Skip to content


National Union of Commercial Employees and ors. Vs. Industrial Tribunal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Application No. 1003 of 1964
Judge
Reported in[1967(15)FLR351]; (1967)ILLJ643Bom
ActsConstitution of India - Articles 226 and 227
AppellantNational Union of Commercial Employees and ors.
Respondentindustrial Tribunal and ors.
Excerpt:
.....set aside and dispute remanded to tribunal. - - 9. we will first consider the basic wages and dearness allowance allowed to the four categories of employees under the terms of the award, and for purposes of comparison we will consider the total of the basic wage and dearness allowances at the commencement as well as the end of each wage-scale. it will be noticed that the starting pay inclusive of dearness allowance in the case of junior as well as senior clerks under the award is higher than the starting pay available to junior clerks of taraporewalla sons & co. they are that one of the terms of the scheme of gratuity runs counter to the decision of the supreme court mentioned above, that there is an ambiguity with regard to the term 'wages' in the part of the award relating to sick..........that basis was not disputed before us. 2. the award relates to three demands : (i) wage-scales and dearness allowance, (ii) scheme for payment of gratuity, and (iii) provision for sick leave with pay. 3. sri dudhia who appeared before us on behalf of the petitioner-union attacked the validity of the award in respect of the provisions made on all these demands. 4. turning first to the provisions of the award with regard to wage-scales and dearness allowance, the tribunal classified the workers into four categories : (i) senior clerks, (ii) junior clerks, (iii) watchmen and orderlies, and (iv) mazdoors, peons and packers. 5. wage-scales and dearness allowance have been fixed in the award for these categories and directions have been given been given for the fitment of the workers in the.....
Judgment:

Tarkunde, J.

1. This petition has been filed by the National Union of Commercial Employees for a writ or direction to set aside an award passed by the industrial tribunal, respondent 1 to this petition, in a dispute which was referred for its adjudication. The dispute was raised by the workmen who are employed in Bombay By three concerns, A.H. Wheeler & Co. (Private), Ltd., the Wheeler Distributors (Private), Ltd., and the Symonds Distributors (Private), Ltd., which are respondents 2 to 4 to; this petition. These concerns have their head offices in Allahabad and branch offices in Bombay. All the shareholders of the three concerns belong to a family consisting of two brothers, their wives and their sons. Respondent 2, A.H. Wheeler & Co., is an old concern which does business of booksellers and has a large number of stalls in various railway stations. Till 1962 all the thirty workmen who are interested in this dispute, and who are represented by the petitioner-union, were the employees of respondent 2, A.H. Wheeler & Co. In 1962, respondents 3 and 4 companies were formed and some of these thirty workers were transferred to those companies. It is common ground that the employees of the three concerns have similar working conditions. The impugned award of the industrial tribunal proceeds on the basis that the conditions of work of the employees of the three concerns should be the same. That basis was not disputed before us.

2. The award relates to three demands :

(i) wage-scales and dearness allowance,

(ii) scheme for payment of gratuity, and

(iii) provision for sick leave with pay.

3. Sri Dudhia who appeared before us on behalf of the petitioner-union attacked the validity of the award in respect of the provisions made on all these demands.

4. Turning first to the provisions of the award with regard to wage-scales and dearness allowance, the tribunal classified the workers into four categories :

(i) senior clerks,

(ii) junior clerks,

(iii) watchmen and orderlies, and

(iv) mazdoors, peons and packers.

5. Wage-scales and dearness allowance have been fixed in the award for these categories and directions have been given been given for the fitment of the workers in the wage-scales. These provisions were attacked by Sri Dudhia on the ground that they were the result of some misapprehension or miscalculation on the part of the tribunal being at complete variance with what the tribunal had expressly intended to do and what the tribunal thought it had done. In Para. 11 of the award the tribunal observed that the respondent-concerns, and particularly respondent 2 (A. H. Wheeler & Co.), 'have made enormously big profits during the last three years.' The petitioner-union had produced before the tribunal a tabular statement (Ex. U. 1) which contained information about the scale of wages, dearness allowance, provisions for sick leave and provisions for gratuity in four other concerns in Bombay, viz., Taraporewalla Sons & Co., Popular Book Depot, New Book Company and International Book House. The tribunal noted that the level of wages prevailing in these four concerns was more or less the same. The tribunal went further and gave a finding (in Para. 12 of the award) to this effect :

'I hold that the units of D.B. Taraporewalla Sons & Co., Popular Book Depot, Bombay, New Book Company (Private), Ltd., and International Book House are comparable with the office of these units in question, i.e., the respondent-concerns.'

6. The tribunal went on to observe that the respondent-companies had not been able to place on record the prevailing conditions in any other comparable concern in Bombay to indicate that different conditions of work prevailed in that concern. The tribunal then noted that the basic wages in the respondent-companies have been so fixed as to include a part of what might be regarded as dearness allowance. In this connexion, the tribunal decided that it was not necessary that wage-scales should be introduced in the respondent-concerns so that they should correspond with the wage-scales of the other four concerns mentioned above, but that the wage-scales and dearness allowance together should be so adjusted that the total wage-packet would be comparable to the wage-packet received by the workers of the other four concerns. The tribunal then dealt with an argument advanced on behalf of the respondent-companies that if the wage-scales and dearness allowance of their Bombay employees are raised, their employees in other centres are likely to make similar demands, with the result that the business of the respondent-companies would cease to be profitable. In this connexion, the tribunal observed that no material was placed before it from which it could be ascertained that similar demands would be made by the employee of other centres or that such demands would be accepted by the respondent companies. The tribunal, however, further observed that the burden which would be imposed upon the respondent-companies by his award.

'will not work out to a sum in excess of Rs. 10,000 in a year in aggregate if it was to be calculated in a reasonable manner.'

7. After these observations, the tribunal proceeded to lay down the wage-scales and dearness allowance for each of the four categories of employees mentioned above. After providing for wages-scales and dearness allowance, the tribunal stated in Para. 17 of the award :

'I have . . . fixed the wage-scales by which the total emoluments received by these workers would be at least the same as received by similar type of persons in other comparable concerns.'

8. The various statements made in the award, and particularly the last statement which we have quoted above, make it obediently clear that the total emoluments which tribunal intended to award to the aggrieved employees, and which the tribunal thought it had actually awarded, were 'at least the same' as the total emoluments received by corresponding categories of employees in the four concerns which were found by the tribunal to be comparable, viz., Taraporewalla Sons & Co., Popular Book Depot, New Book Company and International Book House. If the total emoluments allowed by the operative part of the award were the same as the total emoluments available to the employees of the four comparable concerns or even if they were not substantially lower, we would not have found it necessary to interfere with the award. It was brought out before us, however, that the emoluments which have been granted to the employees of the respondent-concerns, whether by way of wage-scales and dearness allowance, or by way of gratuity and sickness leave, are substantially lower than the emoluments received by the employees of the comparable concerns. That the emoluments granted by the award are substantially lower is established on the basis of the information found in the tabular statement, Ex. U. 1, which had been produced before the tribunal.

9. We will first consider the basic wages and dearness allowance allowed to the four categories of employees under the terms of the award, and for purposes of comparison we will consider the total of the basic wage and dearness allowances at the commencement as well as the end of each wage-scale. Under the terms of the award, in the case of mazdoors, peons and packers, the pay (basic wage and dearness allowance) at the commencement of the scale would be Rs. 80 per month and at the end of the scale Rs. 100 per month. In the case of similar categories of workers of Taraporewalla Sons & Co., the initial pay is Rs. 80 per month and the pay at the end of the scale is Rs. 125 per month. The same categories of workers of Popular Book Depot and New Book Company have pay-scales from Rs. 80 to Rs. 133 and Rs. 80 to Rs. 110, respectively. The corresponding pay-scale in International Book House is higher than in the New Book Company. Thus the upper limit of the pay-scale given under the award to mazdoors, peons and packers is substantially lower than the pay-scale in the four comparable concerns. A comparison of the upper limit of the pay-employees who had raised the dispute in the present case are old employees and they are directly affected by the upper limit of the pay-scale.

10. It appears that there are only two employees in the next higher category, that of watchmen and orderlies. Their pay-scale (with dearness allowance) is Rs. 90 to Rs. 110. Here also the upper limit is lower than what is available to similar categories of workers in Taraporewalla Sons & Co., Popular Book Depot and International Book House.

11. The pay-scales given in the award to junior and senior clerks can be compared with the pay-scales available to junior and senior clerks in Taraporewalla Sons & Co. and New Book Company. Comparison is difficult with the pay-scales of the clerical staff of Popular Book Depot and International Book House because the classification of the clerical staff in these concerns is somewhat complicated. Under the award, the pay-scale (inclusive of dearness allowance) of a junior clerk is Rs. 150 to Rs. 230 per month. In Taraporewalla Sons & Co. and New Book Company, the corresponding pay-scales are Rs. 125 to Rs. 274 and Rs. 125 to Rs. 250, respectively. In the case of senior clerks, the pay-scale (inclusive of dearness allowance) given under the award is Rs. 210 to Rs. 310. In the case of Taraporewalla Sons & Co. and new Book Company, the corresponding pay-scales are Rs. 180 to Rs. 360 and Rs. 118 to Rs. 330, respectively. It will be noticed that the starting pay inclusive of dearness allowance in the case of junior as well as senior clerks under the award is higher than the starting pay available to junior clerks of Taraporewalla Sons & Co. and New Book Company, but the pay at the end of the scale is substantially lower. The higher starting pay is of little avail to the employees represented by the petitioner-union as almost all of whom have been in service for many years. They are affected by the upper limit of the pay-scale which is substantially lower under the terms of the award.

12. The above differences are more impressive if it is borne in mind that the dearness allowance granted in the award is unconnected with the cost of living index. The dearness allowance allowed by Taraporewalla Sons & Co. is on the same scale as that paid to the employees of the Government of Maharashtra and this scale is liable to be increased with a rise in the cost of living index. The dearness allowance available to the employees of International Book House is directly variable with variations in the cost of living index.

13. An objection was taken before us by Sri Dudhia to the provisions made in the award for the fitment of the employees into the wage-scales. Since we have come to the conclusion that the award is required to be set aside and the dispute remanded for a further consideration of tribunal, we do not find it necessary to deal with that objection.

14. The disparity between what is available to the employees of the comparable concerns and what is given by the award to the employees of the respondent-concerns is even more glaring when we turn to the provisions made in the award for gratuity and sickness leave. It is provided by the award that where the services of an employee are terminated after he has completed ten years' service, or where an employee retires or is superannuated after completion of fifteen years' service, he is entitled to a gratuity at the rate of ten days' wages for each completed year of service, subject to the maximum of twenty months' salary. The fixing of maximum of twenty months' salary appears to be meaningless, for an employee cannot reach that maximum unless he completes a total service of sixty years. What is significant in this provision, however, is that the scale of gratuity is at the very low rate of ten days' wages for each completed year of service. Details of the gratuity schemes which prevail in two comparable concerns, Popular Book Depot and International Book House, are available from the details given in Ex. U. 1. In these two concerns gratuity is allowed at the rate of 21 days' salary for every year of service, respectively. The scale of gratuity which is allowed by the award is about one-behalf of the scale which prevails in these comparable concerns.

15. Before leaving this topic, a reference may be made to one of the terms of the gratuity scheme given in the award. The award provides that a workman who may be dismissed for being guilty of a misconduct involving moral turpitude would not be entitled to any payment of gratuity. A similar term in a gratuity scheme was held to be unjustified by the Supreme Court in Motipur Zamindari Company (Private), Ltd. v. Their workmen 1965 II L.L.J. 139.

16. Turning to the demand for sick leave, the award provides that sick leave should be granted for a period of not more than fourteen days within a calendar year 'on payment of 70 per cent. of wages.' Now, in the first place, the term 'wages' in this context, in the absence of any indication to the contrary, is liable to be interpreted as basic wages. Sri Dudhia submitted before us, and Sri Narayanaswami agreed with the submission, that the term 'wages' in this part of the award is ambiguous and requires to be clarified. In the comparable concerns the practice is to award wages along with dearness allowance during periods of sick leave. Secondly, in all the four comparable concerns, sick leave for fourteen days per year is allowed with full pay and allowance and not, as provided in the award, on payment of 70 per cent. of the wages. There is a third and a more serious defect in this part of the award. The employees of the respondent-concerns had demanded sick leave with pay and with a right of accumulating it. That the right of accumulating sick leave was demanded by the employees has been mentioned in Para. 3 of the award. The tribunal, however, has omitted to make any provision for accumulation of sick leave. In all the four comparable concerns sick leave is allowed to be accumulated up to 42 days.

17. We thus find that there is a patent disparity between the benefits which the tribunal intended to confer on the employees of the respondent-concerns and the benefits which the tribunal has actually conferred in the operative part of the award. That disparity must be attributed to some miscalculation or misapprehension on the part of the tribunal. This is clear from the fact that after giving details of the pay-scales and dearness allowance in Para. 16 of the award, the tribunal stated in Para. 17 that the total emoluments which were given by the award to the employees were 'at least the same' as those received by the employees of the four comparable concerns. It appears to us that the award thus suffers from a patent error and it is, therefore, necessary to set it aside and remand the dispute to the tribunal, in order that the tribunal may make an award whose operative provisions shall be in conformity with the intention declared by the tribunal of giving wage scales and other emoluments to the aggrieved employees which shall not be inferior to those received by similar categories of workers in the comparable concerns. As indicated above, there are two or three supplementary reasons for setting aside the award. They are that one of the terms of the scheme of gratuity runs counter to the decision of the Supreme Court mentioned above, that there is an ambiguity with regard to the term 'wages' in the part of the award relating to sick leave, and that the tribunal had failed through over sight to make any provision in respect of the employees' demand for accumulation of sick leave.

18. On behalf of the respondent-concerns Sri Narayanaswami argued that the region-cum-industry basis which has been recommended by the Supreme Court for the fixation of pay-scales cannot be looked upon as a provision of law, that what the tribunal is expected to do is to keep that basis in mind while fixing pay-scales, and that if in a particular case the tribunal keeps that basis in mind but decides in the exercise of its discretion to award lower pay-scales than those which prevail in similar industries in the same region, it is not open to the High Court to interfere with the exercise of that discretion under Art. 226 or 227 of the Constitution. The answer to Sri Narayanaswami is that the wholesome principle on which he relies does not apply to the present case. The tribunal in the present case did not in fact decide that the aggrieved employees should be awarded pay-scales and other emoluments different from, and lower than, those available to employees in similar industries in the same region. On the contrary, it is clear from the award that the tribunal intended to give to the aggrieved employees, and thought that it had given to the aggrieved employees, pay-scales and other emoluments which were 'at least the same' as those received by similar employees in comparable concerns. We are interfering with this award, not in order to replace the tribunal's discretion with our own, but in order that what was decided by the tribunal by the exercise of its discretion should be made effective.

19. It was further argued by Sri Narayanaswami that although the tribunal expressed its intention to confer on the aggrieved employees pay-scales and other benefits similar to those enjoyed by the employees in the comparable concerns, that intention was limited by the consideration that the total financial burden on the respondent-companies as a result of the award should not be in excess of Rs. 10,000 per year. We do not think that this argument is based on a correct understanding of the observations made by the Tribunal. A reference to the burden not exceeding Rs. 10,000 per year has been made in Para. 15 of the award. The tribunal has not stated in that paragraph that the total burden of the benefits to be granted by the award 'should not' exceed Rs. 10,000 per year. There was no facts before the tribunal on the basis of which it could have found that the total burden should not exceed that figure. What the tribunal has stated is that the burden of the benefits which it was going to confer by the award 'will not' exceed Rs. 10,000 in a year if that burden was calculated in a reasonable manner. It is, therefore, not correct to say that the tribunal's intention in introducing parity between the aggrieved employees and the employees of the comparable concerns was circumscribed by the limit of Rs. 10,000 per year as argued by Sri Narayanaswami. This is clear from the fact that after referring to the figure of Rs. 10,000 in Para. 15 of the award and after laying down the pay-scales and dearness allowance which were proposed to be introduced, the tribunal stated in Para. 17 that it had fixed the pay-scales in such a way that the total emoluments received by the aggrieved employees would be at least the same as those received by similar employees in the comparable concerns.

20. We may add that the total burden of the benefits conferred by the award is much less than Rs. 10,000 per year. According to the figures given by Sri Dudhia as well as Sri Narayanaswami, the total burden of increase in salaries including dearness allowance would not be more than Rs. 5,500 per year. The burden on account of the scheme of gratuity and sickness leave would not be more than Rs. 2,000 per year by any reasonable method of calculation. The total burden on the respondent-companies of the benefit given by the award is in a region of Rs. 7,500 per year.

21. For reasons given above, the award is set aside and the case is remanded to the tribunal for disposal in conformity with the observations made above and in accordance with law. Respondents 2 to 4 will pay the petitioners' costs. In calculating the costs, advocate's fees will be allowed at Rs. 250.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //