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Plantation Corporation of Kerala, Ltd. (by Managing Director) Vs. Purushothaman Nair (K.) (Retired Industrial Tribunal) and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1967)ILLJ503Ker
AppellantPlantation Corporation of Kerala, Ltd. (by Managing Director)
RespondentPurushothaman Nair (K.) (Retired Industrial Tribunal) and ors.
Excerpt:
- - it is now well-settled that the principle of industry-cum-region has to be applied by an industrial court, when it proceeds to consider questions like wage-structure, dearness allowance and similar conditions of service. it would be interesting to notice in this connexion that all the tribunals that have dealt with the present dispute have consistently directed that existing wages should not be reduced to the prejudice of the workmen. i am not, therefore, quite satisfied that respondent 1 committed an error in not adverting in ex......in similar establishments or estates in the region, then there is no ground for attacking the wage rates fixed in ex. m. 7.4. in 1960-i l.l.j. 262 it is observed at p 264:sri sastri contends that the method adopted by the tribunal was a scientific method; it took into account a basic wage deducible on the industry-cum-region basis and this should not have been reversed by the appellate tribunal. it, however, appears that in ascertaining the wages which labour in comparable trades was getting in the relevant region, the tribunal has completely lost sight of the fact that in addition to the basic wages of rs. 26, rs. 43, was the average minimum clearness allowance paid to the workers and that made a very large difference in the total earnings of the workman. in determining the minimum.....
Judgment:

K.K. Mathew, J.

1. The Plantation Corporation of Kerala, Ltd., a Government-owned company, is the petitioner. The petition seeks to quash, by issue of the appropriate writ or order, Ex. P. 1 award passed by respondent 1. There is a rubber estate consisting of 2,000 acres known as Kalady Plantations. From May to August 1960 that estate was being managed as a unit of the Forest Department. Another estate called Kodumon Plantations was also being managed as a unit under the Agricultural Department of the Government. In August 1960, these two estates were brought under the control of the Director of Rubber Plantations. According to the petitioner the workers in the Kalady estate were paid wages on the basis of the schedule rates obtaining in the Forest Department for employing casual labourers by the department and the rates of wages at which they wore paid were higher than the prevailing rates of wages in other rubber plantations throughout the State. The workers in the Kodumon estate were being paid at the following rates:

Men-Rs. 1-10-6;

Women-Rs. 1-4-3, etc.;

whereas the rates of wages in the Kalady estate are:

Men-Rs. 2,00;

Women-Rs. 1,50; and

Head coolies-Rs. 2.50.

While these two estates were brought under the control of the Director of Rubber Plantations, Government passed an order on 7 September 1961, marked Ex, M. 6 in Ex. P. 1 proceedings, stating that in respect; of the workers employed in the Kalady Rubber Plantations, the existing rates of wages in the Chalakudy (Kalady) Plantations will be followed as a temporary measure till 19 August 1961 and that the necessity for the continuance of the above rates thereafter will be determined after examination of the question. Later on the Government passed the order, dated 30 September 1961, marked Ex. M. 7 in Ex. P. 1 proceedings, directing that the rates of wages prevalent in the Kodumon Plantations be paid to the workers in Kalady Plantations with effect from 20 August 1961, with the result that the rates of wages of the workers in the two plantations became the same. The consequence of this order was that workers in the Kalady Plantations raised an industrial dispute and the dispute was referred by agreement of parties to respondent 1 under Section 10A of the Industrial Disputes Act. The question referred for adjudication was whether the management was justified in effecting the cut in the rated of wages of the workers in the Kalady Plantations. Respondent 1 found that it could not be said that the management was just fled in effecting the cut in the rates of wages prevailing in that estate from 20 August 1961, and that the workers in that estate were entitled to get the wages at the origins rates, namely, Rs. 2.00 for men, Rs. 1.50 for women and Rs. 2,50 for head coolies with effect from 20 August 1961.

2. The management has filed this writ petition contending that the award is vitiated by errors of law apparent on the face of the record on the ground that respondent 1 has misunderstood the scope and effect of Exs. M. 6 and M. 7 marked in Ex. P. 1 proceedings.

3. The main argument addressed to ma by counsel for the petitioner was that there was no real cut in the rates of wages, but the management has only regularized the rates of wages which had been temporarily fixed in Ex. M. 6 order and that respondent 1 went wrong in thinking that the management has brought about a cut in the rates of wages by Ex. M, 7 order. Counsel submitted that in deciding the question whether the rates of wages in an industry are reasonable, the paramount consideration should be whether the prevailing rates of wages in other similar establishments or industries are more or less the same, that higher rates of wages were paid in the Kalady Plantations because they were originally managed as a unit of the Forest Department and because in the Forest Department the casual labourers were paid at these rates, that no rates of wages were fixed for the workers in the Kalady Plantations, and that in Ex. M. 6 Government fixed the rates of wages not on the basis of any comparative study of the rates of wages prevailing in similar plantations in the region but as a temporary measure without adverting to an implications of the question. In other words, counsel said that what was done in Ex. M. 6 was that the rates of wages paid to casual employees of the Forest Department were adopted as a temporary measure for paying the workers of the Kalady Plantations and that these rates of wages cannot be taken as the standard rates for the workers of the Kalady Plantations. Counsel referred to the rulings in Bijay Cotton Mills, Ltd. v. their workmen and Anr. 1960-I L.L.J. 262; Birla Cotton, Spinning and Weaving Mills, Ltd., Delhi v. its workmen and Ors. 1982-I L.L.J. 642; French Motor Car Company, Ltd. v. their workmen 1962-II L.L.J. 744 and Greaves Cotton & Co., Ltd. and Ors. v. their workmen (Greaves Cotton and Allied Companies Employees' Union) 1964-I L.L.J. 342 and said that to decide the question of the fairness and reasonableness of the rates of wages it is necessary to find the rates of wages prevailing in similar industries or plantations and if the rates of wages fixed for the workers of the Kalady Plantations under Ex. M. 7 compare favourably with the rates of wages adopted in similar establishments or estates in the region, then there is no ground for attacking the wage rates fixed in Ex. M. 7.

4. In 1960-I L.L.J. 262 it is observed at p 264:

Sri Sastri contends that the method adopted by the tribunal was a scientific method; it took into account a basic wage deducible on the industry-cum-region basis and this should not have been reversed by the Appellate Tribunal. It, however, appears that in ascertaining the wages which labour in comparable trades was getting in the relevant region, the tribunal has completely lost sight of the fact that in addition to the basic wages of Rs. 26, Rs. 43, was the average minimum clearness allowance paid to the workers and that made a very large difference in the total earnings of the workman. In determining the minimum basic wage the fact that a large amount of dearness allowance was being paid to employees in other comparable occupations in the same region should not have been ignored by the tribunal, and that is one infirmity on which the appellate tribunal was entitled to comment.

5. In 1962-II L.L.J. 744 the Court said at p. 747:

The main contention on behalf of the appellant is that wages ate fixed on industry-cum-region basis and the tribunal went wrong when it took into account for comparison industrial concerns which were entirely dissimilar to the appellant's. It is now well-settled that the principle of industry-cum-region has to be applied by an industrial court, when it proceeds to consider questions like wage-structure, dearness allowance and similar conditions of service. In applying that principle industrial courts have to compare wage-scales prevailing in similar concerns in the region with which it is dealing, and generally speaking similar concerns, would be those in the same line of business as the concern with respect to which the dispute is under consideration....

In 1964-I L.L.J. 342 it was held at pp. 346 and 347:

Both parties filed scales of wages prevalent in what they considered to be comparable concerns and it is clear from the documents filed that some of the comparable concerns were the same in the documents filed by the two parties. On the whole, therefore, we do not think the tribunal was wrong in putting emphasis on the region aspect of the industry- cum-region formula in the present case, in so far as clerical and subordinate staff was concerned, for the four companies before us do not belong to the same industry and Greaves Cotton & Co. controls the other three. Considering, therefore, the standing of the main company (namely, Greaves Cotton & Co., Ltd.), it was not improper for the tribunal in the present cases to rely on the comparable concerns which were cited on behalf of the respondents, some of which were common with the comparable concerns cited, on behalf of the appellants.

These passages would show that the important consideration for fixing the wage-structure in an industry is the rates of wages prevailing in similar industries in the region. Counsel for the petitioner said that respondent 1 went wrong in brushing aside the evidence in the case regarding the rates of wages in other similar estates in the locality for deciding the question whether the cut in the rates of wages was justified or not.

6. Respondent 1 came to the conclusion that there was no justification in effecting the cut on the ground that in Ex. M. 7 no relevant reasons were given by Government for the same. The only reason given in Ex. M. 7 for making the cut is that the workers in the Kodumon Plantations are being paid at a lower rate. Respondent 1 states in Ex. P. 1 award that the rates of wages specified in Ex. M. 6 were adopted with full knowledge of the lower rates of wages fixed for the workers in the Kodumon Estate, and therefore, that can hardly afford a reason for effecting the cut by Ex. M. 7 order. The reason which prevailed upon the Government for fixing a higher rate of wages in Ex. M. 6 is the high demand for the labourers in Chalakudy area and the enhanced wage rates prevailing in that locality; that is stated in Exs. M. 6 and M. 7. It is also clear from Ex. M. 6 that it was after examining the question in all its aspects that Government fixed the rates of wages in that order though, no doubt, as a temporary measure. The reasons for fixing a high rate of wages in Ex. M. 6 continued on the date of Ex. M, 7 as it was not shown to respondent 1 that those reasons had ceased to exist. What then was the justification for the out was the question which respondent 1 asked and answered by saying that there was none. I do not think that the approach is in any way vitiated. Besides, there are practical considerations in the evaluation of this question. In Crown Aluminium Works v. their workmen 1958-I L.L.J. 1, it is observed at p. 7:.The tribunal must also keep in mind some important practical considerations. Substantial reduction in the wage-structure is likely to lead to discontent among workmen and may result in disharmony between the employer and his employees; and that would never bo for the benefit of the industry as a whole. On the other hand, in assessing the value or importance of possible discontent amongst workmen resulting from the reduction of wages, industrial tribunals will also have to take into account the fact that if any industry is burdened with a wage-structure beyond its financial capacity, its very existence may bo in jeopardy and that would ultimately lead to unemployment.

It is thus clear that in all such cases all relevant considerations have to be carefully weighed and an attempt has to be made in each case to reach a conclusion which would be reasonable on the merits and would be fair and just to both the parties. It would be interesting to notice in this connexion that all the tribunals that have dealt with the present dispute have consistently directed that existing wages should not be reduced to the prejudice of the workmen.

In other words, though each tribunal attempted to constitute a wage-structure in the light of the materials furnished to It, a saving clause has been added every time protecting the interests of such workmen as were drawing higher wages before. Even so, it would not be right to hold that there is a rigid and inexorable convention that the wage-structure once fixed by industrial tribunals can never be changed to the prejudice of workmen.

These observations would indicate that it is only under very extraordinary circumstances that wage-rates once fixed can be altered to the prejudice of the workmen. A reduction in the rates of wages should not be lightly effected as that would create unhealthy feeling among the workers which in turn will generate Industrial disharmony.

7. Sri K. V. Suryanarayana Ayyar, on behalf of the petitioner, referred me to the evidence as regards the prevailing rates of wages for the workmen in the rubber estates of Malayalam Plantations and Plorce Leslie & Co., Ltd., and other plantations and said that Government was justified in regularizing the rates of wages in Kalady Plantations by reducing them. I do not think that this has much relevance in dealing with the question under consideration. Respondent 1 was not framing an ideal wage-structure for the workers in the Kalady Plantations. Respondent 1 was only considering the limited question whether the cut, in the wage-rates by Ex. M. 7 was justified. What Government has done by Ex. M. 7 was simply to accept the recommendation of the Director of Rubber Plantations for reducing the wages of the workers in the plantations. No justifiable reasons were given for it in the order. Government did not purport to base its decision for reducing the wage-rates in Ex. M. 7 on the ground that the rates of wages prevailing in comparable rubber plantations in the region are lower. The Government has admitted in Ex. M. 7 that it was in view of the high demand for labour and enhanced wage-rates prevailing in the locality that higher rates of wages were fixed in Ex. M. 6 and not on account of the fact that those were the rates paid by the Forest Department for their casual labourers. As the reasons for fixing the higher rates of wages in Ex. M. 6 have not been shown to have ceased to exist at the time when Government passed Ex. M. 7 order, and as there is no other reason mentioned in Ex. M. 7 except the fact that the rates of wages in Kodumon Plantations are lower, a circumstance in existence at the time of passing Ex. M. 6-I do not think that respondent 1 committed an error of law in thinking that there was no justification for effecting the cub. As I have already said, respondent 1 was not considering the question of an ideal wage-structure for the workers in Kalady Plantations. I am not, therefore, quite satisfied that respondent 1 committed an error in not adverting in Ex. P. 1 award to the prevailing rates of wages in comparable plantations in the region for deciding the justification of the cut.

8. I dismiss the petition, but in the circumstances, there will be no order as to costs.


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