,  multinational  or
\n\t  transnational industrial  empire. The\t workmen  is
\n\t  concerned with  the vagaries\tof price fluctuation
\n\t  in the area in which he resides and works for gain
\n\t  and to which he is exposed. Therefore, the region-
\n\t  cum-industry\tprinciple   must  inform  industrial
\n\t  adjudication in  the matter of dearness allowance.
\n\t  In  Woolcombers   of\tIndia  Ltd.  v.\t Woolcombers
\n\t  Workers Union,<\/a>  [1974] 1  S.C.R. 504,\t this  Court
\n\t  following its\t earlier decision  in Greeves Cotton
\n\t  and Co.  v. Workmen,<\/a> [1964] 5 S.C.R. 362 held that
\n\t  in devising basic wages and dearness
\n508<\/span>
\n\t  allowance   structure,   industrial\tadjudication
\n\t  sometimes  leans  on\tthe  industry  part  of\t the
\n\t  industry-cum-region formula and at other times, on
\n\t  the region  part of  the formula  as the situation
\n\t  demands.  This   well\t recognised   principle\t  of
\n\t  industrial adjudication  cannot be given a goby on
\n\t  the specious plea that the workmen are employed by
\n\t  an industrial\t undertaking which  has an all India
\n\t  operation.  In   this\t case,\t the  Tribunal\t has
\n\t  overlooked this  important principle of industrial
\n\t  adjudication………..”<\/p><\/blockquote>\n
     We have  extracted\t the  above  passage  to  repel\t the
\nargument that  if the  status quo  is allowed to continue in
\nthis case,  there will\tbe demands  from other\tsectors\t and
\nother factories.  This is  only a  theoretical\tapprehension
\nwith which  we are  not concerned. We have repeatedly stated
\nthat in\t this case reference to adjudication was made not at
\nthe instance  of the  workmen, but  at the  instance of\t the
\nemployer who  wanted to bring about a change in the existing
\nsystem which had satisfactorily worked for 18 years, without
\nproducing compelling materials, in support of their claim.\n<\/p>\n
     On a  careful consideration  of the  various  questions
\ninvolved in  this case, we are of the view that the Tribunal
\nerred grossly in its approach to the questions raised and in
\nanswering the  reference in  favour  of\t the  employer.\t We,
\ntherefore, allow  the appeal, set aside the award and direct
\nthat  the   existing  slab  system  will  continue  for\t the
\nappellant unit.\t The interim  order passed  on 14.3.1981  is
\nhereby vacated.\t The respondent\t is directed to pay the cost
\nof the appellant, quantified at Rs. 5,000.\n<\/p>\n
     The Construction  Employees Union\tof  the\t respondent-
\ncompany intervened  in the  case  and  filed  their  written
\narguments  as\tdirected  by  this  Court.  In\tthe  written
\narguments, the said Union supported the appellant’s case.\n<\/p>\n
S.R.\t\t\t\t\t     Appeal allowed.\n509<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Monthly-Rated Workmen At The … vs Indian Hume Pipe Company Ltd., … on 11 April, 1986 Equivalent citations: 1986 AIR 1794, 1986 SCR (2) 484 Author: V Khalid Bench: Khalid, V. (J) PETITIONER: MONTHLY-RATED WORKMEN AT THE WADALAFACTORY OF THE INDIAN HUM Vs. RESPONDENT: INDIAN HUME PIPE COMPANY LTD., BOMBAY DATE […]<\/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-126215","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nMonthly-Rated Workmen At The ... vs Indian Hume Pipe Company Ltd., ... on 11 April, 1986 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/monthly-rated-workmen-at-the-vs-indian-hume-pipe-company-ltd-on-11-april-1986\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Monthly-Rated Workmen At The ... vs Indian Hume Pipe Company Ltd., ... on 11 April, 1986 - 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