Gopal Rao Ekbote, C.J.
1. This Appeal is from the judgment of our learned brother, M. Krishna Rao, J. given in W.P. No. 4076 of 1970 on 20th January, 1972 whereby the learned Judge allowed the writ petition and quashed the award made by the Industrial Tribunal in I.D. No. 21 of 1969, on 14th May, 1970.
2. The facts, in outline, are that the Government of Andhra Pradesh, referred by their G.O. Ms. No. 1003 dated 28th July, 1969 certain disputes for adjudication of the Industrial Tribunal. The demands were : 1. (a) Sanction of house rent allowance at the rate of Rs. 15 per month to every workman drawing wages less than Rs. 125 per month, (b) Sanction of house rent allowance at the rate of 12% of wages to those workers drawing 125 and above per month. (2) Abolition of the prevailing system of employing contract labour on continuous processes of production and absorption of the existing contract labour on regular basis. (3) Fitment of Sri Nawaz Khan in the scale of Rs. 300-25-450-E.B.-600 on a starting salary of Rs. 400 per month from May, 1963.
3. The dispute was between Hyderabad Chemicals and Fertilisers Ltd. and the Mazdoor Sangh of that factory.
4. After a proper inquiry the Tribunal held that although the Industry has no capacity and its financial position is not satisfactory, but since Rs. 5 per month as house rent allowance was granted to workmen drawing less than Rs. 125 per month and Rs. 7 to workers drawing Rs. 125 and more per month. The Tribunal thought that the impact of that burden would not be very heavy.
5. In regard to the second dispute about the contract labour, the Tribunal held that it should be abolished forthwith and further directed the management to engage the regular workers for doing the work which the contract labour was doing and that the persons should he engaged only from such contract labour. The Tribunal, however, left it to the discretion of the management as to what number of regular workers it should employ.
6. In regard to the third dispute, the Tribunal held that the juniors of Nawaz were given higher grade whereas he was denied which amounts to discrimination and as Nawaz Khan was already given higher grade, consequently, the Tribunal held; that Nawaz Khan is entitled to arrears being the difference in pay between the junior and senior scales with incidential increments from the month of May, 1963 upto the date when he was given the senior scale.
7. This writ petition was filed to challenge the validity of this award. The learned Judge allowed the writ petition mainly on the ground that the company was not financially sound capabable of bearing the burden which would be imposed as a result of the award of the Tribunal. He also found that Sri Nawaz Khan was not entitled to claim promotion to the higher grade as a matter of right. It was found that he has to claim increments with retrospective effect as in the case of civil servants,
8. In this appeal, the Mazdoor Sabha reiterated the same three contentions before us.
9. In so far as the first question regarding the house rent allowance is concerned, it centred round the question as to whether the house rent allowance formed part of the fair wage which was fixed by the Central Wage Board for heavy chemicals and fertilisers industries in their report presented in 1963. It was not doubted that while fixing the fair wage, if house rent allowance was taken into consideration, then the house rent allowance cannot again be put as a separate demand by the Sabha. We must, therefore, examine whether the Central Wage Board while fixing the Wage took into account the house rent allowance.
10. It would be evident from the report that one of the terms of reference was to work out a wage structure based on the principle of fair wages as set forth in the report of the Committee on fair wages.
11. It is relevant to note, in this connection that the Supreme Court in Hindustan Times Limited v. Their Workmen 1963-I L.L.J. 103, at 112 made the following observation:
In paying to keep true to the two points of social philosophy and economic necessities which lie for consideration, industrial adjudication has set for itself certain standards in the matter of wage fixation. At the bottom of the ladder, there is minimum basic wage which the employer of any industrial Labour must pay in order to be allowed to continue an industry.
12. Above this is the fair wage which may roughly be said to approximate to the need-based minimum, in the sense of wage which is 'adequate' to cover the normal needs of the average employees regarded as a human being in a civilised society.
13. It is seen from page 85 of the report of the Central Wage Board that the Board was fully alive to the norms laid down by the 15th Indian Labour Conference regarding the fixation of minimum wage. One of the considerations for fixing the minimum wage, according to the report, was the house rent corresponding to the minimum area provided for under the Government Industrial Houseing Scheme and it was, therefore, directed to be taken into consideration in fixing the minimum wage. It is thus clear that the Board has pointedly kept in view the formula suggested by the Labour Conference in its report for purpose of recommending fair wage.
14. At page 127, the report goes on to say that for the reasons given in Chapter V of the report it was not possible for the Board to adopt the full need-based minimum wage worked out on the basis of the norms laid down by the 15th Indian Labour Conference. The Board, however, decided that it would be fair and reasonable in the present position to fix the minimum total wage of an unskilled worker at Rs. 170 per month on the basis of the average of All-Indian Consumer Price Index of 209 for the year 1967.
15. What follows is that the recommendation was made keeping in view all the elements which go into the consideration for fixing the minimum wage including the house rent allowance.
16. From annexure XXXI at page 243 of the report, it is seen that for Hyderabad, the expenditure of a standard working class family was worked out at Rs. 196-62p. Since the capacity of the industry was not such as to allow that amount to be fixed as fair wage. as stated earlier, the Board recommended Rs. 170 as fair wage. It is pertinent to state that in the said annexure while working out the total consumption unit, house rent allowance Rs. 8 per month in Hyderabad was taken into account. All this clearly goes to show that the recommendation of the wage board in regard to the fair wage included house rent allowance. It is not, therefore, possible to consider separately the claim of house rent allowance now put forth by the Mazdoor Sabha. They cannot claim it twice over once in the form of fair wage and another separately.
17. That apart, when the Industrial Tribunal itself had come to the conclusion that the financial position of the industry is unsatisfactory, the Tribunal ought not to have added to its financial liabilities. The observation of the Tribunal that the house rent allowance would only make a small impact on the finances cannot be considered as sound because even a slight addition to the financial burden, which the industry is already suffering from, would not even be in the interests of labour welfare.
18. The second question then relates to contract labour. The law relating to contract labour is not in doubt. In Standard Vacuum Refining Co. of India Ltd. v. Their Workmen and Anr. : (1960)IILLJ238SC , the Supreme Court considered this question ; their Lordships observed:
in dealing with this question it may be relevant to bear in mind that industrial adjudication generally does not encourage the employment of contract labour in modern times'. They further observed:We agree that whenever a dispute is raised by workmen in regard to the employment of contract labour by any employer it would be necessary for the Tribunal to examine the merits of the dispute apart from the general consideration that contract labour should not be encouraged, and that in a given case the decision should rest not merely on theoretical or abstract objections to contract labour but also on the terms and conditions on which contract labour is employed and the grievance made by the employees in respect thereof. As in other matters of industrial adjudications so in the case of contract labour theoretical or academic consideration as may be relevant but their importance should not be overestimated.
The Supreme Court then found, in that case, that so far as cleaning, maintenance work at the refinery including the premises and plant was concerned it was incidental to the manufacturing process and was necessary for it and was of a perennial nature which have to be done everyday. Such work is done by the workers in the regular employ. The following observation is pertinent.
The matter would be different if the work was of intermittent or temporary nature or was little that it would not be possible to employ full time workmen for the purpose.
19. More or less the same view was expressed in Vegoils Private Ltd. v. The Workmen 1971-II L.L.J. 567 at 572. In that case the Supreme Court found that the contract labour regarding the work of feeding the hoppers and other allied activities are incidental and connected with the main industry. It was found on evidence that the feeding of hoppers in the solvent extraction plant was an activity. Closely and intimately connected with the main activity of the appellant, viz., crushing oil cakes and oil seeds for extraction of oil and other chemical production. It was further held that:
Excepting a few days, as already referred to above, this work has to go on continuously almost throughout the year. From this it follows that this item of work is incidental to the nature of the industry carried by the appellant, which must be done almost everyday.
20. The same criterion is now incorporated in Section 10 of the contract labour (Regulation and Abolishment) Act, 1970. Under Section 10(2) before issuing any notification under Sub-section (1) in relation to an establishment, the appropriate Government is enjoined to have regard, apart from other things, to the perennial nature, that is to say, the work is of sufficient duration having regard to the nature of the industry, trade, business, manufacture or occupation carried on in the establishment. The other consideration which should weigh with the Government are whether the process, operation of other work is incidental to or necessary for the industry, trade, business, manufacture or occupation that is carried on by the establishment apart from the other considerations mentioned in the section.
21. What is plain is that before the Act was brought into force, the Supreme Court had laid down to considerations for determining whether contract labour should be continued or not. Firstly, the nature of the work operated upon the contract labour must be of perennial nature, that is to say it must be sufficiently of long duration. In other words, it must continuously go on substantially in a part of the year or to put the same thing in other words most everyday and secondly, the operation carried on by the contract labour must be incidental to or necessary for the industry.
22. Keeping in view these requirements, if we examine the present case it would be evident the factory works only 140 days in a year. Although the work cannot be called seasonal, it cannot either be called as perennial since it works every much less than half a year, It would be an abuse of language to call it as perennial either. The nature of work is for feed rock phosphate into super-phosphate plant. The operation although necessary for the industry, could he carried on only when the factory is working. Since the factory works only for about 140 days in a year and for the rest of the whole year it does not work, we fail to see how the factory will be able to employ permanent labour for that purpose. For a large period of the year such labour would have no work whatsoever to do because the factory would not be working. Keeping in view, therefore, the nature of the work as well as the number of days when the operation takes place, we have no hesitation in reaching [he conclusion that one of the two requirements for the abolition of contract labour, as stated above, is not satisfied in the present case. The Industrial Tribunal obviously went wrong in giving a direction to abolish contract labour, namely, because it found that it is not a seasonal labour.
23. It is true that ideologically employment of contract labour would not be in the interests of labour. The labour requires to be eliminated in the interests of labour. These are ideologically very helpful things even in the interests of the industry. But the realities of the situation demand that when the work is not perennial or where the work is not incidental or necessary, labour on day wages or contract labour, in the present context, could be permitted to be employed. We, therefore, agree with the conclusion of the learned Judge that the Industrial Tribunal went wrong in directing the abolition of the contract labour and further directing the industry to employ such of them as they deem necessary for carrying the operation which they were earlier carrying on.
24. The only dispute which survives for our consideration is with regard to Sri Nawaz Khan. There are two grades : (!) for the junior officers and (2) the senior officers. For junior officers the grade is Rs. 200-450 and for senior officers the grade is of Rs. 300-600. The contention of Sri Nawaz Khan was that he being senior to two other officers, who have been given senior scale from May, 1963 but was actually given in 1967. He is, therefore, entitled to the differences between the two grades together with the incidental benefits. The claim was resisted by the management on the ground that Sri Nawaz Khan was not senior to the two officers who were given the senior grade, if the overall services are taken into consideration. The Tribunal without paying attention to the contention raised by the management reached the conclusion that in the cadre in which Sri Nawaz Khan was working he was senior to the two officers who were put in the higher grade. It was not disputed before us that if the overall services are taken into account, the two officers would be seniors. If so, then they were rightly put earlier in the higher grade. Admittedly there is no rule or any principle that the service in the cadre alone should be taken into account for purposes of seniority and not the over-all services. Although these principles are in vogue and if the management is following one of the two, no one can say that it was descriminatory or unreasonable. Once it is found that the two officers who were put in the higher grade were seniors to Sri Nawaz Khan, then the complaint of discrimination would have no basis whatsoever.
25. Even otherwise, if the two grades are different then, it would be a case of promotion to put a man of one grade in the higher grade. It is now fairly settled that matters of promotion are in the discretion of the management, vide - Workmen of Dem Dima Tea Estate v. Dem Dima Tea Estate 1963-I L.L.J. 251; Brooke Bond (India) Private Ltd. v. Their Workmen 1966-I L.L.J. 402.
26. Even if it is considered that in one category of service, there are two grades, even then to put a man in higher grade would be in the discretion of the management. It is true that discretion, like any other discretion, has to be exercised on well accepted principles in matters relating to industry. In other words, if higher grade is denied to a particular person which action amounts to unhealthy Industrial practice or vindictive-ness, then naturally the worker will be helped by the Industrial Tribunal. In this case no such allegation was made. The management has to take several factors into consideration while promoting the persons one grade to another or putting a junior officer in higher grade. Nothing was pointed out as to why that the discretion exercised in the case of the two officers by the management is bad. In fact it was not the intention of Sri Nawaz Khan to attack the promotion already given to two of the officers. Once this is concerned, we fail to see how Sri Nawaz Khan can claim that he should have been put in the higher grade from May, 1963. This claim has an implied result which cannot be overlooked. It could not be seriously doubted that creation of an additional post is in the discretion of the management. The result of giving higher grade to Sri Nawaz Khan with retrospective effect can amount to creating additional post in the senior grade without examining firstly, the financial implications and secondly, the need of the management for such a post. This was not examined by the Tribunal at all. The contention that no cadre strength is fixed in the senior scales does not mean that all those who could be added to that cadre regardless of minimum number should be added. No particular circumstance is shown as to why in May, 1963 Sri Nawaz Khan ought to have been given higher grade. We are, therefore, satisfied that the learned Judge was right in holding that Sri Nawaz Khan-could not as a matter of right claim the difference between the pay of the grades from 1963 to 1967.
27. Since no other contention was raised, the appeal fails and is dismissed with costs. Advocate's fee Rs. 100.