1962 Supreme(SC) 435

SUPREME COURT OF INDIA
P.B. GAJENDRAGADKAR, K.N. WANCHOO, K.C. DAS GUPTA AND J.C. SHAH JJ.
Hindustan Times Ltd., New Delhi, Appellant
Versus
Their Workmen, Respondents.
Civil Appeals Nos 489 and 490 of 1961.
Advocates appeared
M/s G.S. Pathak and S.T. Desai, Senior Advocates, (M/s. M. L. Sethi, B. Datta and Dr. Anand Parkash, Advocates, with them), for Appellant (In C.A. No. 490 of 1961) and the Respondent (In C. A. No. 439 of 1961) Mr. M. C. Setalvad, Attorney-General for India, (M/s M. K. Ramamurthi, D. P. Singh, R.K. Garg and S. C. Agarwal, Advocates of M/s M. K. Ramamurthi and Co., with him) for Respondents, (In C.A. No. 489 of 1961) and Appellants (In C.A. No. 490 of 1961).

The fixation of wage structure is among the most difficult tasks that industrial adjudication has to tackle. In trying to keep true to the two points of social philosophy and economic necessities which vie for consideration, industrial adjudication has set for itself certain standards in the matter of wage fixation.

Headnote:

INDUSTRIAL DISPUTE - Wage scale, dearness allowance, adjustments, leave rules, gratuity and retrospective effect of the award - Principles governing the fixation of wage structure - Wage structure ceases to be a purely arithmetical problem as social conscience of the general community becomes more alive and active and as the welfare policy of the State takes more dynamic form - Considerations of the financial position of the employer and the state of national economy have their say, and the requirements of a workman living in a civilised and progressive society also come to be recognised - Wage scale fixed by the Tribunal is not too heavy for the Company to bear - Wage scale fixed by the Tribunal is not unfavourable to the Company vis-a-vis two other concerns in Delhi region - Dearness allowance should be on a sliding scale and provide for an increase on rise in the cost of living and a decrease on a fall in the cost of living - Directions given by the Tribunal in the matter of adjustments are proper and desirable - Tribunal's direction that interim relief will remain unaffected is set aside and direction is given that adjustments should be made in terms of the said interim arrangement - Tribunal's directions as regards sickness leave offend the provisions of Delhi Shops and Establishments Act, 1954 - Tribunal's direction that the practice of insistence on previous application for the purpose of casual leave should be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and that upto 3 days no medical certificate should be asked for is set aside - Scheme of gratuity as framed by the Tribunal is not unduly favourable to the workmen or that it places any undue strain on the Company's financial resources - Retirement age is fixed at 58 years, subject to the proviso that it will be open to the Company to continue in its employment a workman who has passed that age - Tribunal's direction that the reliefs given by it would become effective from the date of the reference is confirmed.

Fact of the Case:

The dispute arose out of an industrial dispute that was referred for adjudication to the Industrial Tribunal, Delhi by an order made on January 23, 1958 by the Chief Commissioner, Delhi. The Tribunal made its award on March 16, 1959. Out of the numerous matters that were included in the terms of reference, the Court was concerned only with a few. The employer challenged the award as regards: (1) Scales of pay, (2) Dearness allowance, (3) Adjustments, (4) Leave Rules, (5) Gratuity and (6) Retrospective effect of the award. The workmen also attacked the award as regards the scales of pay and dearness allowance. In addition, they have attacked the award as regards the working hours, leave rules, night shift allowance, retirement age and procedure for taking disciplinary action.

Finding of the Court:

The Court held that the wage scale fixed by the Tribunal is not too heavy for the Company to bear and is not unfavourable to the Company vis-a-vis two other concerns in Delhi region. The Court also held that the dearness allowance should be on a sliding scale and provide for an increase on rise in the cost of living and a decrease on a fall in the cost of living. The Court further held that the directions given by the Tribunal in the matter of adjustments are proper and desirable. The Court set aside the Tribunal's direction that interim relief will remain unaffected and directed that adjustments should be made in terms of the said interim arrangement. The Court also held that the Tribunal's directions as regards sickness leave offend the provisions of Delhi Shops and Establishments Act, 1954 and set aside the Tribunal's direction that the practice of insistence on previous application for the purpose of casual leave should be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and that upto 3 days no medical certificate should be asked for. The Court further held that the scheme of gratuity as framed by the Tribunal is not unduly favourable to the workmen or that it places any undue strain on the Company's financial resources. The Court fixed the retirement age at 58 years, subject to the proviso that it will be open to the Company to continue in its employment a workman who has passed that age. The Court also confirmed the Tribunal's direction that the reliefs given by it would become effective from the date of the reference.

Issues: 1. Whether the wage scale fixed by the Tribunal is too heavy for the Company to bear? 2. Whether the wage scale fixed by the Tribunal is unfavourable to the Company vis-a-vis two other concerns in Delhi region? 3. Whether the dearness allowance should be on a sliding scale? 4. Whether the directions given by the Tribunal in the matter of adjustments are proper and desirable? 5. Whether the Tribunal's direction that interim relief will remain unaffected is justified? 6. Whether the Tribunal's directions as regards sickness leave offend the provisions of Delhi Shops and Establishments Act, 1954? 7. Whether the Tribunal's direction that the practice of insistence on previous application for the purpose of casual leave should be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and that upto 3 days no medical certificate should be asked for is justified? 8. Whether the scheme of gratuity as framed by the Tribunal is unduly favourable to the workmen or that it places any undue strain on the Company's financial resources? 9. What should be the retirement age? 10. From which date should the reliefs given by the Tribunal become effective?

Ratio Decidendi: 1. The fixation of wage structure is among the most difficult tasks that industrial adjudication has to tackle. 2. In trying to keep true to the two points of social philosophy and economic necessities which vie for consideration, industrial adjudication has set for itself certain standards in the matter of wage fixation. 3. At the bottom of the ladder, there is the minimum basic wage which the employer of any industrial labour must pay in order to be allowed to continue an industry. 4. Above this is the fair wage which may roughly be said to approximate to the need based minimum, in the sense of a wage which is "adequate to cover the normal needs of the average employee regarded as a human being in a civilised society". 5. Above the fair wage is the "living wage" - a wage "which will maintain the workmen in the highest state of industrial efficiency, which will enable him to provide his family with all the material things which are needed for their health and physical well-being enough to enable him to qualify to discharge his duties as a citizen. 6. While industrial adjudication will be happy to fix a wage structure which would give the workmen generally a living wage economic considerations make that only dream for the future. 7. That is why the industrial tribunals in this country generally confine their horizon to the target of fixing a fair wage. 8. But there again, the economic factors have to be carefully considered. 9. For these reasons, this Court has repeatedly emphasised the need of considering the problem on an industry-cum-region basis, and of giving careful consideration to the ability of the industry to pay. 10. The wage scale fixed by the Tribunal is not too heavy for the Company to bear. 11. The wage scale fixed by the Tribunal is not unfavourable to the Company vis-a-vis two other concerns in Delhi region. 12. The dearness allowance should be on a sliding scale and provide for an increase on rise in the cost of living and a decrease on a fall in the cost of living. 13. The directions given by the Tribunal in the matter of adjustments are proper and desirable. 14. The Tribunal's direction that interim relief will remain unaffected is set aside and direction is given that adjustments should be made in terms of the said interim arrangement. 15. The Tribunal's directions as regards sickness leave offend the provisions of Delhi Shops and Establishments Act, 1954. 16. The Tribunal's direction that the practice of insistence on previous application for the purpose of casual leave should be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and that upto 3 days no medical certificate should be asked for is set aside. 17. The scheme of gratuity as framed by the Tribunal is not unduly favourable to the workmen or that it places any undue strain on the Company's financial resources. 18. The retirement age is fixed at 58 years, subject to the proviso that it will be open to the Company to continue in its employment a workman who has passed that age. 19. The Tribunal's direction that the reliefs given by it would become effective from the date of the reference is confirmed.

Final Decision: The Court allowed both the appeals in part by modifying the Tribunal's award as regards dearness allowance, leave rules and retirement age and also as regards the adjustment of the interim relief as mentioned above. In all other matters in appeal before the Court the award was confirmed. The modifications made as regards dearness allowance were to take effect from April 1, 1959. The modifications as regards leave rules and as regards retirement age were to take effect from the date of the judgment. In both the appeals the parties were to bear their own costs.