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The Burmah Shell Oil Storage and Distributing Company of India Ltd. Vs. the Government of Tamil Nadu Represented by the Chief Secretary to Government and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Reported in(1976)2MLJ8
AppellantThe Burmah Shell Oil Storage and Distributing Company of India Ltd.
RespondentThe Government of Tamil Nadu Represented by the Chief Secretary to Government and ors.
Cases ReferredAssociation v. Labour
Excerpt:
- .....the quantum of bonus 'payable: to the employees for the year 1973.(3) whether the demand of the workmen for revision of scales of wages for various categories of workmen is justified; if so, to fix the date.(a) the revised scales of wages ;(b) the manner of fitment; and(c) the date from which the revision should be given effect to.(4) whether the demand for revision of the scheme of dearness allowance is justified; if so, to formulate the revised scheme.(5) whether the demand for revision of the existing leave facilities is justified; if so, to specify the revised leave facilities to be provided.(6) whether the demand for leave fare assistance is justified; if so, to formulate a scheme.(7) whether the demand for duty allowance is justified ; if so, to fix the rate.(8) whether the.....
Judgment:

G. Ramanujam, J.

1. Since both the above writ petitions filed by the same petitioner against the same respondent arise out of the same facts, they are dealt with together.

2. Certain disputes arose between the petitioner-company and the third respondent-union arising out of a chapter of 48 demands raised by the union. The concerned Labour Officer held conciliation and sent a failure report on 21st December 1974 to the first respondent. The first respondent by G.O. Rt. No. 1327 dated 19th June, 1975 referred 10 of the demands. for adjudication by the Industrial Tribunal and in G.O. Rt. No. 1328, dated 19th June, 1975, declined adjudication on other demands raised by the union. Out of the ten demands referred, four related to revision of (1) dearness allowance, (2) pay scales, (3) duty allowance and (4) retirement age. The company had raised a counter demand in respect of these demands that there should be a reduction instead of enhancement as claimed by the workmen. Since these counter demands made by the company had not been referred for adjudication along with the relevant demands made by the workmen, the company has challenged the validity of the first G.O. in W.P. No. 4992 of 1975 referring the ten demands of the union for adjudication on the ground that their allied demands should have also been referred to. The company also seeks a writ of mandamus from this Court in W.P. No. 4993; of 1975 to direct the first respondent to refer its counter demands to the Tribunal to be adjudicated upon, along with the demands already referred to in the first G.O.

3. A perusal of the said G.Os. shows that the first respondent did not at all consider the counter demands of the company in relation to the said 4 matters. In the said G.Os. the first respondent has not said anything in relation to the same as to whether they are referred or not. It is seen that from the beginning the company has been insisting that its counter demands in relation to the said four matters have also to be considered along with the relevant demands of the union and that, the demands of the union cannot be adjudicated upon without reference to the claims of the company in respect of those four matters.

4. The learned Counsel for the petitioner contends that the first respondent has erroneously proceeded on the basis that the management cannot raise an industrial dispute and that a reference to the Industrial Tribunal cannot be made at its instance, and that it is well-established by now that a reference can be made even at the instance of the management. The learned Counsel refers to the decisions in Grown Aluminium Works v. Their Workmen : (1958)ILLJ1SC and Mill Owners Association v. Labour (1966) I L.L.J. 1 : : [1966]1SCR382 , in support of his plea that there can be a reference under Section 10(1)(e) of the Industrial Disputes Act at the instance of the management. In Grown Aluminium Works v. Their Workmen : (1958)ILLJ1SC , certain changes in the working hours, bonus, etc., proposed by the management as economy measures were opposed by the union as being prejudicial to them. This dispute was ultimately referred to the Industrial Tribunal. Before the Tribunal the management contended that as economy measures they are entitled to revise the wage structure to the prejudice of the workmen. It was held by the Tribunal that the payments sought to be cut down by the management were purely concessional payments and that therefore, the workmen had no right to claim them as constituents of their wage structure. On appeal, the Labour Appellate Trbunal held that the so-called concessional payments have been enjoyed by the workmen for a pretty long time as of right and as part of their basic wages and dearness allowance and as such they have become a term of the conditions of service, that it has been the convention with Industrial Tribunals not to reduce the existing emoluments of workmen to their prejudice and that therefore, the changes proposed could not be allowed. When the matter came before the Supreme Court, the management contended that the Labour Appellate Tribunal was in error in assuming that it has been the convention with Industrial Tribunals not to reduce the emoluments of the workmen to their prejudice under any circumstances and that just as a rise in the cost of living index and some other factors may justify revision in wage structure in favour of the workmen so should the revision of the wage structure be permissible in favour of the employer in case the financial position of the employer had considerably deteriorated or other relevant factors indicate such as revision. The Supreme Court accepted the said contention and observed:

We do not think it would be correct to say that in no conceivable circumstances can the wage structure be revised to the prejudice of workmen. When we make this observation, we must add that even theoretically no wage structure can or should be revised to the prejudice of workmen if the structure in question falls in the category of the bare subsistence or the minimum wage. If the wage structure in question falls in a higher category, then it would be open to the employer to claim its revision even to -the prejudice of the workmen provided a case for such revision is made out on the merits to the satisfaction of the Tribunal.

In Mill Owners' Association v. Labour : [1966]1SCR382 , The Supreme Court while laying down certain principles to be followed in fixing the wage structure of industrial employees expressed the view that though the claim of the employees for a fair and higher wage is undoubtedly based on the concept of social justice, industrial adjudication must take into account the problem of additional burden which such wage structure would impose upon the employer and consider whether the employer can reasonably be called upon to bear such burden, that the task of constructing a wage structure must be tackled on the basis that such wage structure should not be changed from time to time, that in dealing with such a problem which is difficult and delicate the financial position of the employer, the future prospects of the industry and the additional burden which may be on the consumer must all be carefully examined. A broad and overall view of the financial position of the employer, the natural and just claims of the employees for a fair wage and the capacity of the employer to pay it should all be taken into account, and in determining such a capacity, allowance must be made for a legitimate desire of the employer to make a reasonable profit. One other aspect which the Supreme Court has touched upon is this:

The other aspect of the matter which cannot be ignored is that if a fair wage structure is constructed by industrial adjudication, and in the course of time experience shows that the employer cannot bear the burden of such wage structure, industrial adjudication can, and in a proper case should, revise the wage structure, though such revision may result in the reduction of the wages paid to the employees. It is true that normally, once a wage structure is fixed, employees are reluctant to face a reduction in the context of their wage pocket; but like all major problems associated with industrial adjudication, the decision of this problem must also be based on the major consideration that the conflicting claims of labour and capital must be harmonized on a reasonable basis; and so, if it appears that the employer cannot really bear the burden of the increasing wage bill, industrial adjudication, on principle, cannot refuse to examine the employer's case and should not hesitate to give him relief if it is satisfied that if such earlier relief is not given, the employer may have to close down his business. It is unlikely that such situation would frequently arise, but, on principle, if such situations arise, a claim by the employer for the reduction of the wage structure cannot be rejected summarily.

Relying on the above decisions of the Supreme Court he learned Counsel for the petitioner contends that the managements also are entitled to demand a downward revision of the wage structure if the circumstances, existed for such a revision. The company has demanded in answer to the union's charter of demands for (1) reduction of the high rate of dearness allowance, (2) rationalisation of pay roll, (3) rationalisation of duty allowance and reduction in retirement age. It is urged by the counsel that the reference to the Tribunal of the demands made by the workmen without referring the demands made by the company for reduction of the existing wage structure etc., is not, in law, justified. It is also pointed out that the Government have acted without jurisdiction in referring only the demands made by the workmen for upward revision of the wage structure etc., without reference to the petitioner's demands for modification of the existing wage structure to the prejudice of the workmen.

5. As regards dearness allowance, the union's demand is that it should be paid on the cost of living index of the pre-month on certain rates and the company's case is. that the rate of escalation of dearness allowance should be reduced and that a ceiling on dearness allowance should be fixed.... On the question of rationalisation of pay roll the union's demand is for an upward revision of the scheme of dearness allowance. But the company had insisted for introduction of a quarterly review of dear, ness allowance instead of the existing monthly revision. As regards the rationalisation of duty allowance, while the union. asked for an upward revision of the duty allowance and for payment of duty allowance to clerks working in the said instalslation, the company claimed that there if no justification for the upward revision o, the duty allowance and that in any event-duty allowance will not be paid for those days on which a clerk is absent from work on account of leave or for any other reason, and that it will be paid only for the actual days worked. As regards the retirement age, the union demanded the existing retirement age should be raised, while the company wanted to reduce the same,

6. It is the case of the company that as the Government referred specifically the four demands made by the workmen, among others, the Tribunal can either reject the claim of the union or allow the same either in part or in their entirety, that having regard to the order of reference made by the Government, the Tribunal cannot go into the claim of the company that there should be a downward revision in relation to the four matters, unless the counter demands made by the company are also referred to.

7. In the counter-affidavit filed, the first respondent has stated that all the four issues raised by the company have been. taken into account while referring the relevant demands of the union to the Tribunal for adjudication in G.O. Rt. No.1327 dated 19th June, 1975, that having regard to the fact that the issues already referred are wide enough to cover the company's claims, the company can agitate its claims before the Tribunal without another separate order of reference and that, there is no need to refer to and deal with the claims of the company as if they were separate and independent demands dissociated from the demands made by the union. It is said that in any event if the company feels that its claims have not been covered by he reference already made, it can invoke Section 9-A of the Industrial Disputes Act and that would result in an industrial dispute. Thus the stand taken by the Government in the counter-affidavit is that where a dispute has arisen on certain demands raised by the workmen, the company cannot expect the Government to pass separate orders of reference on the issues raised by it.

8. The stand taken by the union, is that the first respondent was justified in not making a separate reference on the claims made by the company, that the dispute already referred to the Tribunal will' cover its claims as well, and that in any event there cannot be a reference to the Industrial Tribunal under Section 10(1) at the instance of the company.

9. On these rival contentions, the two questions that arise for consideration are whether there could be a reference under Section 10(l) of the Industrial Disputes Act at the instance of a management, and whether on the reference already made, the management can plead and seek adjudication by the Tribunal on its claims that there should be a downward revision of (l) dearness allowance, (2) the pay structure, (3) duty allowance, and, (4) retirement age.

10. As regards the first question, it is true as pointed out by Mr. Ramaswami, learned Counsel for the union, there has been so far no reference made to the Tribunals or Labour Court under Section 10(1)(c) or (d) at the instance of the management under Section 10(1)(c) or (d) and that it is always the union of workmen who had raisedindustrial disputes and moved the Government for reference to a Tribunal for adjudication of the said disputes. But that circumstance in my view cannot govern the interpretation of the provision in Section 10(1) of the Industrial Disputes Act. The relevant portion of Section 10(1) is set out below:

10. Reference of disputes to Boards, Courts or Tribunals. - (l) Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing :

(a)...

(b)...

(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication ; or

(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the second Schedule or the Third Schedule, to a Tribunal for adjudication.

The above Section does not indicate that the Government can make a reference to the Labour Court or to the Tribunal of a dispute only at the instance of the workmen. The language of Section 10(1) seems to suggest that whenever the Government is of opinion that any industrial dispute exists or is apprehended, it may refer the dispute. It may be, in most of the cases the disputes arise by the workmen making certain demands on the management and the management resisting the same. But it is possible that the management wants to modify the existing conditions of service by reducing the salary and allowances payable to them or by increasing the workload and working hours or the reduction of holidays etc., and when the workers resist the same, the management may seek a reference without unilaterally bringing about the changes or giving effect to the proposed modification. I am not inclined to agree with the contention of the union that the only way open to the management in such a contingency is to unilaterally give effect to the proposed modification of the conditions of service leaving it open to the union to take up the issue and seek a reference on the proposed revision. Acceptance of such a contention will mean that the management should create an industrial unrest by unilaterally modifying the conditions of service to the prejudice of the workmen so as to enable the union to seek a conciliation and thereafter a reference on the question of the management's unilateral modification of the conditions of service. Having regard to the object of the Industrial Disputes Act of preventing industrial unrest and of providing for a mode of settlement of the industrial disputes and the wide language contained in Section 10(1) the management, in my view, can also raise an industrial dispute which may properly form the subject-matter of a reference under Section 10(1).

11. Section 12 dealing with the duties of Conciliation Officers also suggests that an industrial dispute may also be raised by the management. Section 12(1) says that where an industrial dispute exists or is apprehended the Conciliation Officer must hold conciliation proceedings in the prescribed manner. Section 12(2) states that for the purpose of bringing about a settlement of such a dispute the Conciliation Officer has to investigate the dispute, do all things necessary for the purpose of inducing the parties for coming to a fair and amicable settlement of the dispute. If a settlement is arrived at by the parties before the Conciliation Officer Section 12(3) enjoins him to send a report to the Government along with a memorandum of the settlement signed by the parties to the dispute. Sub-Section (4) of Section 12 says that if no such settlement is arrived at, the Conciliation Officer shall send a report setting out the reasons as to why a settlement could not be arrived at. Sub-section (5) provides that on a consideration of the report sent by the Conciliation Officer, the Government has to consider the question of reference to a Labour Court or to a Tribuna.1. Thus, Section 12 does not suggest that the conciliation should be sought for only by the workmen and not by the management. Perhaps it is because of the wide language used in Sections 10(1) and 12 of the Act the Supreme Court had expressed in the decisions referred to above that like all problems associated with industrial adjudication, the problem of wage structure must be based on the proper consideration of the conflicting claims of labour and capital,, that there must be a harmonisation on a reasonable basis, and that if it appears, that the employer cannot really bear the burden of an increasing wage bill, industrial adjudication cannot refuse to examine his case and should not hesitate to give him relief if it is satisfied that if such relief is not: given the employer may have to close down his business.

12. I am, therefore, inclined to take the view that the company can also approach I the Conciliation Officer under Section 12(1) if there is a disagreement between the| management and the workmen on certain vital matters which are likely to affect industrial peace and to create industrial unrest and also for reference under Section 10(1) if such conciliation fails.

13. As regards the second question, the stand taken by the Government and the union is that even in the existing reference the company can put forward its plea for a reduction of dearness allowance, pay scales, duty allowance and the retirement age and that there is not necessity for a separate reference on those issues. But having regard to the points set out for adjudication in the annexure, it is not possible to say that the company will be entitled to raise its pleas in respect of all the above four matters. The annexure to the impugned order sets out the following questions for adjudication.

(1) To fix the age of retirement of the employees and the date from which it should be given effect to.

(2) To fix the quantum of bonus 'payable: to the employees for the year 1973.

(3) Whether the demand of the workmen for revision of scales of wages for various categories of workmen is justified; if so, to fix the date.

(a) The revised scales of wages ;

(b) The manner of fitment; and

(c) The date from which the revision should be given effect to.

(4) Whether the demand for revision of the scheme of dearness allowance is justified; if so, to formulate the revised scheme.

(5) Whether the demand for revision of the existing leave facilities is justified; if so, to specify the revised leave facilities to be provided.

(6) Whether the demand for leave fare assistance is justified; if so, to formulate a scheme.

(7) Whether the demand for duty allowance is justified ; if so, to fix the rate.

(8) Whether the demand for payment of lunch/supper/tiffin allowance is justified if so, to fix the rate of allowance to be paid under each item.

(9) Whether the demand for payment of Louse rent allowance is justified; if so, to fix the rate.

(10) Whether the demand for payment of city compensatory allowance is justified; If so, to fix the rate.

14. Items 1 and 7 in the annexure deal with the age of retirement and duty allowance. In my view they are wide enough to include the management's plea that there should be a reduction in the retirement age and duty allowance, and therefore, the stand taken by the Government and the Union that the management can urge all its pleas including the plea for reduction of the retirement age and duty allowance before the Tribunal, on the questions as referred appears to be tenable. Therefore, there is no necessity or justification for making a separate reference on that question as claimed by the company.

15. However, on the question of revision of dearness allowance and rationalisation of pay rolls, the questions referred (items 4 and 3) appears to cover 6nly the demands made by the workmen for upward revision and not the company claim for a downward revision. On the question as referred to in relation to these two matters, the company's claim that there should be a downward revision of the pay scales and dearness allowance cannot be gone into. Therefore the questions items 3 and 4 relating to the rationalisation of pay rolls and revision of dearness allowance cannot be said to be comprehensive enough to include the claim raised by the company that there should be a substantial reduction in the salary as well as dearness allowance. That the comp any raised its claim for downward revision in respect of both the matters even in the first instance as soon as the workmen demanded an upward revision of those items, is clear from its letter dated 20th May, 1974 addressed to the General Secretary of the Union and its letters dated 18th June, 1974 and 6th November, 1974 addressed to the Labour Officer. The report of the Labour Officer sent to the Government specifically refers to the four demands made by the company before him, and to the suggestion of the company that:

Since their demands on dearness allowance and retirement age have also been raised by the union, these demands could be referred for adjudication simply as dearness allowance and retirement age without details of the demands raised by either party. According to the management, by this both the pasties would be able to press their views and contentions and the adjudicator would have an open and free hand to decide the issues.

In the light of the above report from the Conciliation Officer and the specific issues raised by the company with reference to the claim of the workmen for revision of dearness allowance and pay scales, the Government should have referred the dispute in respect of those two matters in general terms instead of restricting the reference to the demands made by the workmen.

16. Apart from the question as to whether the management can seek a reference under Section 10(1) if a reference is made at the instance of the workmen, all matters ancillary and incidental to their demands should be referred to even as per the wording of Section 10(1)(c) and (d) which states that all ancillary matters relating to the dispute should also be referred to for the purpose of proper adjudication by the Labour Court or Tribunal. In this case, when the Government referred the demands of the workmen for dearness allowance and revision of pay scales to the Tribunal it cannot overlook the claim made by the management that there should be a downward revision of the dearness allowance and the pay scales, which they have specifically raised from the beginning. If an adjudication is made on the demands for upward revision of dearness allowance and the revision of pay scales without reference to the management's claim that there should be a downward revision, then the management will have no opportunity to bring their claims before the Tribunal at a later stage. Therefore, the impugned reference so far as it relates to items and 4 is quashed with a direction to the first respondent to make a fresh reference in respect of those two items so as to take in the demands of the workmen for upward revision and the claim of the company for downward revision. Thus, both the writ petitions are partly allowed with a direction to the first respondent as indicated above. There will, however, be no order as to costs.


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