1962 Supreme(SC) 153

SUPREME COURT OF INDIA
A.K. SARKAR, K. SUBBA RAO AND J.R. MUDHOLKAR, JJ.
Workmen of Western India Match Co. Ltd., Appellants
Versus
Western India Match Co. Ltd., Respondent.
Civil Appeal No. 429 of 1961.
Advocates appeared
Mr. N. C. Chatterjee, Senior Advocate (M/s. A. N. Sinha and Dipak Datta Choudhri, Advocates, with him), for Appellants; Mr. C. K. Daphtary, Solicitor-General of India and Mr. B. Sen, Senior Advocate (Mr. B. N. Ghosh, Advocate, with them), for Respondent.

Employers are not mandated to provide uniform pay or dearness allowance across different establishments if work nature and recruitment terms differ. However, a rise in the cost of living constitutes a change in circumstances justifying the revision of dearness allowance awards.

Headnote:(A) Industrial Disputes Act, 1947 - Section 19(2) - Settlement - Termination - Notice - Jurisdiction of Industrial Tribunal - A settlement remains binding for the agreed period or six months, and continues until terminated by two months' written notice. However, if the employer agrees to refer the dispute to the Tribunal in a subsequent memorandum or if the presentation of a charter of demands can be construed as notice, the Tribunal possesses jurisdiction to adjudicate the matter. (Para 12)

(B) Industrial Law - Dearness Allowance - Parity between different establishments - Employees of a factory cannot claim parity in dearness allowance with employees of a sales office of the same employer if the nature of work, recruitment terms, and industry categories (e.g., engineering versus mercantile) differ. There is no legal compulsion for employers to offer uniform terms of employment across different establishments where considerations such as the value of work, ability to pay, and availability of labor vary. (Paras 16-21)

(C) Industrial Adjudication - Revision of Award - Change in circumstances - While an award is not ordinarily revised without a change in circumstances, a rise in the cost of living constitutes a sufficient change to justify the revision of dearness allowance, as the primary object of such allowance is to neutralize the rise in the cost of living. (Para 26)

(D) Constitution of India - Article 136 - Scope of interference - Discretionary jurisdiction under Article 136 is exercised only in cases of violation of principles of natural justice, substantial and grave injustice, or where an important principle of industrial law requires elucidation. A Tribunal's finding of fact regarding the reasonableness of a revised pay scale offer does not warrant interference. (Paras 22, 27)

Facts of the case:
A union representing factory employees sought a revision of pay scales and dearness allowance, arguing that the current rates were unfair compared to those provided to employees at the employer's sales office. The employer raised a preliminary objection that the Tribunal lacked jurisdiction because no formal notice to terminate a previous settlement had been given under Section 19(2) of the Industrial Disputes Act, 1947. The Tribunal overruled the objection, rejected the claim for parity in dearness allowance with the sales office, but revised the pay scales based on a counter-offer made by the employer during conciliation proceedings.

Findings of Court:
The Court held that the Tribunal had jurisdiction as the employer had consented to the reference in a memorandum of settlement. It found that factory employees were not entitled to the same dearness allowance as sales office employees due to differences in the nature of their work and recruitment terms. However, the Court found that the dearness allowance should be revised based on the employer's own counter-offer, as the rise in the cost of living justified a revision and the employer's offer indicated both the necessity and the ability to pay.

Issues: Whether the absence of a formal termination notice under Section 19(2) of the Industrial Disputes Act barred the Tribunal's jurisdiction; whether employees of a factory are entitled to parity in dearness allowance with employees of a sales office of the same employer; and whether a rise in the cost of living justifies the revision of a previous award on dearness allowance.

Ratio Decidendi: Employers are not required to provide uniform terms of employment across different establishments if the nature of work and recruitment conditions differ. A rise in the cost of living is a notorious fact that constitutes a change in circumstances, justifying the revision of dearness allowance to fulfill its purpose of neutralizing inflation.

Result: Appeal partly allowed.