1. Dispute between an all-India company and its workmen regarding the retirement age and the scale of gratuity payments. (Para 1 , 2 )
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1959 Supreme(SC) 185
SUPREME COURT OF INDIA
16th October, 1959.
B.P. SINHA, C.J.I., P.B. GAJENDRAGADKAR AND K.N. WANCHOO, JJ.
Dunlop Rubber Co. (India) Ltd., Appellant
Versus
The Workmen (clerical staff) and others, Respondents.
Civil Appeals Nos. 159 and 160 of 1959.
Advocates appeared
Mr. N. A. Palkhivala, Advocate and M/s. S. N. Andley, J. B. Dadachanji and Rameshwar Nath, Advocates of M/s. Rajinder Narain & Co., for Appellant; M/S. C. L. Dudhia and K. L. Hathi, Advocates, for Respondents Nos. 1 and 2.
Advocates:
C.L.DUDHIA, J.B.DADACHAN, K.L.Hathi, N.A.PALKHIWALA, RAJINDAR NARAIN, RAMESHWAR NATH ROY, S.N.ANDLEY
C.L.DUDHIA, J.B.DADACHAN, K.L.Hathi, N.A.PALKHIWALA, RAJINDAR NARAIN, RAMESHWAR NATH ROY, S.N.ANDLEY
Industrial adjudication follows the industry-cum-region basis. For all-India concerns, the desire for uniform service conditions does not override the tribunal's duty to ensure fairness and alignment with prevailing regional conditions, even when requested by a minority of employees.
Headnote:(A) Industrial Adjudication - All-India concerns - Uniformity of service conditions - Industry-cum-region basis - While uniformity in service conditions is desirable for all-India concerns, industrial adjudication is based on the industry-cum-region principle. If a uniform scheme appears unfair or not in accord with prevailing regional conditions, the tribunal is duty-bound to make changes to ensure fairness, irrespective of whether the demand is made by a small minority of workmen. (Para 5)
(B) Retirement Age - Fairness and regional trends - If the prevailing trend in regional awards is to fix the retirement age at 60 years, a tribunal may reasonably raise the retirement age from 55 to 60 years to ensure fairness, notwithstanding previous agreements. (Para 7)
(C) Gratuity Scheme - Unusual and unfair features - A tribunal is justified in altering a gratuity scheme to remove unusual or unfair features that are not in consonance with prevailing conditions in the region, even for an all-India concern. (Para 8)
Facts of the case:
An all-India concern had a uniform gratuity scheme and retirement age based on an agreement with the majority of its workmen in one region. A minority of workmen in another region challenged these terms, seeking an increase in retirement age from 55 to 60 and a revised gratuity scale. The Industrial Tribunal raised the retirement age and modified the gratuity scheme to make it uniform and fair.
Findings of Court:
The court held that the tribunal's decision to raise the retirement age to 60 and revise the gratuity scheme was based on prevailing regional conditions and fairness. The court found that the tribunal was not bound to maintain uniformity simply because the employer was an all-India concern.
Issues: Whether the tribunal was justified in altering the retirement age and gratuity scheme of an all-India concern at the instance of a minority of workmen, despite the existence of a uniform scheme agreed upon by the majority of workmen in another region.
Ratio Decidendi: Industrial adjudication is based on the industry-cum-region basis. The duty of the tribunal is to ensure fair conditions of service. If a uniform scheme across an all-India concern is unfair or inconsistent with prevailing regional conditions, the tribunal must modify it to bring it in line with such conditions, regardless of the size of the group of workmen raising the dispute.
Result: Appeals dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether uniform conditions of service in an all-India concern should prevail over regional adjustments requested by a minority of workmen. (Para 3 , 4 )
3. Industrial adjudication follows the industry-cum-region principle; tribunals must ensure fair service conditions in their region regardless of an entity's all-India character or the claimants' minority status. (Para 5 , 6 , 7 , 8 )
4. All-India uniformity of service conditions does not preclude a tribunal from altering unfair schemes to align with prevailing regional conditions. (Para 5 , 8 )
5. Appeals dismissed. (Para 9 )
6. Does the all-India character of a concern necessitate uniform conditions of service across all regions?
While uniformity is advisable, industrial adjudication is based on the industry-cum-region principle. Tribunals must ensure fair conditions of service prevail in the industry within their specific region, even if it requires altering uniform schemes of an all-India concern. (Para 5 )
7. Can a tribunal modify service conditions based on the demands of a small minority of workmen in an all-India concern?
Yes. If a scheme is unfair or inconsistent with prevailing regional conditions, the tribunal has the duty to make changes to ensure fairness, regardless of whether the demand is made by a small minority of workmen. (Para 5 )
8. What factors justify a tribunal's decision to increase retirement age or gratuity scales?
Such changes are justified if the existing terms are found to be unfair, too low, or unusual compared to the prevailing conditions and trends in other prosperous concerns within that specific region. (Para 7 , 8 )
Judgment
WANCHOO, J. : These two appeals by special leave arise out of two references made by the Government of Bombay in connection with a dispute between the appellant-company and two sets of its workmen, namely, clerical staff and staff other than clerical. The clerical staff had raised four questions which were referred to the Industrial Tribunal, Bombay for adjudication. Of these, only two points survive in the present appeal, namely, retirement age and gratuity. The non-clerical staff had raised two questions of which only one relating to gratuity arises before us.
2. It appears that the appellant-company is an all-India concern but the major part of its business is concentrated in Calcutta. The number of non-clerical staff outside Calcutta is very small as compared to the non-clerical staff in Calcutta while the clerical staff outside Calcutta is much less than the clerical staff in Calcutta. The company had a gratuity scheme in force which applied to both clerical and non-clerical staff, though there were differences in the scale of payment depending upon whether the basic salary drawn by workmen-other than operatives was more than Rs. 100 or less. In case of operatives, there was a uniform scale equal to the scale for workmen other than operatives drawing less than Rs. 100 or less. In case of operatives, there was a uniform scale equal to the scale for workmen other than operatives drawing less than Rs. 100 per mensem. The clerical and non-clerical staff in Bombay raised disputes and their main contention was that the scale fixed by the scheme in force was low and should be raised. As for the retirement age, the clerical staff claimed that it should be raised from 55 years to 60.
3. The case of the appellant-company before the tribunal was that as the large majority of the staff both clerical and non-clerical was in Calcutta and as the gratuity scheme and the retirement age were enforced by virtue of an agreement arrived at between the appellant-company and its workmen both clerical and others in Calcutta who are a large majority of its total workmen, they should not be changed at the instance of a small minority of workmen both clerical and others in Bombay. The tribunal did not accept this contention and raised the age of retirement from 55 years to 60. It also made changes in the gratuity scheme by which the scale was raised and made uniform both for clerical staff and others. Thereupon the appellant applied for and obtained special leave from this Court; and that is how the matter has come up before us.
4. Shri Palkhivala appearing for the appellant has raised only two points before us, relating to the raising of the retirement age and the change in the scale of gratuity, and we shall confine ourselves to these two points only. It is conceded by him that the Industrial Tribunal has jurisdiction to order the changes which it has ordered. But his contention is that though the jurisdiction may be there, the tribunal should take into account the special position of an all-India concern and should not make changes particularly at the instance of a small minority of workmen as that would lead to industrial unrest elsewhere. He further contends that the scale of gratuity and the age of retirement are matters which are independent of local conditions and therefore should be uniform throughout India in concerns which have an all-India character. He points out that the conditions of service in the appellant-company are uniform throughout India and were arrived at by agreement with the unions of workmen at Calcutta where the large majority of the workmen are employed, and in these special circumstances, the tribunal at Bombay should not have made any changes in the retiring age or in the gratuity scheme at the instance of the small minority of workmen in Bombay.
5. There is no doubt that in the case of an all-India concern it would be advisable to have uniform conditions of service throughout India and if uniform conditions preva
