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SUPREME COURT OF INDIA
14th November, 1963
P.B. GAJENDRAGADKAR, K.N. WANCHOO AND K.C. DAS GUPTA, JJ.
1. Greaves Cotton and Co. Ltd. (In C. As. Nos. 272 and 273 of 1962) 2. Greaves Cotton and Crompion Parkinson Private Ltd. (In C. As. Nos. 274 and 275 of 1962) 3. Kenyon Greaves Private Ltd. (In C. As. Nos. 276 and 277 of 1962) 4. Ruston and Hornsby (India) Private Ltd. (In C. As. Nos. 278 to 280 of 1962), Appellants
Versus
Workmen employed by the Appellants, represented by the Greaves Cotton and Allied Companies Employees Union (In all the Appeals), Respondents.
Civil Appeals Nos. 272 to 280 of 1962.
Advocates appeared
Mr. S. V. Gupte, Additional Solicitor-General of India. (Mr. N. V. Phadke, Advocate and M/s. J. B. Dadachanji, O. C. Mathur and Ravinder Narain, Advocates of M/s. J. B. Dadachanji and Co., with him), for Appellants (In all the Appeals); Mr. M. C. Setalvad, Senior Advocate, (M/s. K. T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma Advocates, with him), for Respondents (In C. A. No. 272 of 1962); M/s. K. T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma, Advocates, for Respondents (In C. As. Nos. 273 to 280 of 1962).
INDUSTRIAL DISPUTE - WAGES, DEARNESS ALLOWANCE, GRATUITY - Fixation of wage scales and dearness allowance for clerical and subordinate staff - Industry-cum-region formula - Application - Fixation of wage scales and dearness allowance for factory-workmen - Comparison with wages prevalent in comparable concerns - Adjustment of wages - Retrospective effect of award - Gratuity - Maximum limit and deduction for misconduct.
Fact of the Case:
Four companies, Greaves Cotton and Co., Greaves Cotton and Crompton Parkinson Private Limited, Kenyon Greaves Private Limited, and Ruston and Hornsby (India) Private Limited, faced disputes with their workmen regarding wages, dearness allowance, and gratuity. The disputes were referred to the Industrial Tribunal for adjudication. The tribunal revised the wages and dearness allowance for clerical and subordinate staff and factory-workmen, provided adjustments, and ordered the award to be effective from April 1, 1959. The companies appealed the awards, challenging the application of the industry-cum-region formula, the fixation of wage scales and dearness allowance, the adjustments, the retrospective effect of the award, and the gratuity scheme.
Finding of the Court:
1. The tribunal correctly applied the industry-cum-region formula for fixing wage scales and dearness allowance for clerical and subordinate staff, considering the region's financial stability and the need to upgrade emoluments. The tribunal made appropriate comparisons with wages prevalent in comparable concerns and pitched the wage scales accordingly. 2. The tribunal erred in fixing wage scales for factory-workmen without properly considering wages prevalent in comparable concerns. The tribunal failed to make a meaningful comparison and overlooked the wages for various categories of factory-workmen in comparable concerns. 3. The tribunal's decision to grant adjustments in wages was justified considering the low incremental scales prevalent in the appellants' concerns compared to comparable concerns. The adjustments were intended to address the disparity in increments and the overall low pay scales. 4. The tribunal's order making the award effective from April 1, 1959, was not retrospective in nature as it was practically from the date of the first reference in the case of the main company. 5. The tribunal's provision for a maximum gratuity of 20 months' wages and the deduction of gratuity only to the extent of financial loss caused by misconduct were in line with prevailing practices in the region and were not unreasonable.
Issues: 1. Whether the tribunal correctly applied the industry-cum-region formula for fixing wage scales and dearness allowance for clerical and subordinate staff? 2. Whether the tribunal erred in fixing wage scales and dearness allowance for factory-workmen without properly considering wages prevalent in comparable concerns? 3. Whether the tribunal's decision to grant adjustments in wages was justified? 4. Whether the tribunal's order making the award effective from April 1, 1959, was retrospective in nature? 5. Whether the tribunal's provision for a maximum gratuity of 20 months' wages and the deduction of gratuity only to the extent of financial loss caused by misconduct were reasonable?
Ratio Decidendi: 1. The industry-cum-region formula for fixing wage scales and dearness allowance considers both the industry and the region in which the concerned companies operate. The tribunal correctly emphasized the region aspect in the present case due to the varying nature of the companies' industries and the fact that Greaves Cotton and Co. controlled the other three companies. The tribunal made appropriate comparisons with wages prevalent in comparable concerns and pitched the wage scales accordingly. 2. The tribunal erred in fixing wage scales for factory-workmen without properly considering wages prevalent in comparable concerns. The tribunal failed to make a meaningful comparison and overlooked the wages for various categories of factory-workmen in comparable concerns. This aspect of the award was set aside, and the matter was remanded to the tribunal for reconsideration. 3. The tribunal's decision to grant adjustments in wages was justified considering the low incremental scales prevalent in the appellants' concerns compared to comparable concerns. The adjustments were intended to address the disparity in increments and the overall low pay scales. 4. The tribunal's order making the award effective from April 1, 1959, was not retrospective in nature as it was practically from the date of the first reference in the case of the main company. 5. The tribunal's provision for a maximum gratuity of 20 months' wages and the deduction of gratuity only to the extent of financial loss caused by misconduct were in line with prevailing practices in the region and were not unreasonable.
Final Decision: The appeals were dismissed insofar as retrospective effect, adjustments, and fixation of wages and dearness allowances with respect to clerical and subordinate staff were concerned. The appeal with respect to factory-workmen was allowed, and the cases were remanded to the tribunal for fixing the wage structure, including basic wage and dearness allowance, and for granting adjustments in light of the court's observations. The new award was to come into force from April 1, 1959. The appeals with respect to gratuity were dismissed. Parties were ordered to bear their own costs.
Judgment
WANCHOO, J.: These nine appeals by special leave arise out of the awards of the Industrial Tribunal. Bombay and will be dealt with together. There were disputes between the four appellants-companies and the respondents their workmen, which were referred for adjudication to the Industrial Tribunal by nine reference orders on various dates between April to December 1959. The main dispute which gave rise to the references was with respect to wages, dearness allowance and gratuity. The references included other items also but we are not concerned in the present appeals with those items. Of the four companies who are the appellants before us, Greaves Cotton and Co. is the first company and its main activity is to invest money in manufacturing concerns. The second company is Greaves Cotton and Crompton Parkinson Private Limited and its main business is distribution of the products of a manufacturing concern known as Crompton Parkinson (Works) India Limited and service and repair to the said products at its workshop. The third company is Kenyon Greaves Private Limited and its main business is to manufacture high grade interestranded ropes for the textile industry. The last company is Ruston and Horns by (India) Private Limited and its main business is to manufacture oil engines and pumps. The last three companies are controlled by the first company, namely Greaves Cotton and Co, in one way or the other and that is how the main dispute relating to wages and dearness allowance was dealt with together by the tribunal. There were two references each with respect to the first three companies and three references with respect to Ruston and Hornsby Private Limited; and that is how there are nine appeals before us. There were nine awards, though the main award dealing with the main dispute relating to wages and dearness allowance was common.
2. It appears that wages and dearness allownce prevalent in the four companies had been continuing since 1950 when the last award was made between the parties. It may also be stated that there was no serious dispute before the tribunal as to the financial capacity of the companies and further, as the first company controls the other three companies, the wages and dearness allowance are the same so far as the clerical and subordinate staff are concerned. The same appears to be the case with respect to factory-workmen
3. The tribunal dealt with clerical and subordinate staff separately from the factory-workmen. So far as the clerical and subordinate staff are concerned, the tribunal, after a comparison of wages and dearness allowance prevalent in the four companies with wages and dearness allowance prevalent in comparable concerns revised them. Further it provided how the clerical and subordinate staff would be fitted in the new scales after making certain adjustments and in that connection it gave one to three extra increments depending upon length of service between 1950 to 1959. Finally it ordered that the award would have effect from April 1, 1959, which was a week before the first reference was made with respect to the first company. The tribunal then dealt with the case of the factory-workmen and prescribed certain rates of wages. Further it gave the same dearness allowance to the factory-workmen as to the clerical and subordinate staff and directed adjustments also on the same basis. Finally it considered the question of gratuity and the main provision in that respect was that the maximum gratuity allowable would be upto 20 months and a provision was also made to the effect that if an employee was dismissed or discharged for misconduct which caused financial loss to the employer, gratuity to the extent of that loss only will not be paid to the employee concerned.
4. The main attack of the appellants is on the award as regards wages and dearness allowance. It is urged that the industry-cum region formula, which is the basis for fixation of wages and dearness allowance has not been properly appli
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