1. Industrial dispute regarding wage standardization and the designation of workmen in a textile mill under the Industrial Disputes Act. (Para 1 )
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1966 Supreme(SC) 79
SUPREME COURT OF INDIA
P.B. GAJENDRAGADKAR, C.J.I., K. SUBBA RAO, K.N. WANCHOO, J.C. SHAH AND N. RAJAGOPALA AYYANGAR, JJ.
Birla Cotton Spinning and Weaving Mills, Ltd., Appellant
Versus
The Workmen and others, Respondents.
Civil Appeal No. 104 of 1962.
Advocates appeared
M/s. G. B. Pai and I. N. Shroff, Advocates, for Appellant: M/s. M. K. Ramamurthi, R. K. Garg, S. C. Agarwala and D. P. Singh, Advocates of M/s. Ramamurthy and Co., for Respondent No. 1.
Important Points
Standardization schemes aim for wage uniformity, requiring the reduction of higher wages. While tribunals may protect individual workmen's higher wages as "personal pay" subject to specific conditions, they cannot protect the wage level of a post generally.
Subject
Labour Law - Industrial Disputes
Act Referred
Headnote
(A) Industrial Disputes Act, 1947 - Sections 2(p) and 19(2) - Competence of reference - An agreement that does not amount to a settlement within the meaning of Section 2(p) does not prevent a subsequent reference from being competent, even if a previous award is still in force. (Para 5)
(B) Wage Standardization - The fundamental principle of a standardization scheme is to ensure uniformity in wages for the same work; this involves raising low wages and reducing high wages to fit the standardized level. (Paras 11, 15)
(C) Protection of Individual Wages - While a tribunal cannot protect "wages" generally (which would protect the post), it may protect "individual workmen" who receive higher wages at the time of the scheme's introduction by treating the excess as "personal pay," provided: (i) no further raises are given by management, (ii) the excess is absorbed in future increments, and (iii) successors are not entitled to the same higher pay. (Paras 14, 15)
(D) Tribunal's Jurisdiction - A tribunal cannot delegate the resolution of a referred dispute to a joint committee of the parties, as it must resolve the dispute itself. (Para 10)
Facts of the case:
An industrial dispute was referred to a tribunal concerning the increase and standardization of wages for certain categories of workmen, including mistries, line jobbers, and fancy jobbers. The tribunal ordered the adoption of a regional standardization scheme and directed that existing wages higher than the standardized rates should not be lowered. The appellant challenged the competence of the reference, the designation of certain workmen, the application of the regional scheme without evidence, and the protection of higher wages.
Findings of Court:
The court found the reference competent and upheld the redesignation of assistant fancy jobbers as fancy jobbers. However, it held that the tribunal acted unfairly by applying a regional standardization scheme without allowing evidence on local differences. It further ruled that the tribunal erred in delegating the resolution of anomalies to a joint committee and in protecting wages generally rather than protecting individuals.
Issues: Whether a previous award and agreement barred the reference; whether certain workmen were rightly designated; whether a regional standardization scheme could be applied without considering local conditions; whether a tribunal could delegate its duty to a joint committee; and whether wages exceeding the standardized rate could be protected.
Ratio Decidendi: Standardization necessitates uniformity; therefore, protecting a wage level generally contradicts the purpose of such schemes. Protection can only be granted to individuals as personal pay to avoid creating permanently higher-paid posts. Additionally, a tribunal must exercise its adjudicatory function independently rather than referring the dispute back to the parties via a committee.
Result: Appeal allowed.
(B) Wage Standardization - The fundamental principle of a standardization scheme is to ensure uniformity in wages for the same work; this involves raising low wages and reducing high wages to fit the standardized level. (Paras 11, 15)
(C) Protection of Individual Wages - While a tribunal cannot protect "wages" generally (which would protect the post), it may protect "individual workmen" who receive higher wages at the time of the scheme's introduction by treating the excess as "personal pay," provided: (i) no further raises are given by management, (ii) the excess is absorbed in future increments, and (iii) successors are not entitled to the same higher pay. (Paras 14, 15)
(D) Tribunal's Jurisdiction - A tribunal cannot delegate the resolution of a referred dispute to a joint committee of the parties, as it must resolve the dispute itself. (Para 10)
Facts of the case:
An industrial dispute was referred to a tribunal concerning the increase and standardization of wages for certain categories of workmen, including mistries, line jobbers, and fancy jobbers. The tribunal ordered the adoption of a regional standardization scheme and directed that existing wages higher than the standardized rates should not be lowered. The appellant challenged the competence of the reference, the designation of certain workmen, the application of the regional scheme without evidence, and the protection of higher wages.
Findings of Court:
The court found the reference competent and upheld the redesignation of assistant fancy jobbers as fancy jobbers. However, it held that the tribunal acted unfairly by applying a regional standardization scheme without allowing evidence on local differences. It further ruled that the tribunal erred in delegating the resolution of anomalies to a joint committee and in protecting wages generally rather than protecting individuals.
Issues: Whether a previous award and agreement barred the reference; whether certain workmen were rightly designated; whether a regional standardization scheme could be applied without considering local conditions; whether a tribunal could delegate its duty to a joint committee; and whether wages exceeding the standardized rate could be protected.
Ratio Decidendi: Standardization necessitates uniformity; therefore, protecting a wage level generally contradicts the purpose of such schemes. Protection can only be granted to individuals as personal pay to avoid creating permanently higher-paid posts. Additionally, a tribunal must exercise its adjudicatory function independently rather than referring the dispute back to the parties via a committee.
Result: Appeal allowed.
Legal Category Hierarchy
Advocates:
D.P.Singh, G.B.PAI, I.M.SHROFF, M.K.RAMAMURTHY, R.K.GARG, S.C.AGRAWAL
D.P.Singh, G.B.PAI, I.M.SHROFF, M.K.RAMAMURTHY, R.K.GARG, S.C.AGRAWAL
Table of Contents
2. Dispute over reference competence due to prior awards, comparability of wages between mills, and the validity of applying a regional standardization scheme. (Para 2 , 4 )
3. Tribunal erred by applying a standardization scheme perfunctorily, refusing evidence on regional differences, and delegating its adjudicatory function to a joint committee. (Para 7 , 8 , 9 , 10 )
4. Standardization requires uniform wages; while individual wages may be protected as personal pay, general protection of higher wages contradicts the principle of standardization. (Para 11 , 14 , 15 )
5. Appeal allowed; award set aside in part; matter remanded to the tribunal for reconsideration of wage standardization and designations. (Para 16 )
6. Does a prior award or subsequent agreement necessarily render a new industrial reference incompetent?
Not necessarily. If an agreement does not amount to a settlement under the Industrial Disputes Act, or if the prior award does not legally bar the reference, the reference remains competent. (Para 5 )
7. Can a tribunal apply a standardization scheme from one region to another without considering regional differences?
No. A tribunal must consider evidence regarding differences in conditions between regions to determine if the scheme should be applied in its entirety or modified to suit local conditions. (Para 7 , 9 )
8. Can an industrial tribunal resolve a dispute by directing the parties to form a joint committee to investigate anomalies?
No. The tribunal must resolve the dispute itself rather than leaving a part of the dispute to be resolved by the parties, as this fails to fulfill the terms of reference. (Para 10 )
9. Can wages higher than those fixed in a standardization scheme be protected?
General protection of higher wages is against standardization principles. However, tribunals may protect individual workmen by treating the excess as personal pay, which does not transfer to successors upon vacancy. (Para 11 , 14 , 15 )
Judgement
WANCHOO, J.:- This appeal by special leave arises out of an industrial dispute between the Birla Cotton Spinning and Weaving Mills Limited (hereinafter called the Appellant) and its workmen. A large number of matters were referred for adjudication to the industrial tribunal but in the present appeal we are concerned with two, namely, (i) whether the wages require to be increased and standardised, and what directions are necessary in this respect, and (ii) whether any of the workmen doing the work of fancy jobbers should be designated and paid accordingly. The first point has however been confined to mistries and line jobbers only as the other operatives were covered by another award in another reference (No. ID 52 of 1957) between the same parties, which was decided earlier by this tribunal. That award came in appeal to this Court and the decision of this Court is reported in Management of Birla Cotton Spinning and Weaving Mills Ltd. v. Its Workmen , AIR 1961 SC 1179. This Court had set aside the earlier award and sent the case back to the tribunal to proceed in the manner indicated in that judgment. We are told that that matter has ended in a compromise between the parties. The claim of the workmen concerned in the present reference (namely, mistries and line-jobbers) was that their wages were low and not standardised and in spite of representations made to the appellant, nothing had been done in the matter. The workmen therefore claimed that the wages should be increased and standardised and incremental pay scales should be introduced so far as mistries and line jobbers were concerned. As to fancy jobbers, the workmen s claim was that they had been wrongly designated recently as assistant fancy jobbers, though they were doing the job of fancy jobbers. It was therefore contended that they should be designated as fancy jobbers and their pay also increased and standardised accordingly.
2. The appellant resisted the claim on : number of grounds. It was contended firstly that there was an earlier award in 1951 made by Shri Dulat, which was still in force and therefore the reference was incompetent. Next it was contended that there was no comparison between the Swatantra Bharat Mills and the Delhi Cloth Mills on the one hand and the appellant-mills on the other and therefore the wages prevalent in those mills could not be taken as a standard for fixing wages for the appellant s workmen. Thirdly, it was urged that incremental scales were provided nowhere in the textile industry and therefore this claim should be rejected. Fourthly, the workmen designated as assistant fancy jobbers had been so designated rightly and could not claim to be fancy jobbers. And lastly, it was urged that there was no case for applying the Bombay standardisation scheme to the appellant s workmen for conditions in Bombay and Delhi were in many respects different.
3. The tribunal rejected the contention that the Dulat award of 1951 had not been terminated and therefore the present reference was incompetent. The tribunal further held that though there were differences between the Swatantra Bharat Mills and the Delhi Cloth Mills on the one hand and the appellant on the other, both in the matter of the working of the mills and in the matter of their financial position, they were not of importance as there were bound to be differences between unit and unit of the same industry and thus the wages paid in those two mills were comparable. As to the claim for incremental scale of wages, the tribunal held that no incremental scale had been provided in any standardisation scheme relating to textile industry and rejected this claim. It further held that the workmen now designated as assistant fancy jobbers were really fancy jobbers and had been previously designated as such. Recently, however, they started to be called assistant fancy jobbers and therefore it was ordered that they should be designated as fancy jobbers. And lastly, the tribunal following its ear
