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TMI Blog1966 (10) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... to time by the President of India and its accounts are audited by the auditors appointed by the Central Government on the advice of the Comptroller and Auditor General of India. Service conditions of the workmen and other matters are subject to the approval of the President of India. The annual report of the working of the Company and its affairs along with the Audit Report has to be placed before the Parliament. There are no shareholders other than the Central Government or its nominees, with the result that the dividends declared by the Company entirely go to the coffers of the State, but the profits are ploughed back into the industry or kept as reserve for future requirements. In short, though the Company is a limited one and, therefore, has a distinct corporate existence, it is in effect financed entirely from the funds of the Central Government. 3. The Company employs about 2,000 workmen. A dispute arose between the workmen of the Company and the management thereof and the workmen presented a charter of fifteen demands to the Company. The Government of Maharashtra referred the said dispute to the Industrial Tribunal, Bombay, for adjudication under s. 10(1)(d) of the Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate places. In the result, pursuant to the said directions, the Tribunal had worked out the figures in detail and given its findings on the various demands made by the workmen. 6. At the outset it may usefully be reiterated that this Court is not a regular court of appeal against orders of tribunals. The scope of its power under Art. 136 of the Constitution vis-a-vis awards of tribunals is stated in Bengal Chemical and Pharmaceutical Works, Ltd., Calcutta v. Their Workmen [1959] Supp. 2 S.C.R. 136. Therein this Court observed : "Article 136 of the Constitution does not confer a right of appeal to any party from the decision of any tribunal, but it confers a discretionary power on the Supreme Court to grant special leave to appeal from the order of any tribunal in the territory of India. It is implicit in the discretionary reserve power that it cannot be exhaustively defined. It cannot obviously be so construed as to confer a right to a party where he has none under the law. The Industrial Disputes Act is intended to be a self-contained one and it seeks to achieve social justice on the basis of collective bargaining, conciliation and arbitration. Awards are given on ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adalal, learned counsel for the Company, may be put thus : The pattern of wage fixation in the case of Government companies born in the public sector should necessarily be different from that of companies born in the private sector. Elaborating the argument, he relied upon the following circumstances to sustain the said distinction : (i) nexus with the Central Government; (ii) need to keep parity or at least no disparity between different public sector industries in different parts of the country; (iii) the concepts of capacity profits and surplus have a new connotation which is different from that they bear in their application to industries in the private sector; (iv) pay scales are the same in all the industries throughout India born in the public sector; (v) amenities and fringe benefits in public sector industries are incomparably greater than in the private sector industries; (vi) the employees of the public sector industries have greater security than those of the private sector industries; (vii) the fact that the Government, instead of running the business departmentally formed a company for the same purpose cannot possibly make any difference in the wage structures; and (v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudication that further elaboration is unnecessary. In this context, a reference to the decisions in Messrs. Crown Aluminium Works, v. Their Workmen: (1958)ILLJ1SC , Express Newspapers (Private) Ltd., v. The Union of India (UOI) (UOI): (1961)ILLJ339SC , French Motor Car Co. Ltd. v. Workmen () and The Hindustan Times Ltd., New Delhi v. Their Workmen (1963)ILLJ108SC will be useful. There is no, and there cannot be any, dispute on the laudable aims of industrial policy of our country in the matter of wage fixation. Das Gupta, J., in The Hindustan Times Ltd., New Delhi v. Their Workmen (1963)ILLJ108SC : "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. 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. 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 huma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay packet and if he is given reasonable wages, it is expected that a satisfied worker will contribute to the growth of the industry and ultimately the prosperity of the country. From his standpoint, which is a paramount consideration, so long as the capacity of the industry is assured, the character of the employer is irrelevant. Now, let us look at the problem from the standpoint of the employer. It is said that a company born in the private sector works with a profit motive and exploits the workmen for its private ends, whereas a company born in the public sector, though it is expected to make profits, really contributes to the wealth of the whole country. This argument poses the question of the comparative merits of different ideologies such as price economy, mixed economy, socialism etc. We do not propose to go into these complicated economic problems; but it cannot be posited that necessarily and inevitably companies born in the private sector only care for profits by exploiting workers and those born in the public sector always work for public good. Different countries following different ideologies have reached prosperity or are on the way of prosperity. It cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is now sought to be made on the basis of the character of the employer. The Legislatures in India even before the coming into force of the Constitution passed Acts regulating industries such as the Industrial Disputes Act, 1938, Industrial Employment (Standing Orders) Act, 1946 and Industrial Disputes Act, 1947. In these Acts no distinction is made between industries in public and private sectors vis-a-vis the service conditions of the labour. Under s. 2(g) of the Industrial Disputes Act, 'employer' means in relation to an industry carried on by or under the authority of any department of the Central Government or a State Government the authority prescribed in this behalf, the head of the department, and under clause(j) 'industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicrafts etc. S. 2 clause(s) defines workman to mean any person employed in any industry to do ....... work for hire or reward. 14. A combined reading of these provisions indicates - indeed it is not disputed - that the Act regulates the relationship of employer and employee irrespective of the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Boards should go into the details in respect of each industry on the basis of the recommendations contained in the report of the Committee on Fair Wages. These recommendations of the Fair Wages Committee should also be made applicable to employees in the public sector." 17. Another recommendation was that the study groups may assemble materials for rationalisation of the management in industries, including those in the public sector. Pointing out the difference between the two sectors, the Planning Commission observed : "Public undertakings differ in an important respect from private undertakings. The 'profit' motive and the exploitation of workers for private gain have no significance in the State owned enterprises. The undertakings have no doubt to show the same, if not greater efficiency of working as private owned undertakings. They have also to show profits. But the nature of these profits is different. The profits which these undertakings make are not profits intended for any individual or group of individuals but are extra wealth for the whole country." 18. In the First Five Year Plan the Planning Commission laid down the policy in respect of differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of public employer to avoid the responsibility of an employer on the ground that he is not working for profit has to be discouraged... In the last analysis employees in the public sector should, on the whole, be at least on par with their counterparts in private employment and should feel a legitimate pride in what they produce and in their position as employees in the public sector." 21. So too, the report on the Third Five Year Plan, though it brought the distinction between the two sectors, it again stated that similar scales of pay should be given to employees in both the sectors. The relevant passage thereof runs thus : "Increased profits, which in the private sector would create inequalities, (and possible conspicuous and wasteful consumption), in the public sector can be directly used for capital accumulation. By efficient conduct of enterprises and following a rational and economically sound price policy for its products and services the public sector undertakings ought to secure adequate return on capital employed and contribute their full share to the increase in the portion of national resources devoted to investment." 22. This passage only says that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the nature and responsibilities of staffs differ from undertaking to undertaking depending upon the size, line of production etc. and the pay scales of posts also varied from undertaking to undertaking. It also pointed out that while uniformity might be desirable, a measure of flexibility and autonomy was necessarily to be allowed for varying nature and activities of the undertakings and, therefore, uniform classification of staff whose nature and responsibility varied from undertaking to undertaking was not possible. It will be seen that though the Estimates Committee suggested a common pattern of wage structure for all public undertakings, the Government, for the reasons given, rejected the said proposals. 26. The opinions of the experts on the subject who had made a special study thereof were relied upon. We are not in a position to evaluate the said opinions cited at the Bar, for the learned counsel on both sides did not agree on the credentials of the experts. In the book on "Cross Purposes in Wage Policy" by R.G. Hawtrey, the following passage appears in Chapter VII : "When an industry producing a freely marketable produce, like coal, is nationali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lised industry no profits go to private shareholders. Any surplus, after setting aside funds needed for the development of the industry, is used for the benefit of the whole community. Surpluses are not used to give special advantages to the workers in nationalised industries. There is no reason why such workers should be better off in some industries than in others merely because their industries have been nationalised. On the other hand, they should not be worse off either. Their wages and conditions should be determined as in other industries by the nature of the work they do, and should be related to the training and skill required. Thus there should be similarity between the wages and conditions of employment of workers in nationalised and private industries. Labour can move freely from one to the other, and workers in nationalised industries have no justification for claiming preferential treatment. The State as the employer of workers in nationalised industries should be a good employer, but its labour conditions will be very much like those established by good employers in private industry." 31. This passage gives the modern trend of opinion in respect of wage structu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harma, the Financial Advisor, informed Shri Sharma, who was a U.D.C., Internal Audit Section of the Company, that the Pay Commission recommendations were not applicable to the employees of the Company. Indeed, the Pay Commission Report does not deal at all with Government undertakings in the public sector. 37. Nor can we appreciate how there would be any repercussions on other public sector undertakings situated in different parts of the country because of the said differential in the wage structure of the Government undertakings in the public sector. The labour who have by now accepted the 'region-cum-industry' principle, will not raise any dispute if their wages are similar to those obtaining in comparable concerns in the region. On the other hand, in a vast country like India, the labour cannot appreciate the uniform structure of wages on an All-India basis, if they find that in the region where they are working, employees similarly situated are getting higher wages than theirs. So too, in a particular region, the pay structure of a Government industry may happen to be better than that obtaining in comparable concerns in the same locality. This will lead to industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om April 1, 1965, the dearness allowance awarded under Part I of the Award be varied as follows :- "For a variation (rise or fall) of every 5 points in the Poona Index over the base 1961 there should be a variation of ₹ 3.50 per month in the dearness allowance for employees drawing basic wage/salary up to ₹ 75. ...." 41. For employees drawing basic wages/salary above ₹ 75 the variation will be, instead of ₹ 3.50, as follows : 42. The effect of this award was that dearness allowance was linked both with wages as well as with the cost of living index for Poona. To put it differently, the Tribunal gave dearness allowance varying with different slabs of wages and linked the same with the said Index. 43. Learned counsel for the Company raised before us two points : (1) The Tribunal, having merged part of the dearness allowance with the basic wages and having linked dearness allowance both with wages and with the Index for Poona, in effect gave dearness allowance on dearness allowance. To put it in other words, it was argued : by the said merger the wages were raised with the result, that by the operation of the linking with the Index for Poona, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total packet of wages and dearness allowance compared favourably with those in similar concerns. It has introduced the slab system so that in the case of employees falling in the higher slabs, the rise in prices is adequately neutralised. The Tribunal did not commit any error of principle. 46. Nor can we accede to the argument that there was a double provision for house rent. The fact that in the Index for Poona one of the components is house rent only means that the rise in the house rent was also taken into consideration in arriving at the Index. Unless it is established that the house rent was a major item which went in inflating the price index, it cannot be said that the Tribunal by awarding house rent allowance has given a double advantage to the employees in question. It has not been established before us that the Index for Poona was inflated because of its rent component. Indeed, this argument does not appear to have been raised before the Tribunal. We cannot, therefore, accept this argument. 47. In the result, the contentions raised in respect of dearness allowance are rejected. 48. The next question relates to demand 6-A i.e., demand for gratuity. The Tribunal dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are considered necessary for an "orderly and humane elimination" from industry of superannuated or disabled employees who but for such retiring benefits would continue in employment even though they function inefficiently." 51. Gajendragadkar, J. in Indian Hume Pipe Co. v. Its Workmen [1965] 2 L.L.J. 830 also gave a workable expression of gratuity. He stated : "Gratuity is a kind of retirement benefit like the provident fund or pension... Gratuity paid to workmen is intended to help them after retirement, whether the retirement is the result of the rules of superannuation or physical disability. The general principle underlying such gratuity schemes is that by their length of service workmen are entitled to claim a certain amount as a retiral benefit." 52. That apart, from the standpoint of the employee the said two schemes give him something to fall back upon after his retirement. It is commonplace that industrial adjudication under the present circumstances is not able to provide the labour a living wage. At the best, they get only a little more than the necessities of life. If the industry is a flourishing one, we do not see any reason why the labour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere however the benefit has no connection with the items of expenditure on which the fair wage is calculated it cannot naturally be taken into account." 55. To state it differently, only such of the items which go directly to reduce the expenditure that would otherwise go into the family budget are relevant in fixing fair wages. The Tribunal has taken all the permissible fringe benefits in fixing the wage scales and dearness allowances. It cannot therefore be said that the Tribunal went wrong in omitting any amenities in fixing the wages. 56. The learned counsel took objection to the part of the award where the Tribunal gave retrospective operation to it from 1st January, 1962. The reference of the dispute to the Tribunal was made on 11-8-1962. The first award was made on 8th October 1963. A Tribunal ordinarily makes its award operative from the date of reference; but, in exceptional circumstances it gives retroactive operation to some of its proposals. It will be seen from the record that the original demand emanated as early as 6-2-1957, but because of some technical difficulties, namely, whether the Central Government Authorities or the State Government Authorities were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wage structure to reach the perfection point. If no principle is violated, this Court will not interfere on the ground that it would have fixed the wages at a lower level than the Tribunal did. We do not find any such abnormal variation of wages from those obtaining in other companies. We do not, therefore, think that this is such an exceptional case as to call for a departure from our usual practice of not interfering with the award of the Tribunal in the fixation of wage structure. 59. Now, coming to the Cross Appeal, the first question is, what is the status of a foreman in the industry in question. The definition of 'workman' in s. 2(s) of the Industrial Disputes Act excludes therefrom any person who is employed mainly in a managerial or administrative capacity or who being employed in a supervisory capacity, draws wages exceeding ₹ 500 per mensem. It was contended that a foreman was a supervisor within the meaning of the said definition and as, in the instant case, he was drawing less than ₹ 500 per mensem, he would be a workman within the meaning of the definition. The Tribunal held that he was not a workman on the ground that his work was predominantly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retirement age is fixed at 60." 63. But it is said that the scope of the judgment was confined only to the Bombay region and it should not be extended to the Poona region. A perusal of the Tribunal's Award shows that it followed the decision given by it in the dispute of Shaw Wallace & Co. Ltd. (1964)IILLJ664SC which was reversed by this Court. That apart, the Tribunal also recognised that the retirement age should be raised from 55 years to 58 years and that even thereafter discretion should be given to the employers to continue the employees or not to do so. This indicates that in the view of the Tribunal, the retirement age in the case of the employees of the industry in question could reasonably be raised beyond 58 years. We do not think it is proper to give a discretion to the Company to raise the age of retirement or not to do so, for, the vesting of such uncontrolled discretion in the employer might lead to manipulation and victimisation. We would, therefore, following the trend of judicial opinion, hold that the retirement age of the employees of the Company should be raised to 60 years. 64. On behalf of the workmen it was contended that the linkage should be do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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