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National Umbrella Factory Vs. Sharva Sharmik Sangh and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Application No. 1979 of 1966 with Special Civil Application No. 1994 of 1966
Judge
Reported in(1968)ILLJ811Bom
ActsIndustrial Disputes Act, 1947 - Sections 2
AppellantNational Umbrella Factory
RespondentSharva Sharmik Sangh and ors.
Excerpt:
.....challenged relating to demand of gratuity - large numbers of workers in petitioner-firm were time-rated not piece rated - time-rated workers in concern were employed throughout the year - tribunal committed an error of law by not making different provisions for amount of gratuity payable to piece-rated and time-rated workers - held, award modified as to provide amount of gratuity payable to time-rated workers shall be equivalent to fifteen days consolidated wages for every year of service. (ii) wages - award challenged regarding grant of wages for period of closure - petitioner-firm contended that they have paid all workmen who were recognized as workmen of firm but not who were working as independent workers- since tribunal found that all persons who were claimed by firm to be..........for the petitioner-firm argued that quite a large number of workers employed in the concern are time-rated and not piece-rated, that they are continuously employed all the year round and that the considerations mentioned by the tribunal for granting an amount of gratuity equivalent to twenty days' consolidated wages for every year of service do not apply in their case. in view of the fact that piece-rated workers are employed for only a part of the year and that time-rated workers are employed all the year round, the amount of gratuity payable to the two categories of workmen should not have been fixed, according to sri shetye, at a uniform rate. sri kulkarni for respondent 1 union did not dispute that the time-rated workers in the concern are employed throughout the year. sri.....
Judgment:

Tarkunde, J.

1. These petitions have been filed under Art. 227 of the Constitution by National Umbrella Factory for setting aside two awards passed by an industrial tribunal on references under the Industrial Disputes Act. The petitioner is a firm engaged in the assembly of umbrellas. Till recently the concern belonged to a well-known firm of long standing called Ebrahim Curium & Sons. On account of disputes between the partners of Ebrahim Curium & Sons, a suit for the dissolution of the partnership was filed on the Original Side of this Court in 1963. During the pendency of the suit, the concern was closed for about four months from 20 November, 1963. Some of the partners of Ebrahim Curium & Sons then formed the present petitioner-firm, National Umbrella Factory, and by a consent order the petitioner-firm took over the business of Ebrahim Curium & Sons as a going concern on 11 April, 1964. In May 1964, the workmen who claimed to be the employees of the petitioner-firm, and who were represented by the last respondent-trade union, raised an industrial dispute in regard to wages, dearness allowance, gratuity and other demands. The demands of the workmen were referred by the State Government for the decision of the industrial tribunal, respondent 2, by two separate references, one relating to the demand for gratuity and the other to the remaining demands. The awards of the tribunal on the demand for gratuity is challenged in Special Civil Application No. 1979 of 1966, and the award relating to the other demands is challenged in Special Civil Application No. 1994 of 1966.

2. The award on the demand for gratuity allows to each workman an amount of gratuity equivalent to twenty days' consolidated wages for every year of service subject to a maximum of fifteen months' wages. In this connection, the tribunal has made the following observations in its award :

'The workmen are being paid consolidated wages. In view of the circumstances that this is a prosperous and flourishing concern, it is deemed reasonable and fair that the rate should be twenty days' consolidated wages for every year of service. It is noted that the majority of the workers are piece-rated and they are not employed all the year round. It is only about two months in a year but they gel full work and earn full wages. For about six months, there is less work and their earnings are low. For about four months, there is no work, they are not employed and they do not earn any wages. The twenty days' wages shall be computed on the basis of the average wages for the one year proceeding the day on which the gratuity accrues due. In the case of most of the said piece-rated workmen, the amount will be comparatively small. In view of the prosperity of the employer concern, it is deemed proper that the amount of gratuity shall be subject to a maximum of fifteen months' wages.'

3. Now Sri Shetye for the petitioner-firm argued that quite a large number of workers employed in the concern are time-rated and not piece-rated, that they are continuously employed all the year round and that the considerations mentioned by the tribunal for granting an amount of gratuity equivalent to twenty days' consolidated wages for every year of service do not apply in their case. In view of the fact that piece-rated workers are employed for only a part of the year and that time-rated workers are employed all the year round, the amount of gratuity payable to the two categories of workmen should not have been fixed, according to Sri Shetye, at a uniform rate. Sri Kulkarni for respondent 1 union did not dispute that the time-rated workers in the concern are employed throughout the year. Sri Kulkarni further told us that contrary to what is stated in the award, a majority of the workers in the concern may be time-rated and not piece-rated. That being so, it appears to us that the tribunal was in error in not making different provisions for the amount of gratuity payable to piece-rated and time-rated workers. We are, however, unable to hold that this is an error of law and that it can be corrected in a petition under Art. 227 of the Constitution. We would have, therefore, been required to reject this contention of Sri Shetye. At our suggestion, however, Sri Kulkarni fairly conceded that the award may be modified so as to provide that the amount of gratuity payable to time-rated workers shall be equivalent to fifteen days' consolidated wages for every year of service. On the basis of this concession, we shall direct that the award be modified in the above manner.

4. It was further argued by Sri Shetye that the petitioner-firm took over the going concern of Ebrahim Curium & Sons as a result of a consent order passed on 11 April, 1964 and that the previous period of service of the workers should not have been allowed to be taken into consideration in determining the amount of gratuity payable to them under the scheme adopted by the tribunal. We find that this contention has not been referred to in the award of the tribunal, and we are told by Sri Kulkarni, who appeared before the tribunal on behalf of the petitioner-firm. We see no reason why this contention should be allowed to be taken for the first time in this petition.

5. In the result, on a concession made by respondent 1 union, the award in Special Civil Application No. 1979 of 1966 will stand modified to this extent only that the amount of gratuity payable to time-rated workers of the petitioner-arm shall be equivalent to fifteen days' consolidated wages for every year of services subject to a maximum of fifteen months' wages. The rest of the award will remain unaltered. Subject to these modifications, the petition fails and is dismissed. The petitioner-firm will pay the costs of respondent 1 union.

6. Turning to Special Civil Application No. 1994 of 1966, the award in that case covers a number of demands which were referred to the tribunal. One of the demands was for increase of wages and another was for grant of dearness allowance. The tribunal did not make a separate grant of dearness allowance, but provided that all time-rated workmen, who are of the unskilled class, shall be paid consolidated wages at rates not lower than Rs. 5 per day and that all time-rated workmen, other than those of the unskilled class, shall be paid consolidated wages at rates not lower than Rs. 6.50 per day. Another demand of the workers was for wages for the period between 20 November, 1963 and 20 April, 1964 when the factory had been closed, and this demand was substantially granted by the tribunal. Another question which was referred to the tribunal was whether the 62 persons whose names were mentioned at annexure A to the reference were workmen within the meaning of S. 2(s) of the Industrial Disputes Act as contended by the respondent-union or whether they were independent contractors as claimed by the petitioner-firm. At the hearing before the tribunal, the petitioner-firm took up the position that the persons at serial Nos. 24 to 61 in the said annexure were independent contractors, but admitted that the remaining persons were workmen of the concern within the meaning of S. 2(s) of the Industrial Disputes Act. On this question, the tribunal gave a finding that all the 62 persons mentioned in the annexure were workmen within the meaning of the said provision. The above findings of the tribunal were challenged before us by Sri Shetye on behalf of the petitioner-firm.

7. The finding of the tribunal that all the 62 persons mentioned in annexure A to the reference are workmen within the meaning of S. 2(s) of the Industrial Disputes Act is based on a number of facts mentioned in the award. It was not shown before us by Sri Shetye that any error of law was committed by the tribunal either in finding the said facts or in drawing the conclusion therefrom that the persons concerned were workmen within the meaning of S. 2(s) of the Industrial Disputes Act. The objection to this finding must, therefore, be rejected.

8. The provision in the award of minimum wages of Rs. 5 per day for unskilled time-rated workers and Rs. 6.50 per day for skilled and semi-skilled and time-rated workers was challenged on two grounds. It was argued, in the first place, that there was no evidence before the tribunal on the basis of which an increase in wages could have been lawfully awarded by the tribunal. The tribunal found that the petitioner's concern was a prosperous one and that the average profit earned by the concern on invested capital was as high as 37 per cent. Sri Shetye argued that the prosperity of the concern could not, by itself, justify a rise in wages. He pointed out that at the hearing before the tribunal, it was conceded by the respondent-union that the prevailing wage-rates in this concern are the highest in the same class of industries in the same region. It was, moreover, not shown that prevailing wages for the same or similar work in comparable concerns in the same region were higher than those being paid to the workmen of the petitioner-firm. It was, therefore, urged by Sri Shetye that the increase in wages awarded by the tribunal had no justification. We find, however, that what the tribunal had granted are minimum wages required for subsistence. The tribunal referred to thirteen awards which were made prior to August 1962 in which minimum wages were awarded to workmen of the lowest category in the city of Bombay at the rate of Rs. 3.10 per day. The tribunal has been referred to other awards made in 1965 where higher minimum wages were allowed to unskilled, semi-skilled and skilled workmen on the ground of a further rise in the cost of living index. The cost of living index is now much higher than in 1965, and it was on the basis of the present index figure as compared to the index figures of August 1962 and of 1965, that the tribunal decided to award minimum wages of Rs. 5 per day for unskilled time-rated workmen and Rs. 6.50 per day for semi-skilled and skilled time-rated workmen. In our view, the tribunal acted well within its jurisdiction in awarding minimum wages to time-rated workmen on a consideration of what was required for subsistence at the prevalent cost of living.

9. The second ground on which this part of the award was challenged by Sri Shetye was that the tribunal acted beyond the scope of its jurisdiction in awarding consolidated wages to the time-rated workers. It is common ground that all the employees of petitioner-firm were being paid consolidated wages all along. In their demands, however, the workers had asked for a rise in their minimum wages and also for dearness allowance to be fixed at a certain scale. The tribunal held in its award that it was not necessary to split up the wages into basic wages and dearness allowance and that the present systems of paying consolidated wages to the employees should be continued (Para. 30 of the award). It was urged by Sri Shetye that the workers having asked for increase in wages as well as payment of dearness allowance, it was not open to the tribunal to grant consolidated wages to the workers. In support of his contention Sri Shetye relied on a decision of a Division Bench of this Court in Special Civil Application No. 1505 of 1964 decided on 4 July, 1966. We do not find it necessary to consider how far that ruling applies to the case before us. This is because the petitioner-firm is clearly estopped from challenging the award on the ground that the tribunal has failed to split up wages into basic wages and dearness allowance. In Para. 38 of its written statement filed before the tribunal, the petitioner-firm had itself contended that it was not appropriate to split up the wages of the workmen into basic wages and dearness allowance, and it was this contention of the petitioner-firm which was accepted by the tribunal. The petitioner-firm cannot be allowed to challenge the award on the ground that the contention advanced by is was accepted by the tribunal.

10. It was finally urged by Sri Shetye that the tribunal was not justified in granting to the workmen wages for the period during which the factory was closed. In this connexion, the tribunal has observed in its award (Para. 41) :

'The closure being on account of the disputes between the partners and not any fault on the part of the employees, the workmen should be entitled to compensation for loss of their wages for the period of the closure, the measure of compensation being the wages payable to them. This position is expressly conceded on behalf of the employer.'

11. Sri Shetye claimed that no such concession was made before the tribunal on behalf of the employer. But Sri Shetye is clearly wrong in this contention. Sri Kulkarni, who appears on behalf of the respondent-union, had also appeared before the tribunal and he told us that the position taken on behalf of the petitioner-firm before the tribunal was that the firm had paid wages for the period of closure to all the persons who were recognized by the firm as its workmen, and that the firm refused to make any payment to those persons who were claimed by the firm to be independent contractors. The tribunal was justified in construing this statement as an admission that the workmen of the firm were entitled to get wages for the period of closure by way of compensation. As stated by us, the tribunal found that all the persons who were claimed by the firm to be independent contractors, were in fact the employees of the firm. The grant of wages for the period of closure cannot, therefore, be challenged by the petitioner-firm.

12. In the result, Special Civil Application No. 1994 of 1966 fails and is dismissed. The petitioner-firm will pay the costs of the respondent 1 union.


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