{"id":7514,"date":"1991-10-31T00:00:00","date_gmt":"1991-10-30T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/workmen-represented-by-secretary-vs-management-of-reptakos-brett-and-on-31-october-1991"},"modified":"2016-01-06T08:43:44","modified_gmt":"2016-01-06T03:13:44","slug":"workmen-represented-by-secretary-vs-management-of-reptakos-brett-and-on-31-october-1991","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/workmen-represented-by-secretary-vs-management-of-reptakos-brett-and-on-31-october-1991","title":{"rendered":"Workmen Represented By Secretary vs Management Of Reptakos Brett.And … on 31 October, 1991"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Workmen Represented By Secretary vs Management Of Reptakos Brett.And … on 31 October, 1991<\/div>\n
Equivalent citations: 1992 AIR 504, \t\t 1991 SCR Supl. (2) 129<\/div>\n
Author: K Singh<\/div>\n
Bench: Kuldip Singh (J)<\/div>\n
           PETITIONER:\nWORKMEN REPRESENTED BY SECRETARY\n\n\tVs.\n\nRESPONDENT:\nMANAGEMENT OF REPTAKOS BRETT.AND CO. LTD. AND ANR.\n\nDATE OF JUDGMENT31\/10\/1991\n\nBENCH:\nKULDIP SINGH (J)\nBENCH:\nKULDIP SINGH (J)\nMISRA, RANGNATH (CJ)\n\nCITATION:\n 1992 AIR  504\t\t  1991 SCR  Supl. (2) 129\n 1992 SCC  (1) 290\t  JT 1991 (4)\t243\n 1991 SCALE  (2)940\n\n\nACT:\nLabour law:\n    Industrial\tdispute--Minimum  wages---Determination\t  of\nDearness  Allowance  scheme--Whether can be altered  to\t the\nprejudice of workmen.\n    Industrial\tTribunal--Abolition  of\t existing   dearness\nallowance scheme--Directions to link dearness allowance with\npre-war cost of living index--Validity of.\nConstitution of India:\n    Art\t 136.' Industrial Tribunal and High Court acting  in\noblivion  of  legal position causing manifest  injustice  to\nworkmen---Supreme Court--Whether can interfere.\n\n\n\nHEADNOTE:\n    The respondent-company, in its factory set up at  Madras\n1959, introduced slab system of dearness allowance (DA) i.e.\nthe DA paid to the workmen was linked to the cost of  living\nindex as well as the basic pay. The double linked DA scheme,\nbeing  consciously  accepted  as basic\tconstituent  by\t the\ncompany and its workmen in various settlements between them,\nbecame\tbasic  feature\tof the\twagestructure  and  remained\noperative in the company for about 30 years,\n    In\tthe year 1983, a dispute arose between\tthe  company\nand  its workmen. The matter was referred to the  industrial\nTribunal. One of the issues before the Tribunal was based on\nthe demand of the Management for restructuring of the  dear-\nness allowance scheme and to frame a new scheme. The  Tribu-\nnal  abolished the existing slab system of DA  and  directed\nthe  dearness  allowance to be linked only to  the  cost  of\nliving\tindex at 33 paise per point over 100 points  at\t the\nMadras city cost of living index 1936 base.\n    Before  the High Court, both the parties agreed  not  to\npress their respective writ petitions except on the issue of\nrestructuring of\n130\nDA.  Upholding\tthe  findings of the Tribunal  on  the\tsole\nsurviving  issue, the Single Judge dismissed  the  workmen's\nwrit  petition. The intra-Court appeal filed by the  workmen\nwas also dismissed. grieved, the workmen filed the appeal by\nspecial leave to this Court.\n    It\twas  contended\ton behalf of the  workmen  that\t the\nTribunal and High Court grossly erred in taking Rs. 26 as  a\npre-war\t wage of a worker in Madras region and holding\tthat\nthe  rate of neutralization on the basis of cost  of  living\nindex  in December, 1984 was 192%; that even  assuming\tthat\nthere was over-neutralization, the existing pay structure\/DA\nscheme could not be revised to the prejudice of the  workmen\nunless their pay structure was within the concept of 'living\nwage'  and, in addition, it was proved that financially\t the\ncompany was unable to bear the burden; and that the  company\ncould  not  be\tpermitted to abolish the DA  scheme  to\t the\ndetriment of the workmen much less on the plea that the said\nscheme\twas more beneficial than the DA schemes\t adopted  by\nother industries in the region.\n    The respondent, contended that the company had proved to\nthe satisfaction of the Tribunal that financially it was not\nin a position to bear the burden of existing DA scheme; that\nits  workmen  were  in a high-wage island and  as  such\t the\nrevision  of DA scheme was justified. It was also  contended\nthat  so long as there was some basis and material to  vali-\ndate  the award, the jurisdiction under Article 136  of\t the\nConstitution stood repelled.\n    On\tthe question; whether the Management is entitled  to\nrestructure the DA scheme to the prejudice of the workmen on\nthe  ground that the existing system had resulted  in  over-\nneutralization thereby landing the workmen in the  high-wage\nisland\nAllowing the appeal of the workmen, this Court,\n    HELD: 1.1. The management can revise the wage  structure\nto  the\t prejudice  of the workmen in a case  where  due  to\nfinancial stringency it is unable to bear the burden of\t the\nexisting-wage.\tBut in an industry or the  employment  where\nthe wage structure is at the level of minimum wage, no\tsuch\nrevision  at all, is permissible-not even on the  ground  of\nfinancial stringency. [p. 142 E]\nMonthly-Rated  workmen at the Wadala factory of\t the  Indian\nHume\n131\nPipe Co. Ltd. v. Indian Hume Pipe Co. Ltd., Bombay, [1986] 2\nS.C.R. 484, relied on.\n    M\/s\t Crown\tAluminium  Works v.  Their  Workmen,<\/a>  [1958]\nS.C.R. 651 & Ahmedabad Mills Owners' Association etc. v. The\nTextiles Labour Assosication, [1966] 1 SCR 382, referred to.\n    Killick Nixon Ltd. v. Killick & Allied Companies Employ-<\/a>\nees Union, [1975] Suppl. S.C.R. 453, distinguished.\n    1.2\t The employees are entitled to the minimum  wage  at\nall  times  and\t under all circumstances.  An  employer\t who\ncannot\tpay the minimum wage has no right to  engage  labour\nand no justification to\nrun the industry. [p. 137 C]\n    1.3 It is for the management, seeking to restructure the\nDA  scheme to the disadvantage of the workmen, to  prove  to\nthe satisfaction of the tribunal that the wage-structure  in\nthe  industry concerned is well above minimum level and\t the\nmanagement  is\tfinancially not in a position  to  bear\t the\nburden of the existing wagestructure. [p. 142 F]\n    2.1 'The concept of 'minimum wage' is no longer the same\nas it was in 1936. Even 1957 is way-behind. A worker's\twage\nis no longer a contract between an employer and an employee.\nIt  has the force of collective bargaining under the  labour\nlaws.  Each category of the wage structure has to be  tested\nat  the anvil of social justice which is the  live-fibre  of\nour society today. [pp. 136 H, 137 A]\n    2.2\t The Tripartite Committee of the Indian Labour\tCon-\nference'- 1957 has formulated five norms for the fixation of\n'minimum  wage' (i) three consumption units for\t one  earner\ndisregarding  earnings of women, children and\tadolescents;\n(ii) minimum food requirement based on net intake  calories;\n(iii)  clothing\t requirement at 72 yards per  annum  for  an\naverage working family of four; (iv) house rent\t correspond-\ning  to\t minimum area provided for  under  the\tGovernment's\nIndustrial Housing Scheme; (v) 20% of total minimum wage for\nfuel, lighting and other miscellaneous items. [p. 136 D-G]\n    Express  Newspapers (P) Ltd. v. Union of  India,<\/a>  [1959]\nSCR 12, followed.\n    Standard  Vacuum Refining Co. of India v. Its Workmen  &\nAnr.,<\/a> [1961] 3 SCR 536, relied on.\n132\n    Keeping  in view the socio-economic aspect of  the\twage\nstructure the following additional component has also to  be\ntaken into account:\n\t       \"(vi)  children education,  medical  require-\n\t      ment,\tminimum\t    recreation\t   including\n\t      festivals\/ceremonies  and\t provision  for\t old\n\t      age, marriages etc. should further  constitute\n\t      25% of the total minimum wage,\"\n    The wage structure which approximately answers these six\ncomponents  is nothing more than a minimum wage at  subsist-\nence level. [p. 137 A-C]\n    2.3\t In  spite of the promise by the Constitution  of  a\nliving wage and a 'socialist' framework to enable the  work-\ning  people  a\tdecent standard of  life,  industrial  wage,\nlooking as a whole, has not yet risen higher than the  level\nof minimum wage. [p. 137 D-E]\n    3.1 Purchasing power of today's wage cannot be judged by\nmaking\tcalculations which are solely based on\t30\/40  years\nold wagestructure. The only reasonable way to determine\t the\ncategory of wage structure is to evaluate each component  of\nthe  category  concerned  in the  light\t of  the  prevailing\nprices. There has been skyrocking rise in the prices and the\ninflation chart is going up so fast that the only way to  do\njustice\t to  the labour is to determine the money  value  of\nvarious\t components  of the minimum wage in the\t context  of\ntoday. [p. 140 F-H]\n    3.2 In the instant case, the Company neither pleaded nor\nargued\tbefore the Tribunal that its financial position\t had\nso much deteriorated that it was not possible for it to bear\nthe  burden of the slab system of DA; nor did  the  Tribunal\ndeal  with this aspect of the matter while  considering\t the\ndemand of the Company for re-structuring the DA scheme.\t [p.\n144 F-G]\n    3.3\t Although  the DA paid by the Company  was  somewhat\nhigher than what was being paid by the other similar  indus-\ntries in the region, yet it could not be shown that what was\nbeing  paid  by the Company was higher than  what  would  be\nrequired  by the concept of need based minimum wage. In\t any\ncase  there is a very long way between the need\t based\twage\nand the living wage. [p. 145 AB]\n    4.\t The  Tribunal\tand the High Court  acted  in  total\noblivion  of  the  legal  position.  Consequently,  manifest\ninjustice has been caused\n133\nto the workmen by the award. It can, therefore, not be\tsaid\nthat  jurisdiction under Art. 136 stands repelled.  [p.\t 145\nCD]\n    Shaw  Wallace & Co. Ltd. v. Workmen,<\/a> [1978] 2 SCC  45  &\nThe  Statesman Ltd. v. Workmen,<\/a> [1976] 3 SCR  228,  referred\nto.\n    The\t Tribunal was not justified in abolishing  the\tslab\nsystem of DA which had stood the test of time for almost  30\nyears  and had been approved by various settlements  between\nthe  parties and as such the award of the Tribunal  and\t the\nHigh  Court judgments were unsustainable. [pp. 144  AB;\t 145\nDE]\n    Buckingham\tand  Carnatic Mills Ltd. v.  Their  Workers,<\/a>\n[1951]\t2 L.L,.J. 314 & Good Pastor Press v. Their  Workers,\n[1951I 2 L.L.J. 718, referred to.\n\n\n\nJUDGMENT:\n<\/pre>\n
    CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4336 (NL)
\nof 1991,
\n    From  the  Judgment\t and Order dated  14.9.1989  of\t the
\nMadras High Court in Writ Appeal No. 697 of 1989.
\n    M.K. Ramamurthy, Mrs. Chandan Ramamurthy and  M.A.Krish-
\nnamurthy for the Appellants.\n<\/p>\n
    F.S.Nariman, R.F.Nariman, T.S.Gopalan, Raian  Karanjiwa-
\nla,  Mrs. Manik Karanjiwala, Mrs. V.S.Rekha and Sajai  Singh
\nfor the Respondents.\n<\/p>\n
The Judgment of the Court was delivered by
\nKULDIP SINGH, J. Special leave granted.\n<\/p>\n
    The\t Reptakos Brett & Co. Ltd. (hereinafter\t called\t the
\n‘Company’)  is engaged in the manufacture of  pharmaceutical
\nand dietetic speciality products and is having three  units,
\ntwo  at Bombay and one at Madras. The Madras  factory.\twith
\nwhich  we  are concerned, was set-up in the year  1959.\t The
\nCompany\t on its own provided slab system of Dearness  Allow-
\nance (DA) which means the DA paid to the workmen was  linked
\nto cost of living index as well as the basic wage. The\tsaid
\ndouble-linked DA Scheme was included in various\t settlements
\nbetween\t the Company and the workmen and remained  operative
\nfor  about thirty years. The question for our  consideration
\nis  whether the Company is entitled to re-structure  the  DA
\nscheme\tby abolishing the slab system and  substituting\t the
\nsame  by  the  Scheme–prejudicial to  the  workmen–on\t the
\nground that the slab system
\n134<\/span>
\nhas  resulted  in over-neutralisation  thereby\tlanding\t the
\nworkmen in the high-wage island.\n<\/p>\n
    The first settlement between the Company and the workmen
\nwas  entered  into on August 11, 1964. While  accepting\t the
\ndouble-linked DA it further provided variable DA limited  to
\nthe cost of living index up to 5.41-5.50. Further relief was
\ngiven  to the workmen in the settlement dated July 18,\t1969
\nwhen  the limit on the variable DA was removed. The  Company
\nrevised\t the rates of DA on August 7, 1971. Thereafter,\t two
\nmore  settlements  were entered into on July  4,  1974,\t and
\nJanuary 4, 1979, respectively. Slab system with variable  DA
\ncontinued to be the basic constituent of the  wage-structure
\nin the company from its inception.\n<\/p>\n
    The position which emerges is that in the year 1959\t the
\nCompany on its own introduced slab system of DA. In 1964  in
\naddition,  variable DA to the limited extent was  introduced
\nbut  the said limit was removed in the 1969 settlement.\t The
\nsaid DA scheme was reiterated in the 1979 settlement. It  is
\nthus  obvious that the slab system of DA introduced  by\t the
\nCompany\t in the year 1959 and its progressive  modifications
\nby various settlements over a period of almost thirty years,
\nhas  been  consciously accepted by the parties\tand  it\t has
\nbecome a basic feature of the wage structure in the Company.
\n    The\t workmen  raised several demands in  the  year\t1983
\nwhich  were  referred  for adjudication\t to  the  Industrial
\nTribunal,  Madras. The Company in turn made counter  demands
\nwhich  were also referred to the said Tribunal. One  of\t the
\nissues before the Tribunal was as under:–
\n“Whether the demand of the Management for re-structuring  of
\nthe dearness allowance scheme is justified, if so, to  frame
\na scheme?”\n<\/p>\n
    The\t Tribunal decided the above issue in favour  of\t the
\nCompany\t and by its award dated October 14,  1987  abolished
\nthe  existing slab system of DA and directed that in  future
\ndearness  allowance  in the Company, be linked only  to\t the
\ncost  of living index at 33 paise per point over 100  points
\nof  the\t Madras\t City Cost of living Index  1936  base.\t The
\nTribunal  disposed of the two References by a common  award.
\nThe  Company  as  well as the workmen  filed  separate\twrit
\npetitions before the Madras High Court challenging the award
\nof  the Tribunal. While the two writ petitions were  pending
\nthe  parties filed a joint memorandum dated June  13,  1988,
\nbefore the High Court in the following terms:\n<\/p>\n
135<\/span><\/p>\n
\t      “In  view\t of the settlement  dated  13.5.1988
\n\t      entered  into between the parties, a  copy  of
\n\t      which  is enclosed, both the parties  are\t not
\n\t      pressing\t theft\trespective  writ   petitions
\n\t      except  with regard to the issue\trelating  to
\n\t      re-structuring of dearness allow-
\n    The learned Single Judge of High Court upheld the  find-<\/p>\n
ings  of the Tribunal on the sole surviving issue  and\tdis-
\nmissed\tthe  writ petition of the workmen. The\twrit  appeal
\nfiled by the workmen was also dismissed by the High Court by
\nits judgment dated September 14, 1989. The present appeal by
\nspecial leave is against the award of the Tribunal as upheld
\nby the High Court.\n<\/p>\n
      Mr..M.K.\tRamamurthy, learned counsel for\t the  appel-
\nlants has raised following points for our cosideration:–\n<\/p>\n
\t\t(i) The Tribunal and the High Court  grossly
\n\t      erred in taking Rs. 26 as a per-war wage of  a
\n\t      worker  in Madras region and, on\tthat  arith-
\n\t      metic, reaching a conclusion that the rate  of
\n\t      neutralisation on the basis of cost of  living
\n\t      index in December 1984 was 192
\n\t      per cent.\n<\/p><\/blockquote>\n
\t\t(ii)  Even if it is assumed that  there\t was
\n\t      over-neutralisation  unless the pay  structure
\n\t      of  the  workmen is within the  concept  of  a
\n\t      ‘living  wage’  and in addition it  is  proved
\n\t      that financially the Company is unable to bear
\n\t      the  burden–the\texisting  pay\tstructure\/DA
\n\t      scheme  cannot be revised to the prejudice  of
\n\t      the work-men.\n<\/p><\/blockquote>\n
\t\t(iii)  In any case the DA scheme–which\t was
\n\t      voluntarily  introduced  by  the\tCompany\t and
\n\t      reiterated  in various settlements  cannot  be
\n\t      altered to the determent of the workmen.”
\n\t\t  Before  the points are dealt with, we\t may
\n\t      have  a  fresh-look into various\tconcepts  of
\n\t      wage  structure in the industry. Broadly,\t the
\n\t      wage  structure  can  be\tdivided\t into  three
\n\t      categories   the\tbasic “minimum\twage”  which
\n\t      provides\tbare subsistence and is at  poverty-
\n\t      line level, a little above is the “fair  wage”
\n\t      and finally the “living wage” which comes at a
\n\t      comfort level. It is not possible to demarcate
\n\t      these levels of wage structure with any preci-
\n\t      sion. There are, however, well accepted  norms
\n\t      which broadly distinguish one category of\t pay
\n\t      structure from another. The Fair Wages Commit-
\n\t      tee, in its report published by the Government
\n\t      of India, Ministry of Labour, in 1949, defined
\n\t      the “living wage” as under:\n<\/p><\/blockquote>\n
\t      “the living wage should enable the male earner
\n\t      to  provide  for himself and  his\t family\t not
\n\t      merely the bare essentials of food,
\n\t      136<\/span>
\n\t      clothing\tand shelter but a measure of  frugal
\n\t      comfort including education for the the  chil-
\n\t      dren,  protection against illhealth,  require-
\n\t      ments of essential social needs, and a measure
\n\t      of  insurance against the more important\tmis-
\n\t      fortunes including  old age.”\n<\/p><\/blockquote>\n
“The Committee’s view regarding “minimum wage was as under:
\n“the  minimum  wage  must provide not merely  for  the\tbare
\nsustenance of life but for the preservation of the efficien-
\ncy  of\tthe worker. For this purpose the minimum  wage\tmust
\nalso provide for some measure of education. medical require-
\nments and amenities.”\n<\/p>\n
\t\t  The Fair Wages Committee’s Report has been
\n\t      broadly  approved\t by this  Court\t in  Express
\n\t      Newspapers (P) Ltd. v. Union of India,<\/a>  [1959]
\n\t      SCR  12  and Standard Vacuum Refining  Co.  of
\n\t      India  v. Its Workmen and Anr.,<\/a> [1961]  3\t SCR\n<\/p><\/blockquote>\n
\t      536.
\n\t\t  The  Tripartite  Committee of\t the  Indian
\n\t      Labour  Conference held in New Delhi  in\t1957
\n\t      declared\tthe  wage  policy which\t was  to  be
\n\t      followed during the Second Five Year Plan. The
\n\t      Committee\t accepted the following\t five  norms
\n\t      for the fixation of ‘minimum wage’:
\n\t\t“(i)  In calculating the minimum  wage,\t the
\n\t      standard working class family should be  taken
\n\t      to  consist  of 3 consumption  units  for\t one
\n\t      earner;  the earnings of women,  children\t and
\n\t      adolescents should be disregarded.\n<\/p><\/blockquote>\n
\t\t(ii)  Minimum  food  requirement  should  be
\n\t      calculated  on  the basis of a net  intake  of
\n\t      calories, as recommended by Dr. Aykroyd for an
\n\t      average Indian adult of moderate activity.\n<\/p><\/blockquote>\n
\t\t(iii) Clothing requirements should be  esti-\n<\/p><\/blockquote>\n
\t      mated  at per capita consumption of  18  yards
\n\t      per  annum  which would give for\tthe  average
\n\t      workers’ family of four, a total of 72 yards.\n<\/p><\/blockquote>\n
\t\t(iv) In respect of housing, the rent  corre-\n<\/p><\/blockquote>\n
\t      sponding\tto  the minimum\t area  provided\t for
\n\t      under  Government’s Industrial Housing  Scheme
\n\t      should  be taken into consideration in  fixing
\n\t      the minimum wage.\n<\/p><\/blockquote>\n<\/blockquote>\n
\t\t(v) Fuel, lighting and other ‘miscellaneous’
\n\t      items of expenditure should constitute 20%  of
\n\t      the total minimum wage.”\n<\/p><\/blockquote>\n
\t      This Court in Standard Vacuum Refining  Compa-
\n\t      ny’s  case (supra) has referred to  the  above
\n\t      norms with approval.<\/p><\/blockquote>\n
\t      The concept of ‘minimum wage’ is no longer the
\n\t      same as it was in
\n\t      137<\/span>
\n1936. Even 1957 is way-behind. A worker’s wage is no  longer
\na  contract between an employer and an employee. It has\t the
\nforce  of collective bargaining under the labour laws.\tEach
\ncategory of the wage structure has to be tested at the anvil
\nof  social  justice which is the live-fibre of\tour  society
\ntoday. Keeping in view the socio-economic aspect of the wage
\nstructure,  we are of the view that it is necessary  to\t add
\nthe following additional component as a guide for fixing the
\nminimum wage in the industry:–\n<\/p>\n
\t       “(vi)  children education,  medical  require-\n<\/p><\/blockquote>\n
\t      ment,\tminimum\t    recreation\t   including
\n\t      festivals\/ceremonies  and\t provision  for\t old
\n\t      age, marriages etc. should further  constitute
\n\t      25% of the total minimum wage.\n<\/p><\/blockquote>\n
The wage structure which approximately answers the above six
\ncomponents  is nothing more than a minimum wage at  subsist-
\nence  level. The employees are entitled to the minimum\twage
\nat  all times and under all circumstances. An  employer\t who
\ncannot\tpay the minimum wage has no right to  engage  labour
\nand no justification to run the industry.\n<\/p>\n
    A living wage has been promised to the workers under the
\nconstitution. A ‘socialist’ framework to enable the  working
\npeople a decent standard of life, has further been  promised
\nby  the\t 42nd Amendment. The workers are  hopefully  looking
\nforward\t to  achieve  the  said\t ideal.\t The  promises\t are
\npilling-up  but the day of fulfilment is nowhere  in  sight.
\nIndustrial  wage   looking  as a whole–has  not  yet  risen
\nhigher than the level of minimum wage.\n<\/p>\n
     Adverting\tto the first point raised by Mr.  Ramamurthy
\nit would be convenient to quote–from the award–the conten-
\ntions of the Company and the findings reached by the  Tribu-
\nnal.  The  Company’s case as noticed by the tribunal  is  as
\nunder:–\n<\/p>\n
\t      “It  is  stated  that the pre-war\t wage  of  a
\n\t      worker  in the Madras Region was Rs.26. It  is
\n\t      evidenced by the decision of the Labour Appel-
\n\t      late Tribunal reported in 1951 1I L.L.J.\tpage
\n\t      314  (Buckingham and Carnatic Mills  v.  Their
\n\t      workers)\tand  1951 II L.L.J. page  718  (Good
\n\t      Pastor Press v. Their workers). It is contend-
\n\t      ed  that\ttaking the pre-war minimum  wage  of
\n\t      worker  at  Madr,ks being R:,.  26  per  month
\n\t      equivalent to 100 per cent neutralization\t the
\n\t      rate  of\tDearness Allowance at 26  paisa\t for
\n\t      every point above 100 points of cost of living
\n\t      index would work out to 100 per cent neutrali-
\n\t      sation. On the above basis at
\n\t      138<\/span>
\n\t      2780 points of cost of living index in  Decem-
\n\t      ber  1984, the 100 per cent  neutralised\twage
\n\t      should  be  Rs. 722.80 (basic wage of  Rs.  26
\n\t      plus  dearness  allowance of Rs.\t696.80).  As
\n\t      against  the  above wage a  workman  of  lower
\n\t      grade  in the Petitioner’Company\tin  December
\n\t      1984   was  getting  a  total  wage   of\t Rs.
\n\t      1,`394\/comprising\t  of  basic  plus   dearness
\n\t      allowance\t plus house rent allowance  and\t the
\n\t      rate  of neutralisation of dearness  allowance
\n\t      correspondingly works out to 192 per cent.”<\/p><\/blockquote>\n
    The\t Tribunal  accepted  the above\tcontentions  of\t the
\nCompany.  The  evidence produced by the\t Company,  regarding
\nprevailing  DA schemes in the comparable industries  in\t the
\nregion,\t was  also taken into  consideration.  The  Tribunal
\nfinally decided as under:\n<\/p>\n
\t      “Taking  an overall view of the rate of  dear-
\n\t      ness  allowance paid by these comparable\tcon-
\n\t      cerns  in\t the  region and  the  higher  total
\n\t      emoluments  received  by the workmen  in\tthis
\n\t      establishment,  the  slab system\tof  dearness
\n\t      allowance\t now in existence shall stand  abol-
\n\t      ished and in future, dearness allowance in the
\n\t      Petitioner-Management would be linked only  to
\n\t      the cost of living index at 33 paise per point
\n\t      over  100\t points of the Madras City  Cost  of
\n\t      Living Index 1936 base and it shall be  effec-
\n\t      tive  from  the month in which  the  award  is
\n\t      published in the Tamil Nadu Gazette.”
\n\t\t  The learned Single Judge of the High Court
\n\t      upheld the above findings of the Tribunal. The
\n\t      Division\tBench  of the High  Court,  in\twrit
\n\t      appeal, approved the award and the judgment of
\n\t      the  learned  Single Judge  in  the  following
\n\t      words–\n<\/p><\/blockquote>\n
“The  learned  judge has observed that the counsel  for\t the
\nManagement had taken him through all the relevant  materials
\nwhich were filed in the form of Exhibits before the Tribunal
\nin  order  to show that the matter  of\tover  neutralisation
\ncannot\tbe in dispute. Thus the learned Judge  proceeded  on
\nthe basis that there is over neutralisation which called for
\ndevising  a  scheme for restructuring the wage\tscale.\tThis
\nfinding cannot be interfered with as no materials have\tbeen
\nplaced before us by the learned counsel for the appellant to
\nshow  that  the exhibits which were perused by\tthe  learned
\nJudge do not support his conclusion. Hence, we hold that the
\ncontention  that  there are no compelling  circumstances  in
\nthis  case  to revise the pattern of dearness  allowance  is
\nunsustainable.”\n<\/p>\n
139<\/span><\/p>\n
    According  to the Company the only purpose of DA  is  to
\nenable a worker-in the event of a rise in cost of living–to
\npurchase  the  same amount of goods of\tbasic  necessity  as
\nbefore.\t In other words the DA is to neutralise the rise  in
\nprices. the said purpose can be achieved by providing  maxi-
\nmum  of 100 per cent neutralisation. Accepting the  calcula-
\ntions  of  the\tCompany based on Rs. 26\t being\tthe  pre-war
\n(1936)\tminimum wage in Madras region the Tribunal  came  to
\nthe finding that there was 192 per cent neutralisation.
\n    The Tribunal accepted Rs. 26 as the pre-war minimum wage
\nin  Madras  region on the basis of the decisions  of  Labour
\nAppellate Tribunal of India in Buckingham and Carnatic Mills
\nLtd.  v. Their workers, [1951] 2 L.L.J. 314 and Good  Pastor
\nPress v. Their workers, [1951] 2 L.L.J. 718.
\n    In\tBuckingham case the appellate tribunal came  to\t the
\nconclusion  that  the basic wage of the lowest\tcategory  of
\noperatives on the living cost of index of the year 1936\t was
\nRs.  28.  The said wage included Rs.16-1\/2  as\texpenses  on
\ndiet.  The workers relied upon the Textile  Enquiry  Commit-
\ntee’s report to claim 25% addition to the diet-expenses. The
\nAppellate  Tribunal rejected the report on the\tground\tthat
\nthe recommendations in the said report were for the  purpose
\nof attaining the standard of “living wage” and not of  ‘min-
\nimum wage’. The Appellate Tribunal stated as under:
\n“The  Union  however, contends that Dr. Akroyd\trevised\t his
\nopinion when submitting a specially prepared note to  assist
\nthe  Textile Enquiry Committee, Bombay of which Mr.  Justice
\nDivatia\t was the Chairman, where he is said to\thave  stated
\nthat 25 per cent more will have to be added for obtaining  a
\nbalanced diet for a minimum wage earner. The report of\tthat
\nEnquiry\t Committee,  which was published in  1940,  however,
\nshows that Dr. Akroyd added 25 per cent as the costs of\t the
\nextra items to his standard menu such as sugar etc., for the
\npurpose\t of  attaining the standard menu of  ‘living  wages’
\n(final report of the Textile Labour Enquiry Committee  1940,
\nVol.II,\t pages\t70  to 71). Therefore, for  the\t purpose  of
\nfixing ‘minimum wages’ that 25 per cent is not to be added.”\n<\/p>\n
     The  question  as\tto whether  the\t recommendations  of
\nTextile Enquiry Committee were in relation to ‘living  wage’
\nor  ‘minimum wage’ came for consideration before this  Court
\nin Standard Vacuum case (supra). This Court held as under:
\n“It  is\t obvious that the Committee was really\tthinking  of
\nwhat
\n140<\/span>
\n\t      is  today described as the minimum  need-based
\n\t      wage,  and  it found that judged by  the\tsaid
\n\t      standard the current wages were deficient.  In
\n\t      its  report  the Committee has used  the\tword
\n\t      ‘minimum’\t in regard to some of the  constitu-
\n\t      ents  of the concept of living wage,  and\t its
\n\t      calculations  show  that it  did\tnot  proceed
\n\t      beyond the minimum level in respect of any  of
\n\t      the  said constituents. Therefore, though\t the
\n\t      expression  ‘living  wage standard’  has\tbeen
\n\t      used  by\tthe Committee in its report  we\t are
\n\t      satisfied\t that  Rs. 50 to Rs.  55  cannot  be
\n\t      regarded\tas  anything higher  than  the\tneed
\n\t      based  minimum wage at that time. If  that  be
\n\t      the  true position the whole basis adopted  by
\n\t      the appellant in making its calculations turns
\n\t      out to be illusory.”\n<\/p>\n
    This  Court, therefore, in Standard Vacuum case came  to
\nthe  conclusion that the Textile Labour Committee Report  in
\nthe year 1940 in its calculations did not proceed beyond the
\nminimum\t level\tof the wage structure. It was  further\theld
\nthat Rs. 50 to Rs. 55 was the need-based minimum wage in the
\nyear 1940.\n<\/p>\n
    The\t Appellate  Tribunal in Buckingham  case,  therefore
\nmisread\t the Textile Committee Report and was not  justified
\nin  rejecting the same on the ground that it related to\t the
\ncategory of ‘living wage’
\n    We\tare of the view that it would not be safe to  accept
\nthe findings of the Appellate Tribunal in Buckingham case as
\nthe basis for fixing the wage structure to the prejudice  of
\nthe workmen. This court in Standard Vacuum case (supra)\t has
\nfurther\t held  that in Bombay the minimum wage in  the\tyear
\n1940 was Rs.50 to Rs.55. On that finding it is not  possible
\nto  accept that the minimum wage in the year 1936 in  Madras
\nregion was Rs.26\/28. So far as the Good Pastor Press case is
\nconcerned  the question of determining the minimum  wage  in
\nper-war 1936 was not before the Appellate Tribunal. It\tonly
\nmentioned  the fact that Rs.26 was held to be so by some  of
\nthe subordinate tribunals. There was no discussion at all on
\nthis point. The Tribunal’s reliance on this case was  wholly
\nmisplaced.\n<\/p>\n
    In any cause we are of the opinion that purchasing power
\nof  today’s  wage cannot be judged  by\tmaking\tcalculations
\nwhich  are solely based on 30\/40 years old  wage  structure.
\nThe  only reasonable way to determine the category  of\twage
\nstructure  is  to evaluate each component  of  the  category
\nconcerned  in the light of the prevailing prices. There\t has
\nbeen sky-rocking rise in the prices and the inflation  chart
\nis  going up so fast that the only way to do justice to\t the
\nlabour is to determine the money value of various components
\nof the minimum wage in the context of today.\n<\/p>\n
141<\/span><\/p>\n
    We may now move on to the second and third point  raised
\nby  Mr.\t Ramamurthy. We take up these points  together.\t Mr.
\nF.S.  Nariman,\tlearned counsel appearing for  the  Company,
\ncontended that the existing DA scheme can be revised even to
\nthe  prejudice\tof the workmen and for that  proposition  he
\nrelied upon the judgment of this Court in M\/s. Crown Alumin-
\nium  works  v. Their Workmen, [1958] S.C.R. 651.  Mr.  Rama-
\nmurthy\thas, however, argued that even if the contention  of
\nMr.  Nariman is accepted in principle, the Company  has\t not
\nbeen  able to make-out a case for such a revision.  In\tM\/s.
\nCrown  Aluminium  Works\t case this  Court  speaking  through
\nGajendragadkar, J.(as he then was) held as under:–\n<\/p>\n
\t      “The  question posed before us by Mr. Sen\t is:
\n\t      Can the wage structure fixed in a given indus-
\n\t      try  be never revised to the prejudice of\t its
\n\t      workmen?\tConsidered as a general question  in
\n\t      the abstract it must be answered in favour  of
\n\t      Mr.  Sen. We do not think it would be  correct
\n\t      to  say that in no  conceivable  circumstances
\n\t      can  the\twage  structure be  revised  to\t the
\n\t      prejudice of workmen. When we make this obser-
\n\t      vation, we must add that even theoretically no
\n\t      wage structure can or should be revised to the
\n\t      prejudice\t of  workmen  if  the  structure  in
\n\t      question\tfalls  in the category of  the\tbare
\n\t      subsistence  or the minimum wage. If the\twage
\n\t      structure in question falls in a higher  cate-
\n\t      gory, then it would be open to the employer to
\n\t      claim  its revision even to the  prejudice  of
\n\t      the workmen provided a case for such  revision
\n\t      is made out on the merits to the\tsatisfaction
\n\t      of  the tribunal. In dealing with a claim\t for
\n\t      such  revision, the tribunal may have to\tcon-
\n\t      sider,  as  in the present  case\twhether\t the
\n\t      employer’s financial difficulties could not be
\n\t      adequately  met  by retrechment  in  personnel
\n\t      already  effected\t by the employer  and  sanc-
\n\t      tioned by the tribunal. The tribunal may\talso
\n\t      enquire  whether\tthe  financial\tdifficulties
\n\t      facing  the  employer are likely to  be  of  a
\n\t      short  duration or are going to face  the\t em-
\n\t      ployer  for  a  fairly long time.\t It  is\t not
\n\t      necessary, and would indeed be very difficult,
\n\t      to state exhaustively all considerations which
\n\t      may  be  relevant in a given case.  It  would,
\n\t      however,\tbe  enough to  observe\tthat,  after
\n\t      considering  all\tthe relevant facts,  if\t the
\n\t      tribunal\tis satisfied that a case for  reduc-
\n\t      tion  in\tthe wage structure has\tbeen  estab-
\n\t      lished  then it would be open to the  tribunal
\n\t      to  accede to the request of the\temployer  to
\n\t      make appropriate reduction in the wage  struc-
\n\t      ture, subject to such conditions as to time or
\n\t      otherwise\t that the tribunal may deem  fit  or
\n\t      expedient to impose.”\n<\/p><\/blockquote>\n
\t      142<\/span><\/p>\n
    The above dicta was reiterated by this Court in  Ahmeda-\n<\/p><\/blockquote>\n
bad  Mills Owners, Association etc. v. The  Textiles  Labour
\nAssociation,  [1961]  1 SCR 382 wherein this  Court  through
\nGajendragadkar, CJ, laid down as under:–\n<\/p>\n
\t      “The  other aspect of the matter which  cannot
\n\t      be ignored is that if a fair wage structure is
\n\t      constructed by industrial adjudication and  in
\n\t      course  of  time, experience  shows  that\t the
\n\t      employer\tcannot bear the burden of such\twage
\n\t      structure, industrial adjudication can, and in
\n\t      a\t proper case should revise the\twage  struc-
\n\t      ture,  though such revision may result in\t the
\n\t      reduction\t  of   the   wages   paid   to\t the
\n\t      employees………………..   if it  appears
\n\t      that  the\t employer  cannot  really  bear\t the
\n\t      burden of the increasing wages bill industrial
\n\t      adjudication,  on principle, cannot refuse  to
\n\t      examine  the  employer’s case and\t should\t not
\n\t      hesitate to give him relief if it is satisfied
\n\t      that if such relief is not given, the employer
\n\t      may     have     to     close\tdown\t his
\n\t      business…………….\t  This\t  principle,
\n\t      however,\tdoes  not apply to cases  where\t the
\n\t      wages paid to the employees are no better than
\n\t      the basic minimum wage. If, what the  employer
\n\t      pays  to his employees is just the basic\tsub-
\n\t      sistence\twage, then it would not be  open  to
\n\t      the employer to contend that even such a\twage
\n\t      is beyond his paying capacity.”<\/p><\/blockquote>\n
    The ratio which emerges from the judgments of this Court
\nis that the management can revise the wage structure to\t the
\nprejudice  of the workmen in a case where due  to  financial
\nstringency it is unable to bear the burden of the  existing-
\nwage. But in an industry or employment where the wage struc-
\nture  is at the level of minimum wage, no such\trevision  at
\nall,  is permissible – not even on the ground  of  financial
\nstringency.  It is, therefore, for the management, which  is
\nseeking\t restructuring of DA scheme to the  disadvantage  of
\nthe  workmen  to prove to the satisfaction of  the  tribunal
\nthat  the wage-structure in the industry concerned  is\twell
\nabove minimum level and the management is financially not in
\na  position to bear the burden of the existing\twage  struc-
\nture.\n<\/p>\n
    Mr. Ramamurthy further relied upon this Court’s judgment
\nin MonthlyRated workmen at the Wadala factory of the  Indian
\nHume  Pipe  Co. Ltd. v. Indian Hume Pipe Co.  Ltd.,  Bombay,
\n[1986] 2 S.C.R. 484 and contended that an employer cannot be
\npermitted to abolish the DA scheme which has worked smoothly
\nfor almost thirty years on the plea that the said scheme  is
\nmore beneficial than the DA schemes adopted by other  indus-
\ntries  in the region. In the Indian Hume Pipe Co.  Ltd\tcase
\nthe management pleaded
\nthat  the dearness allowance enjoyed by the workmen  was  so
\nhigh in certain cases that neutralisation was at rates\tmuch
\nhigher than 100%. It was further contended that the  manage-
\nment did not have the capacity to pay the slab system of  DA
\nand in the event of a claim for similar DA by other  workmen
\nthe  management\t might\thave to close  down  the  factories.
\nKhalid, J. spoke for the court as under:–\n<\/p>\n
\t      “We  thought  it\tnecessary to  refer  to\t the
\n\t      various  awards  read by Mr.Pai only  for\t the
\n\t      completeness  of\tthe judgment. It has  to  be
\n\t      borne  in\t mind that in most of  these  cases,
\n\t      awards  were  passed at the  instance  of\t the
\n\t      employees\t when demands were made for  raising
\n\t      the dearness allowance paid to them. Here,  we
\n\t      have  the case of the employer trying  to\t get
\n\t      over a system of dearness allowance which\t had
\n\t      worked smoothly for 18 years, on the  specious
\n\t      plea  that  at the time the  slab\t system\t was
\n\t      introduced,  it was not in the expectation  of
\n\t      anyone  that  the cost of\t price\tindex  would
\n\t      spiral up so much as to make it impossible for
\n\t      the  company to pay according to this  scheme.
\n\t      From  the materials available we do  not\tfind
\n\t      that  this plea can be accepted.\tThe  records
\n\t      produced\tshow  that despite  this  system  of
\n\t      dearness allowance the Company has been making
\n\t      profits  and has been improving  its  position
\n\t      year by year………….\t we do not think  it
\n\t      necessary\t to deal at length about the  evolu-
\n\t      tion  of\tthe concept of\tdearness  allowance.
\n\t      Suffice  it to say that this Court has,  often
\n\t      times,  emphasised the need for a living\twage
\n\t      to workmen instead of a subsisting wage. It is
\n\t      indeed  a matter of concern and  mortification
\n\t      that  even today the aspirations of  a  living
\n\t      wage  for\t workmen  remain  a   mirage  and  a
\n\t      distant dream. Nothing short of a living\twage
\n\t      can be a fair wage. It should be the  combined
\n\t      effort  of all concerned including the  Courts
\n\t      to  extend to workmen a helping hand  so\tthat
\n\t      they  get a living wage which would keep\tthem
\n\t      to some extent at least free from want. It  is
\n\t      against  this background that a claim  by\t em-
\n\t      ployers to change the conditions of service of
\n\t      workmen  to their detriment has to be  consid-
\n\t      ered and it is against this background that we
\n\t      have  considered the award review. We are\t not
\n\t      satisfied that a case has been made out on the
\n\t      facts\t    available\t      for\t   a
\n\t      change……………….\t  The  question\t  is
\n\t      often asked as to whether it would be  advisa-
\n\t      ble  for\tTribunals and Courts to\t revise\t the
\n\t      wage  structure of workmen to their  prejudice
\n\t      when  a  dispute arises. Normally\t the  answer
\n\t      would be in the negative. Tribunals and Courts
\n\t      can take judicial notice of one fact; and that
\n\t      is that the wages of workmen, except  inexcep-
\n\t      tionally rare cases,
\n\t      144<\/span>
\n\t\t   fail\t within the category of\t mere  “sub-
\n\t      sisting  wages”.\tThat being so, it  would  be
\n\t      inadvisable to tinker with the wage  structure
\n\t      of  workmen  except under\t compelling  circum-
\n\t      stances.”<\/p><\/blockquote>\n
    We\tagree with Mr. Ramamurthy that the DA  scheme–which
\nhad  stood the test of time for almost thirty years and\t had
\nbeen   approved\t  by   various\t settlements   between\t the
\nparties–has  been  unjustificably abolished by\t the  Courts
\nbelow  and  as such the award of the Tribunal and  the\tHigh
\nCourt Judgments are unsustainable.\n<\/p>\n
    Mr.\t Nariman  has also relied on the  judgment  of\tthis
\nCourt  in Killick Nixon Ltd. v. Killick &  Allied  Companies
\nEmployees’  Union,<\/a> [1975] Suppl. S.C.R. 453 to\tsupport\t the
\nfindings  of the Tribunal and the High Court. The said\tcase
\ndoes  not lay down that in all cases the slab system  of  DA
\nshould be abolished to the prejudice of the workers. In\t the
\nsaid  case this Court on the facts of the case came  to\t the
\nconclusion that the employer had made out a case for putting
\na ceiling on the dearness allowance. The ratio of that\tcase
\ncannot be extended to interfere with the existing DA schemes
\nin  every  case\t where such schemes are\t beneficial  to\t the
\nworkmen.\n<\/p>\n
    Mr. Nariman has invited our attention to para 20 of\t the
\nAward wherein the tribunal has held as under:\n<\/p>\n
\t      “These  figures as detailed in  Ex.M-13  would
\n\t      establish that the company is not in a  finan-
\n\t      cial position to bear the additional burden on
\n\t      account of increased wages.”<\/p><\/blockquote>\n
    From  the above finding it was sought to be\t shown\tthat
\nthe  Company has proved to the satisfaction of the  Tribunal
\nthat financially it was not in a position to bear the burden
\nof the existing DA scheme. We do not agree with the  learned
\ncounsel.  The Tribunal gave the above finding in the  refer-
\nence made on behalf of the workmen asking for bonus increase
\nand  various  other monetary benefits. While  rejecting\t the
\ndemands\t of the workmen the Tribunal gave the above  finding
\nwhich related to the additional burden accruing in the event
\nof acceptance of the workers’ demands. The Tribunal  nowhere
\nconsidered  the financial position of the  company  vis-avis
\nthe  existing  DA scheme. The Company  neither\tpleaded\t nor
\nargued\tbefore the Tribunal that its financial position\t had
\nso much deteriorated that it was not possible for it to bear
\nthe  burden of the slab system of DA. The Tribunal  has\t not
\ndealt  with this aspect of the matter while considering\t the
\ndemand of the Company for re-structuring the DA scheme.
\n    It has been pleaded by the company that its workmen\t are
\nin a high wage island and as such the revision of DA  scheme
\nwas justified. The
\n145<\/span>
\nCompany\t also produced evidence before the Tribunal to\tshow
\nthat comparable concerns in the region were paying lesser DA
\nto its workmen. On the basis of the material produced before
\nthe  Tribunal all that the Company has been able to show  is
\nthat the DA paid by the Company is somewhat higher than what
\nis being paid by the other similar industries in the region.
\nThere  is, however, no material on the record to  show\tthat
\nwhat is being paid by the company is higher than what  would
\nbe  required by the concept of need based minimum  wage.  In
\nany  case  there is a very long way between the\t need  based
\nwage and the living wage.\n<\/p>\n
    Mr.\t Nariman reminded us of the limits on our  jurisdic-
\ntion  under  Article 136 of the Constitution  of  India\t and
\nrelying\t upon Shaw Wallace & Co. Ltd. v. Workmen,<\/a>  [1978]  2
\nSCC  45 and The Statesman Ltd. v. Workmen,<\/a> [1976] 3 SCR\t 228
\ncontended that so long as there is “some basis, some materi-
\nal  to validate the award” the “jurisdiction  under  Article
\n136  stands repelled”. The Tribunal and the High  Court,  in
\nthis case, has acted in total oblivion of the legal position
\nas propounded by this court in various judgments referred to
\nby us. Manifest injustice has been caused to the workmen  by
\nthe award under appeal. We see no force in the contention of
\nthe learned counsel.\n<\/p>\n
    In view of the above discussion we are of the view\tthat
\nthe Tribunal was not justified m abolishing the slab  system
\nof  DA which was operating in the Company for almost  thirty
\nyears.\tWe allow the appeal and set aside the award  of\t the
\nTribunal and the judgment of the learned Single Judge in the
\nwrit petition and of the Division Bench in the Writ  Appeal.
\nThe reference of the Company on the issue of  re-structuring
\nof  the\t dearness allowance is declined\t and  rejected.\t The
\nAppellant-workmen shall be entitled to their costs  through-
\nout which we assess at Rs. 25,000.\n<\/p>\n
R.P.\t\t\t\t\t\t      Appeal\nallowed:\n146<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Workmen Represented By Secretary vs Management Of Reptakos Brett.And … on 31 October, 1991 Equivalent citations: 1992 AIR 504, 1991 SCR Supl. (2) 129 Author: K Singh Bench: Kuldip Singh (J) PETITIONER: WORKMEN REPRESENTED BY SECRETARY Vs. RESPONDENT: MANAGEMENT OF REPTAKOS BRETT.AND CO. LTD. AND ANR. DATE OF JUDGMENT31\/10\/1991 BENCH: KULDIP […]<\/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-7514","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nWorkmen Represented By Secretary vs Management Of Reptakos Brett.And ... on 31 October, 1991 - 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\/workmen-represented-by-secretary-vs-management-of-reptakos-brett-and-on-31-october-1991\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Workmen Represented By Secretary vs Management Of Reptakos Brett.And ... on 31 October, 1991 - 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