{"id":54059,"date":"1961-02-01T00:00:00","date_gmt":"1961-01-31T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-burmah-shell-refineries-vs-their-workmen-on-1-february-1961"},"modified":"2016-07-08T10:38:53","modified_gmt":"2016-07-08T05:08:53","slug":"the-burmah-shell-refineries-vs-their-workmen-on-1-february-1961","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-burmah-shell-refineries-vs-their-workmen-on-1-february-1961","title":{"rendered":"The Burmah-Shell Refineries … vs Their Workmen on 1 February, 1961"},"content":{"rendered":"
Supreme Court of India<\/div>\n
The Burmah-Shell Refineries … vs Their Workmen on 1 February, 1961<\/div>\n
Equivalent citations: 1961 AIR 917, \t\t 1961 SCR (3) 669<\/div>\n
Author: K D Gupta<\/div>\n
Bench: Gupta, K.C. Das<\/div>\n
           PETITIONER:\nTHE BURMAH-SHELL REFINERIES LIMITED\n\n\tVs.\n\nRESPONDENT:\nTHEIR WORKMEN.\n\nDATE OF JUDGMENT:\n01\/02\/1961\n\nBENCH:\nGUPTA, K.C. DAS\nBENCH:\nGUPTA, K.C. DAS\nGAJENDRAGADKAR, P.B.\nWANCHOO, K.N.\n\nCITATION:\n 1961 AIR  917\t\t  1961 SCR  (3) 669\n\n\nACT:\nIndustrial    Dispute--Payment\t of   bonus   to    clerical\nstaff--Practice Prevailing in oil companies--If must be Paid\nlower rate than tabour staff.\n\n\n\nHEADNOTE:\nPayment of bonus being based on the contribution of  workmen\nto the profits of the company, that contribution, it is well\nsettled,  has to be taken into consideration as a whole\t and\nit is not relevant to enquire which class or section of\t the\nworkmen contributed how much to the profits.\nBurn and Co., Calcutta v. Their Employees<\/a> [1956] S.C.R.\t 781\nand Baroda Borough Municipality v. Its Workmen<\/a> [1957] S.C.R.\n33, referred to.\nLooked\tat  from that stand-point, it is not  fair,  in\t the\nabsence\t  of  any  overriding  consideration,  to   make   a\ndistinction  as\t to the rate of bonus payable  to  different\nclasses of workmen such as clerks and operatives, for it  is\nordinarily impossible to say which class contributed more to\nthe prosperity of the industry than another.\nNor  can  it  be laid down as an inflexible  rule  that\t the\nclerical  and  the labour staff must always be paid  at\t the\nsame   rate.   The  Industrial\tTribunals  must\t have\twide\ndiscretion  in\tthe  matter,  which  this  Court  would\t  be\nreluctant to interfere with unless arbitrarily exercised.\nConsequently, where the Industrial Tribunal, on a full\tcon-\nsideration  of the difference in the wage scales  of  labour\nand the clerical staff, came to the conclusion that it would\nbe  improper  to award lower rate of bonus to  the  clerical\nstaff  who  belonged to the middle class and  suffered\tmore\nthan the labour staff from the rise of price, and there\t was\nnothing\t to show that this was not so, the decision  of\t the\nTribunal was reasonable and must be upheld.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 250\/1959.
\nAppeal\tby special leave from the award dated May 18,  1958,
\nof  the Industrial Tribunal, Bombay, in Reference  (I.\t T.)
\nNo. 106 of 1955.\n<\/p>\n
M.   C.\t  Setalvad,  Attorney-General  for  India,   S.\t  D.
\nVimadalal and 1. N. Shroff, for the appellants.
\nJanardan Sharma, for respondent No. 1.\n<\/p>\n
1961.\tFebruary 1. The Judgment of the Court was  delivered
\nby
\n670<\/span>
\nDAS GUPTA, J.-This appeal by special leave arises out of  an
\nindustrial dispute. between the appellant company, and their
\nclerical  staff on the question of bonus for the year  1956.
\nThe  demand  of the workmen, was for bonus equivalent  to  8
\nmonths’\t total earnings of the year.  The  company  resisted
\nthis demand mainly on the ground that there was in existence
\nan  agreement between the company and its labour  employees-
\nwhereby\t bonus for the year 1956 had been settled  at  4-1\/2
\nmonths’ basic wages, that the general practice in awards  in
\nthe  matter of bonus had in the past been to award or  grant
\nlesser\tamounts\t to clerical employees than to\tlabour,\t and
\nthat  in  any  case,, to grant the same\t rate  of  bonus  to
\nclerical  employees  and  labour employees  would  be  ”  to
\nencourage or to invite strife and discontent.” The  Tribunal
\nheld  that such an agreement as regards bonus for  1956\t had
\nbeen  voluntarily entered into on behalf of the workers\t and
\nwas  beneficial to them; and was of opinion that. the  bonus
\nto the clerical staff ought to be on the same scale.  On the
\none  hand, it rejected the clerical staff’s claim for  bonus
\nat a higher rate than what the workmen were entitled to,  as
\nthis ” would lead to industrial discontent and strife “, and
\non  the\t other held that there was no reason  to  grant\t the
\nclerical  staff\t bonus\tat a  lower  rate.   Accordingly  it
\nawarded bonus at the rate of 9\/24ths of the basic wages,  to
\nthe clerical staff, for the year ending December 31, 1956.
\nTwo  contentions were raised in appeal.\t The first  is\tthat
\nthe Tribunal erred in awarding bonus without having recorded
\na conclusion as regards the existence and extent of the\t gap
\nbetween\t the actual wages received by these workmen and\t the
\nliving\twage.  The second contention urged on behalf of\t the
\nappellant  is  that the Tribunal erred in  granting  to\t the
\nclerical staff bonus at the same rate as was payable to\t the
\nlabour staff, on the basis of the agreement, and should have
\ngranted bonus to the clerical staff, at a lower rate.
\nThe  appellant cannot however be allowed to urge  the  first
\ncontention in this appeal because such a contention does not
\nappear to have been seriously
\n671<\/span>
\nraised\tbefore the Tribunal.  It is true that in  the  first
\npart  of the written statement filed before the Tribunal  on
\nbehalf\tof  the\t company a statement was  made\tthat  ”\t the
\ncompany,  craves  leave\t to  refer to and  rely\t on,  as  if
\nincorporated herein, its written statement filed before this
\nHon’ble Tribunal in Ref. (I.T.) 279 of 1957, and repeats and
\nadopts\tall the submissions and averments made therein”\t and
\nthat in the written statement filed therein a question\tthat
\nin  view  of  the high wage,% paid by  the  company  no\t gap
\nexisted\t between  the actual wage and the living  wage,\t was
\ntaken.\t Not only was no independent statement made  in\t the
\nseparate  written statement which was filed in\tthe  present
\nreference, i.e., Ref No. (I.T.) 106 of 1958 on this question
\nbut  we\t find no reference at all in the award made  by\t the
\nTribunal  which\t heard both the references together  to\t any
\ncontention of this nature.  No ground that the Tribunal\t had
\ngranted bonus without coming to a conclusion as regards\t the
\nexistence  and\textent\tof a gap  between  the\tactual\twage
\nreceived by the workmen and the living wage was taken in the
\npetition for special leave to appeal.  Even in the statement
\nof  case filed on behalf of the appellant no  such  question
\nhad been raised.  It is not therefore open to the  appellant
\nto urge such a contention now.\n<\/p>\n
In support of the other contention that the Tribunal was  in
\nerror  in granting to the clerical staff bonus at  the\tsame
\nrate as was payable to the labour staff, on the basis of the
\nagreement,  and that bonus should have been granted  to\t the
\nclerical  staff at a lower rate, it is urged that  for\tmany
\nyears  now, the practice in the petroleum industry has\tbeen
\nto make a distinction between the clerical employees and the
\noperatives, giving a lower rate of bonus to the former, than
\nwhat  is  given\t to the latter.\t It is\tunnecessary  in\t the
\npresent\t case,\tto consider, whether, if  the  premise\tthat
\nthere  had for many years been such a practice of  paying  a
\nlesser\trate of bonus to clerical staff than to\t the  labour
\nstaff,\tthat itself would preclude  industrial\tadjudicators
\nfrom awarding bonus to both classes of employees at the same
\nrate.\tFor,  we find that the above premise  has  not\tbeen
\nestablished, While it is true that in some
\n672<\/span>
\nyears,\teither\tby  award  of  Industrial  Tribunal  or\t  by
\nagreement,  clerical  staff of petroleum  concerns  has\t got
\nbonus  at  a lower rate, than the labour  employees,  it  is
\nequally true that in some years at least, clerical staff and
\noperatives have been given bonus at the same rate.  Thus for
\nthe  year 1951, we find that in disputes between  the  three
\noil companies-The Burmah Shell, the Caltex and the  Standard
\nVacuum,\t and  their employees in their Calcutta\t office\t the
\nLabour\tAppellate Tribunal discussed the matter\t in  Burmah-
\nShell Oil Co. Ltd. v. Their Workmen<\/a> (1) thus :-\n<\/p>\n
\t      ” In the matter for payment of bonus for 1950,
\n\t      both the clerical staff and the working people
\n\t      got  bonus  at the rate of  3  months’  wages,
\n\t      though  there  was  an  observation  that\t the
\n\t      working class were on calculation entitled  to
\n\t      4\t months.   The effect-, was,  however,\tthat
\n\t      both  the\t groups got bonus at the rate  of  3
\n\t      months’  basic wages.  During the pendency  of
\n\t      the  Tribunal proceedings, all  the  companies
\n\t      made agreements with the Union of the  workers
\n\t      that bonus would be granted on the basis of 3-
\n\t      1\/2 months’ wages for the year 1951.  We\tfeel
\n\t      that there; would be a serious repercussion if
\n\t      we  allow\t to the clerical staff\tanything  in
\n\t      excess of that amount.  On the other hand,  as
\n\t      the  effect of the previous decision had\tbeen
\n\t      that  both groups got equally, paying  to\t the
\n\t      clerks  less than that what has been  paid  to
\n\t      the  working class would give rise to  a\treal
\n\t      discontent.\n<\/p><\/blockquote>\n
”  We find also that when the same  question, viz.,  whether
\nthe same rate of bonus should be paid to clerical staff\t and
\noperatives,  was  raised  before  the  Industrial  Tribunal,
\nErnakulam,  in\ta dispute between the  Burmah-Shell  Co.  v.
\nTheir Workmen<\/a> (2), learned counsel on behalf of the  company
\nconceded  that\the would not press the point  for  making  a
\ndistinction  in\t the matter of payment of  bonus.   We\tfind
\ntherefore  that there is no basis for the  assumption’\tthat
\n‘the uniform or nearly uniform practice in the oil companies
\nhas  been  to pay bonus at a lesser rate to  clerical  staff
\nthan to operatives.  There is no substance. therefore in the
\nargument that the award of bonus at
\n(1) (1955) L.A.C. 787, 794.\n<\/p>\n
(2) (1959) (1) L.L.J. 198,
\n673<\/span>
\n9\/24ths of basic wages, to the clerical staff, is likely  to
\ncause  discontent among the labour staff, which has  entered
\ninto an agreement to receive bonus at the same rate.
\nThe second argument is that as the pay scale of the clerical
\nstaff is higher than what the labour staff receive as wages,
\nthe gap between the living wage and wage actually  received,
\nis less for the clerical staff, and so, it would be wrong to
\npay  bonus, which is primarily intended to bridge this\tgap,
\nat  the\t same rate to these two classes\t of  workmen.\tThis
\nargument overlooks the important principle that the  payment
\nof  bonus is based on the fact of contribution by labour  to
\nthe profits of the industry, and that it has been held\tmore
\nthan  once  by the court that the contribution to  be  taken
\ninto  consideration is the contribution made by the  workmen
\ntaken together as a class, and that it would not be relevant
\nto  enquire which section of the workmen has contributed  to
\nwhat  share  of profits.  It was observed by this  Court  in
\nBurn  &\t Co., Calcutta v. Their Employees<\/a>  (1),\t in  setting
\naside  an award of the Appellate Tribunal of  an  additional
\none month’s basic wages:-\n<\/p>\n
\t      ”\t The entire profits of the company  are\t the
\n\t      result  of the labour of all the\tworkmen\t and
\n\t      employees in all its units.  To grant a  bonus
\n\t      to a section of them on the basis of the total
\n\t      profits of the company will give them a  share
\n\t      in   profits   to\t  which\t  they\t have\t not
\n\t      contributed……\t  If   the  order   of\t the
\n\t      Appellate\t Tribunal is to be given effect\t to,
\n\t      some of the employees of the company would get
\n\t      a\t bonus while, others not and as observed  in
\n\t      Karam  Chand  Thaper & Bros.’ Workmen  v.\t The
\n\t      Company<\/a>  (1953 L.A.C. 152), that must lead  to
\n\t      disaffection among the workers, and to further
\n\t      industrial disputes.  ”\n<\/p><\/blockquote>\n
A similar view was expressed by this Court in Baroda Borough
\nMunicipality v. Its Workmen<\/a> (2).\n<\/p>\n
It is true that in the cases mentioned above, the Court\t was
\nconsidering  the  question whether one\tclass  of  employees
\ncould  be  granted  bonus, while  another  class  was  being
\ngranted none at all; and was not
\n(1) [1956] S.C.R. 781. 795.\n<\/p>\n
(2) [1957] S.C.R. 33.\n<\/p>\n
674<\/span><\/p>\n
considering the question of propriety of different rates  of
\nbonus being paid to different classes.\tBut the basis of the
\ndecision  that all the workmen, taken as a whole  contribute
\nto  the profits, is relevant also for the  consideration  of
\nthe  question whether different rates of bonus\tbetween\t two
\ndifferent  classes of workmen are fair; and it is  necessary
\nto  remember that it is ordinarily not possible to say\tthat
\none  class  or workmen, say clerks, contribute more  to\t the
\nprosperity   of\t the  industry\tthan  another\tclass\tlike
\noperatives.  In the absence of some overriding consideration
\nit  would not be fair to make a distinction in the  rate  of
\nbonus between different classes of workmen.
\nWe  do not wish however to lay down an inflexible rule\tthat
\nclerical staff and labour staff must always be paid the same
\nrate of bonus.\tIt may happen in a particular industry\tthat
\nwages of labour staff are extremely low, while the pay scale
\nof  the clerical staff is many times higher.  If a  Tribunal
\nin a case like this, being of opinion, that payment of bonus
\nat the same rate will not be fair, and may cause  discontent
\namongst\t the  workers awards bonus at a lower  rate  to\t the
\nclerical staff, than to the labour staff, there would be  no
\nreason\tfor disturbing the award.  The industrial  tribunals
\nmust  have  very wide discretion in  deciding  matters\tlike
\nthis;  and it is not for this Court to interfere with  their
\nexercise of discretion, unless it is plainly arbitrary.
\nIn  the\t present case, the Tribunal fully conscious  of\t the
\ndifference  in the wage scales of labour and clerical  staff
\nhas pointed out that the clerical staff came from the middle
\nclass  whose  standard of living is higher, and\t has  stated
\nthat this class has suffered perhaps more than the operative
\nclass from rise in prices, and has in consideration of these
\nfactors, concluded that it would be appropriate not to award
\na lower rate of bonus to them.\tNothing has been shown to us
\nto  justify any doubt about the correctness of the  premises
\nmentioned by the learned Tribunal; and the conclusion  seems
\neminenty reasonable.\n<\/p>\n
It was urged by the learned Attorney-General who appeared on
\nbehalf of the appellant company that
\n675<\/span>
\neven  though it be true that the standard of living  of\t the
\nmiddle\tclass from which the clerical staff comes is  higher
\nthan  that  of\tthe operatives the  difference\tbetween\t the
\nhigher average wage received by the clerical staff and\tthat
\nreceived by the operatives is much more than the  difference
\nin  monetary terms between the living wage of  the  clerical
\nstaff  and  that  of the operatives.   From  the  statements
\nfurnished  before us it was attempted to be shown  that\t the
\nstarting  rate\tof  remuneration of  the  middle  grade\t for
\noperatives  together with what is received in  shapes  other
\nthan  the  wages was on January 1, 1958,  Rs.  188-94  while
\nsimilar\t receipts  by  the middle grade for  clerks  is\t Rs.
\n404.45, that is, the starting remuneration of clerks  taking
\nthe  middle  grade  as the type is  113.91%  more  than\t the
\nstarting  remuneration\tfor  middle grade  for\tlabour.\t  As
\nagainst\t this it is suggested, the living wage for  clerical
\nstaff  should  be  taken only 80% more\tthan  that  for\t the
\noperatives.  We may assume without further investigation the
\ncorrectness  of\t the statement as  regards  the\t comparative
\nremuneration  received\tby middle grade\t of  operatives\t and
\nmiddle grade of clerical staff as submitted on behalf of the
\ncompany.   We find no basis however for the assumption\tthat
\nthe living wage of clerical staff is only 80% more than that
\nof  operatives.\t  It  is true that in  connection  with\t the
\ndetermination of wages a formula which appears to have\tbeen
\ninitiated  first  by Mr. Justice Rajadhyaksha  when  he\t was
\nenquiring  into\t the  cost of  living  of  the\tnon-gazetted
\nemployees   in\t the  Post  and\t Telegraph   Department\t  of
\nmultiplying  the  figures  reached  on\tthe  basis  of\t the
\nrequirements of the lower class employees by 180% has  often
\nbeen accepted by the industrial tribunals.  Assuming however
\nwithout\t deciding  that\t this coefficient of 180  %  may  be
\nproperly adopted for arriving at the fair wage\trequirements
\nof  clerical  staff  from  the\tfair  wage  requirements  of
\noperatives  it\tdoes not by any means follow that  the\tsame
\ncoefficient  can  be usefully ,applied\tin  calculating\t the
\nliving\twage of the clerical staff from the living  wage  of
\nthe  operatives.   As has been clearly pointed out  by\tthis
\nCourt in a recent
\n676<\/span>
\njudgment in C. A. No. 416 of 1958 (Standard Vacuum  Refining
\nCo.,  Ltd.  versus Its Workmen) the components of  a  living
\nwage  are largely different from those of a fair wage.\t The
\ndifference  in\tthe living wage standards of  the  class  to
\nwhich operatives generally belong and the class to which the
\nclerical staff belongs may produce much greater\t differences
\nin  the money value in the components of the requirement  of
\nliving\twage as between the two classes than the  difference
\nin the money value of the components of fair wage of the two
\nclasses.\n<\/p>\n
There  is no justification therefore for thinking  that\t the
\nliving wage of the clerical staff is only 80% more than\t the
\nliving\twage of the operatives and so ..no  conclusion\tthat
\nthe gap between the living wage and the actual wage is\tless
\nin the case of clerks than in the case of operatives can  be
\ndrawn  from  a\tconsideration  of  the\tcomparative   wage,%
\nreceived by them.\n<\/p>\n
We  find nothing that would justify us in  interfering\twith
\nthe  conclusion\t of  the Tribunal that\tthe  clerical  staff
\nshould be awarded bonus at the same rate, as the operatives.
\nThe appeal is accordingly dismissed with costs.\n<\/p>\n
\t\t\t\t     Appeal dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India The Burmah-Shell Refineries … vs Their Workmen on 1 February, 1961 Equivalent citations: 1961 AIR 917, 1961 SCR (3) 669 Author: K D Gupta Bench: Gupta, K.C. Das PETITIONER: THE BURMAH-SHELL REFINERIES LIMITED Vs. RESPONDENT: THEIR WORKMEN. DATE OF JUDGMENT: 01\/02\/1961 BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS 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-54059","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nThe Burmah-Shell Refineries ... vs Their Workmen on 1 February, 1961 - 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\/the-burmah-shell-refineries-vs-their-workmen-on-1-february-1961\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Burmah-Shell Refineries ... vs Their Workmen on 1 February, 1961 - 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