AI Structured Summary
Not yet generated for this judgment
Judgment
Horwill, J.—This is an appeal against the order of Subba Rao, J., on an application u/s 45 of the Specific Relief Act by the Chrome Leather
Co., Limited, directing the appellant, the Industrial Tribunal, Madura, at Commercial Tax Office, North Beach Road, Madras, not to enquire into
the issues, framed by it in the dispute between the Chrome Leather Co., Limited, and the Chrome Leather Company Workers'' Union, of which
the second respondent is the Secretary, and further directing the Tribunal to frame fresh issues in the light of his findings.
By G.O. No. Ms. 1349 of the Development Department, Government of Madras, dated 18th March, 1948, the Government declared that an
Industrial dispute had arisen between the workers and the management of the Chrome Leather Co., Limited, and as the parties to the dispute had
been unable to arrive at an amicable settlement, the Government directed that the dispute be referred to the Industrial Tribunal, Madura, for
adjudication u/s 10(1)(c) of the, Industrial Disputes Act, 1947. The Tribunal thereupon called upon the parties to file statements of their claims; and
in accordance with the cases set out by the two parties, the Tribunal framed a number of issues, which can, roughly speaking, be classified under
three heads; (1) The re-instatement of dismissed workmen; (2) The granting of an annual bonus, gratuities upon retirement, pensions, provident
fund, and presents to be given each year at the Pongal festival; and (3) The providing of houses for the workmen, or, in default the granting of
house allowance the revival of the school which formerly existed for the children of the workmen, and the granting of certain other amenities. In
general the learned Judge found that the Tribunal had no jurisdiction to grant any of the workers demands, except in so far as they had a legal right
to them under existing and legally enforceable contracts.
It might be well to deal first with the contention of the management, which was generally accepted by the learned Judge, that the Tribunal could
only enforce the existing rights of the workmen and could not give them anything to which they did not have a pre-existing right; for example, it is
stated m the affidavit filed by the management that
no tribunal has jurisdiction to add to or vary the terms of contract entered into between an employer and his workmen except with the consent of
both or under statutory powers which do not exist in the present case.
The summary of their argument on this point is expressed by the learned Judge-in these words:
The Tribunal''s jurisdiction is only to decide whether the terms of the contract between the parties have been complied with or whether the
conditions of service have been violated It has no power to add to terms of the contract or to introduce any new condition of service and thereby
make out a new contract between the parties.
The learned Judge found himself in general agreement with this argument, except that he was prepared to say that the Tribunal had a right to
increase wages. In living his findings with regard to the jurisdiction of the Tribunal to decide he questions raised, he emphasised again and again the
necessity of enforcing the terms of the contract between the parties. For example, on the question of reinstatement of the dismissed workmen, he
held:
...the only question the Tribunal would be entitled to decide is whether or not all or any of the workmen in question have been wrongfully dismissed
and if they have been wrongfully, dismissed the Tribunal could treat the in employees to be in service and give a declaration to that effect. If they
been legally discharged, the Tribunal has no power to direct their re-instatement.
On the question of the general revision of the Standing Orders framed under Act XX of 1946, the learned Judge stated:
If the workmen have grievance, it is open to them to agitate the same in the manner provided by that Act The Tribunal has no jurisdiction to amend
the Standing Orders.
In other words the conditions of contract of the employment between the management and the workers cannot be changed under Act XIV of
1947. With regard to the questions of gratuity, bonus, and Pongal presents, the learned Judge stated :
A dispute in regard to gratuity, bonus or Pongal presents cannot be an industrial dispute unless it is one of the terms of the contract between the
parties that such payments should be made. The jurisdiction of the Tribunal is confined only to enquire and find whether the contract between the
parties provided for gratuity bonus and Pongal presents. It has no jurisdiction to direct the employer to provide for them in case there was no
contract between the parties to that effect.
The purpose of the legislation enacted in Act XIV of 1947, is to settle disputes that arise between the workers and the management which, if not
settled would result in a strike or lock-out and dislocation of business essential to the life of the community. It is very rarely that such disputes relate
to the infringement of existing contracts between the management and the workmen. In almost every case, the workmen are agitating for a higher
standard of living, generally conceded by the community to be permissible for workers as well as for those in more comfortable circumstances The
most frequent cause of strikes is a refusal by the management to increase wages beyond those agreed upon when the workers were first employed.
Another common cause of disputes arises out of the dismissal of workmen, because of the part they have played in demanding something of the
management which the management considers unreasonable, and the consequent unrest caused by suck agitators among the general body of
workers. Workmen frequently demand, too where suitable house accommodation is not available within reasonable distance of the works, that the
management should provide houses with a reasbnable standard of comfort and hygiene. It is also considered reasonable to expect that
managements will provide dispensaries to treat the workers, not only in cases of accidents arising out of employment, but also in cases of sickness
due to other causes; and such relief is often extended to the members of the families of the workers who live in houses provided by the
management. If one were to seek to enumerate all the amenities granted by some managements and often demanded by the workmen, it would
indeed be a long list; and it is because some managements refuse to provide such amenities as are granted by the other managements to their
workmen, that disputes frequently arise. The above and other matters for which workmen agitated are not ordinarily to be found in the terms of the
contract of employment. They are demands for something beyond the terms of the agreement between the parties, to meet the ever-advancing
ideals of the public with regard to the conditions under which the employees should work.
It should not be necessary to discuss this matter at greater length; but since it has been made the main plank of the argument of the learned
Counsel for the management, as well as of the judgment of the learned Judge, it would perhaps not be out of place to refer to two authoritative
volumes, one of which has been issued by the International Labour Office. There is a paucity of Judicial decisions on this point, although we find
scattered dicta here and there amongst the reports. One does not expect many judicial rulings on this question in the English reports; because it is
presumed in England that the questions that arise out of the dispute between management and labour do not spring from existing contracts, but
from demands for better terms. There is, however, one case which has been quoted in the judgment under appeal and in the decisions of the
Bombay and Calcutta High Courts, viz., The National Association of Local Government Officers v. Balton Corporation (1943) A.G. 166 of the
Local Government Staffs (War Service) Act, 1939, made provisions permitting local authorities to make up the remuneration of their employees
who had undertaken War Service in the forces of the Crown or in civil defence to the level of the remuneration which they would have received if
they had continued to serve in their civil capacity; but there was no obligation under this section for them to do so. The employees demanded of the
Bolton Corporation that their salary should be made up as permitted by Section 1 of that Act; but the Corporation refused to do so, whereupon
the employees, under the conditions of Employment and National Arbitration Order, 1940, referred the matter as a Trade dispute. It was there
argued that since there was no obligation on the Corporation to make up the salaries to what they would have been had the employees continued
to serve in a civil capacity, the Tribunal could not enforce it. The argument put forward there, as here, though in a different way, was that the
Tribunal was bound to apply the law. At page 187, Lord Wright stated:
There was here, I think, a ""trade dispute"" within the jurisdiction of the Tribunal. It is true that the respondents, in consequence of the reference by
the Minister of the dispute to the Tribunal may have an award made against them....
It was held that a Tribunal could consider whether it would direct the Corporation to make a payment to its employees, despite the fact that no
legal obligation lay upon the employers to do so.
At page 6 of "" Conciliation and Arbitration in Industrial Disputes"", a publication of'' the I. L. O., we find the following passage:
For the settlement of collective disputes of this kind it is not a question of applying and interpreting existing law, but rather of finding first of all the
equitable basis according to which these disputes should be regulated. The aim of each party is to make the standard as favourable for itself as
possible, as for instance when a workers'' organisation endeavours to obtain the highest possible evel of wages. In essence, this is the same
distinction as is made in international law between legal disputes on ihe one hand and political disputes or struggles for power on the other.
At page 19 of the same book we find this observation:
On the whole, however, the basic policy of separate treatment of the administration of Justice (application of law) on the one hand and the
settlement of disputes (creation of law) on the other is almost everywhere either explicitly or implicitly recognised. Despite the fact that the
conciliation and arbitration institutions are often actually described as Courts...they are sharply distinguished from the ordinary Courts of Law.
Again, at page 90:
... the function of conciliation and arbitration is to establish a compromise between the interests of the parties to a dispute and create a new basis
for their mutual relations,-that is to say, to make law and not, as in the judicial settlement of a dispute on rights, to interpret it. The result is that the
elucidation of the facts plays two very different parts in the two types of procedure. In a case in civil law the object is to establish the facts of the
case, on which the Judge bases his decision in application of the law; but in disputes on collective interests, knowledge of the circumstances is
needed to enable the conciliation or arbitration institution to form an opinion as to what regulation of the dispute will first be voluntarily adopted by
the parties, or what compulsory solution is likely to be the most just, if need be with due reference to public interests. In the first case, therefore,
elucidation of the facts is the basis for a settlement of the legal position by a Judge; in the second, it is the basis for the creation of fresh law,
whether in the form of an agreement between the parties or of a solution imposed by the Court or board on its own authority or directly by the
State.
At page 127, in discussing legal remedies against conciliation and arbitration decisions, the learned author says:
This characteristic limitation of a conciliation proposal''s force as a final judgment is another manifestation of the difference between conciliation and
arbitration proceedings on the one hand and judicial proceedings on the other. The latter deal with disputes on rights, existing law is expounded
and applied, and judgments given are of a different nature and far more final. The settlement of disputes on collective interests by conciliation and
arbitration is in fact less a judicial than an administrative and even a legislative function of the State, and in its performance the principles of civil law
concerning finality can be applied only after careful adaptation to the special needs of this branch of law.
In Chapter VII, page 131, the learned author, dealing with "" Conciliation and Arbitration as Contrasting Principles,"" makes the following
observation:
First of all, it may be useful to recall what is in general the object of conciliation and arbitratation in trials of strength between workers and
employers concerning the regulation of labour conditions. The essential object is to arrive, by recourse to a given form of procedure, at the legal
regulation which is always necessary for the maintenance of peaceful relations between parties, i.e., without open conflicts such as are likely to
interrupt production and entail other dangers. The problem is similar to that of the peaceful regulation of the conflicting interests of States, and
similar also to that before a national constitution in its widest sense. Such a constitution must provide the legal basis for the combination of rival
groups in one unit of life and labour, the commonwealth; it must arrange for the adjustment of their conflicting interests within the unit, and at the
same time ensure the legal continuity of its own existence by adapting itself to changing needs and forces, so as to avoid subversive violence.
The above passages set out the contrast between the scope of commercial arbitration and the ordinary Courts of Law on the one hand and the
settlement of trade disputes on the other, the latter having little or nothing to do with existing law which binds the parties.
In Volume one of "" Labour Disputes and Collective Bargaining,"" by Ludwig Teller, we find passages which bring this out even more clearly.
In Chapter Eleven, "" Arbitration Agreements "" we find the following observation at page 534:
The kernel of the distinction between commercial and industrial arbitration is said to be found in the fact that commercial arbitration is an aspect of
the administration of justice, and, more particularly, a substitute for the judicial process, while the arbitration of labour disputes is more often an
extension of the process of collective bargaining.
At page 536, the learned author goes on to say:
Then too, industrial arbitration may involve the extension of an existing agreement, or the making of a new one, or in general the creation of new
obligations or modifications of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and
disputes relating to existing agreements.
In the following page, in dealing with various statutes drawn up for the adjustment of labour controversies, it is pointed out that:
their application is limited to the settlement of existing disputes, they find their source not so-much in thoughts intended to implement the
administration of justice, but rather in public policy designed to keep the peace, and they are generally hybrids of conciliation and mediation.
Further down, the learned author says:
Compromise by contending advocates rather than justice by impartial men is thus the purpose of the procedure adopted under such statutes.
We are in entire agreement with the views expressed in the above two volumes; and so it is unnecessary for us to consider the cases quoted by
the learned advocate for the management dealing with the obligation of an arbitrator in a commercial dispute to apply the ordinary principles of law
unless the arbitration agreement makes it clear that the law should not be applied.
Although we are not disposed to repel an argument that in construing a statute we should presume that the ordinary law of the land is to be
applied unless the statute makes it clear that the ordinary law is to be abrogated and that we should not lightly read into it a power in anybody to
deprive parties of their freedom to contract or take away from them existing rights; yet we cannot ignore the history of Industrial Legislation or
overlook the circumstance that the Legislature now frequently passes legislation which interferes with freedom of contract and takes away from
persons their existing rights. We need only refer in passing to such legislation as "" the Madras Estates Land Act"", ""The Madras Agriculturists''
Relief Act"", ""The Usurious Loans Act"", ""The Malabar Tenancy Act"", ""The Rent Restriction Act,"" to say nothing of such pending legislation as "" The
Abolition of the Zamindaries Act."" It is incumbent on a Court in construing a statute to look at the general purpose of the Act. Not only does Act
XIV of 1947 follow in a general way similar legislation in England, but it follows and extends the existing law in this country. Similar provisions to
those found in Act XIV of 1947 were to be found in Rule 81(a) of the Defence of India Rules, which, however, was applied only for maintaining
supplies and services essential to the life of the community. The application of these rules was extended by an Ordinance after the termination of
the war and kept in operation until the present legislation was passed. In the statement of objects and reasons for the present Act, it is stated that it
was considered desirable to extend the principle of conciliation and arbitration to industries other than those covered by the Defence of India
Rules. In India, as in England, all the various questions that have arisen in the present dispute, have been adjudicated upon under earlier Acts and
Ordinances. The records of various references to arbitration under the Defence of India Rules show that these questions were being considered
and adjudicated upon by the various ''Tribunals set up by the Government; and so when the present Act was drawn up it is reasonable to presume
that the Legislature intended, since the language used is very similar to that found in the Defence of India Rules and since the statement of Objects
and Reasons in the present Act makes this clear, that under the present Act Tribunals should have the same powers of deciding these questions as
they had under the Defence of India Rules.
The learned advocate for the management has placed some reliance on the word "" adjudication "" in Section 10(1)(c) of the Act. That section
runs:
If any industrial dispute exists or is apprehended, the appropriate Government may, by order in writing...refer the dispute to a Tribunal for
adjudication.
We may, however, in this connection refer to the preamble to the Act which does not use the word "" adjudication,"" but says :"" Whereas it is
expedient to make provision for the investigation and settlement of industrial disputes, and for certain other purposes hereinafter appearing....
We are not prepared to attach any significance to the use of the word "" adjudication "" and its etymological connection with the word ""Judge."" It is
erroneous. to think that a judge can decide only according to the general law of the country. If so required by a statute, he may apply any
standards for his decision, such as fairness and reason, rather than the commom law. Ramesam, J., in Venkatanarasimha Rao Bahadur v. The
Municipal Council of Narasaraopet (1930) 60 M.L.J. 260, refers with approval to a dictum of May, G.J., in Reg v. Dublin Corporation L.R.
(1878) 2 Ir. 371, to this effect:
In this connection the term ''judicial'' does not necessarily mean acts of a Judge or legal Tribunal sitting for the determination of matters of law, but
for the purpose of this question a judicial act seems to be an act done by competent authority, upon consideration of facts and circumstances, and
imposing liability or affecting the rights of others. And if there be a body empowered by law to inquire into facts, make estimates to impose a rate
on a district, it would seem to be that the acts of such a body involving such consequence would be judicial acts.
We see no reason to think that any decision arrived at by a Judge in exercise of his powers of settling a dispute between the parties by granting to
employees what he thought fair and reasonable, outside the terms of the existing contract, enforcing terms which he thought necessary to preserve
industrial peace and in consonance with present public opinion, would not be as much an adjudication as if he were deciding a question of law and
fact in an ordinary civil suit.
One of the arguments of the learned Counsel for the management, which found approval in the judgment of the learned Judge, was that one
should read Act XIV of 1947 with Act XX of 1946. This argument overlooks the fact that Act XIV of 1947 is a descendant of Rule 81(a) of the
Defence of India Rules and similar English legislation. It does not flow out of Act XX of 1946. Since however, this argument has found acceptance
with the learned Judge, it is necessary for us to consider in some detail the provisions of Act XX of 1946. The preamble of this Act reads:
Whereas it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them
and to make the said conditions known to workmen employed by them....
Other provisions of this Act show that it is what it purports to be in the preamble; i.e., an Act designed to make clear to the workmen most of the
terms of their contract with the management, other than wages; so that they may know precisely what their rights are and what, by implication, they
are not entitled to under their existing contracts. This is made particularly clear by Section 4, which provides for the certification of Standing
Orders. The general procedure is for the management to draw up draft Standing Orders, that the workmen, should have an opportunity of stating
their objections to them, and that the certifying officer should then certify the orders with such modifications as he thinks necessary. In doing so, as
will be seen by Section 4, it is his duty to see that provision is made in the Standing Orders for every matter set out in the schedule to the Act and
that the Standing Orders are otherwise in conformity with the provisions of the Act. It is expressly stated in that section that
It shall not be the function of the certifying officer or appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any
Standing Orders.
In other words, the Certifying Officer has no power to add to, or extend the rights of the workmen; but merely to see that existing rights are
clearly expressed in the Standing Orders, whether they are reasonable or not. Neither the Certifying Officer nor the appellate authority has any
power to interfere with the existing contract between the workmen and the management. They can only ensure that all the existing rights of the
workmen find expression in the Standing Orders. It is noteworthy that although in this Act provision is made for the employers to have additions
and changes made to the Standing Orders, no such right exists in the employees. Section 10(1), by implication, permits of the Standing Orders
being modified at any time by agreement between the employer and the workmen, and Section 10(2) permits an employer to apply to have them
modified. It is thus seen that the purpose of this Act is very circumscribed and has, for its sole purpose, the clarification of the existing contract
between the parties and affords no machinery at all for the changing of existing conditions in pursuance of an industrial dispute.
We may now discuss the various heads of dispute between the parties set out in the second paragraph of this judgment, and consider whether
under any one of them the Tribunal has no jurisdiction to make any enquiries. We will take up first the question of re-instatement, which is one of
the most vexed questions that has arisen between the management and labour and which has come up most for discussion in judicial decisions.
There can be little doubt, upon reading the definition of"" Industrial Dispute,"" that this question of whether a workman should be, or should not be,
re-instated, is one that comes under the title of "" Industrial Dispute."" That expression is denned in Section 2(k) as:
Any dispute or difference between...employers and workmen...which is connected with the employment or non-employment...of any person.
A workman is so defined in Section 2(s) as to include a workman discharged during the dispute; so that if a dispute has arisen between the
management and the workers and any person is discharged during the course of that dispute, then that workman is entitled to bring the matter
before the Government for reference to an Arbitration Tribunal. The dismissal of a workman, whether before or during the dispute, may also be the
subject of a dispute between the management and workmen not dismissed.
The chief argument against the claim of the Tribunal that it can order in suitable cases the re-instatement of workmen is that there is no
provision in the statute or otherwise under which the re-instatement of a workman can be enforced, and that in the administration of the law of
Equity, no Court would order an employer to re-employ a workman, the only remedy of a person improperly dismissed lying in damages. As
regards the second part of the argument, we have already made it abundantly clear that in arbitrating in an industrial dispute, the Tribunal is not
ordinarily concerned with the administration of law, but with the settlement of a dispute that has arisen between the management and its workmen.
There is also no force in the argument that there is no means provided in the Act or otherwise for compelling the management to re-employ the
workmen; for it is often the case that the Court has no direct means of enforcing its decisions; for example, a Court may order restitution of
conjugal rights; but the only method of enforcing it is by way of contempt if the injunction of the Court is not obeyed. This is also the case with
regard to many other mandatory decrees passed by Civil Courts. This difficulty of enforcement does not however prevent the Court from passing a
decree. The same argument would apply to the claim of a Tribunal to a right to enhance wages. No method is provided under the Act for
compelling the management to pay higher wages; but if it does not do so, the Government can prosecute the employer; and the employer would be
liable to be punished with a fine, which may extend to two hundred rupees, and in the event of a second or subsequent conviction with fine which
may extend to five hundred rupees. It has been pointed out that this fine is so small that it could not have the practical effect of compelling the
management to do something in accordance with the award; but it is not reasonable to base any argument upon the extent of the punishment. The
case of the management is largely based upon Rex v. The National Arbitration Tribunal, ex parte Horatio Crowther & Co., Ltd. (1948) 1 K. B.
424, where it was held that the award directing the re-instatement of workmen was made without jurisdiction and must be quashed. The learned
Judges pointed out that under the law a Court would not order an employer to employ workmen and that the Legislature did not intend that an
employer in an industrial dispute should be compelled to do so was clear from the fact that there was no means of compelling the employer to do
so, because no penalty was provided.
Rule 2(5) of the Conditions of Employment and National Arbitration Order, 1940, upon the interpretation of which this decision was made
reads:
Any agreement, decision or award made by virtue of the foregoing provisions of this Article shall be binding on the employers and workers to
whom the agreement, decision or award relates and...it shall be an implied term of the contract between the employers and workers...that the rate
of wages to be paid and the conditions of employment to be observed under the contract shall be in accordance with such agreement, decision or
award....
Thus a provision is made for the embodying of the award in the contract of employment, in so far as it relates to wages and conditions of
employment, but not to the re-instatement of the dismissed workmen. In an important particular, Act XIV of 1947, differs from the English
Statutes; for Section 29 makes provision for the punishment of any person who commits a breach of any term of the award. The learned trial Judge
relied on and followed the decision of Goyajee, J., of the Bombay High Court on this question of re-instatement; but the decision of Coyajee, J.,
was appealed against; and we have had the advantage which the learned trial Judge, had not, of reading the appellate Judgments which reversed
the decision, of Coyajee, J. We have also had the advantage of reading the judgments of the Calcutta High Court in the matter of an application
and In the matter of the Indian Pulp Company, Limited (not yet reported) which deals with this question of re-instatement. In these cases it was
held that whatever might be the state of the law in. England, arbitration tribunals in India can order the re-instatement of a dismissed workman.
Chakravarti, J., had the opportunity of reading the judgment of the learned trial Judge in this case; and although we cannot approve of the manner
in which the learned Judge has expressed his views, we agree with his general line of argument.
There has been some discussion based on the wording of the Standing Orders of the Chrome Leather Co., Ltd., with regard to the termination
of service. The relevant order is to the following effect:
Employees who strike thereby terminate their respective contracts of service. If they are allowed to return to work they will be re-employed on
new contracts on such terms as may be agreed.
An employee who is absent without leave for more than 8 consecutive working days will be deemed to have left the Company''s employment
without notice. He may apply for re-instatement on showing good cause and each case will be decided on its merits.
It is argued that according to these orders, a person automatically ceases to be an employee if he is absent without leave for more than eight
consecutive days or goes on strike. In the Standing Orders the use of the word "" dismissed "" has been avoided; but we must regard the substance
of these orders and cannot agree that because the use of the word "" dismissed "" is avoided, that the employees are never dismissed. The
termination of service against the wishes of the employee is a dismissal. The two paragraphs in the Standing Orders referred to above obviate the
necessity of any notice being given by the management to the employees; but the termination of their service, whether with or without notice, is a
dismissal. The purport of these two paragraphs is that a man who strikes must regard himself as being dismissed without notice, as must a person
who absents himself without leave for more than eight consecutive working days. If persons strike in pursuance of an industrial dispute, the
termination of their service makes them, dismissed workmen who are entitled to have their dispute with their employers adjudicated upon under the
Act.
The second group of disputes relates to bonus, gratuity, pension, provident fund, and Pongal presents. The general argument with regard to
these items is that they are ex gratia payments and can be given or withheld by the management at their pleasure. Here again, the general principle
followed by the learned Judge is that the Tribunal cannot compel the management to give what they are not legally bound to give. That contention
has been dealt with fully in the earlier paragraphs of this judgment and it is unnecessary to repeat the discussion here. The granting of bonuses,
gratuities, pensions, and the like to employees is not out of charity. They are given in order to make labour more contented, and form part of the
remuneration of the workers for their services. Bonuses, for example, may in one sense be regarded as a recognition of the right of the workers to
share in some measure in the profits of the company and encourages workmen to work harder, in the knowledge that by doing so they will secure
more gain to themselves. Payments of gratuities, pensions, and provident fund may be regarded as deferred wages, payable upon retirement, and
affording a means, which the individual worker may be unable to do for himself, of putting by a little to provide for the days when he will no longer
be able to work. In the same way, presents given at Pongal may be regarded as deferred wages payable annually at a time when custom and
necessity require that new clothing should be purchased. The question whether a bonus can be awarded by an Industrial Tribunal has come up for
decision in many cases : for example, it was the subject of discussion in National Association of Local Government Officers v. Bolton Corporation
(1943) A.C. 166, referred to above. At page 187, 36. Lord Wright said:
This payment, if made, cannot properly, in my opinion, be regarded as a mere gratuity. Though there is an element of bounty in it, the bounty, if
granted, is given for good reasons of national policy, If the employees insist, as a term of their contract, that the respondents should promise to
make the payments in the appropriate event and if the respondents should promise to do so, there is a promise on each side on the part of the
respondents to make the payments, on the part of the employees to continue to work. The risk of a strike is avoided. But if the respondents refuse
to give the promise, there is then a difference connected with the conditions of employment. I do not see why this does not fall within the definition
of a trade dispute in the Act, just as much as a dispute as to the rate of wages or salary...It is obvious that a dispute as to what the remuneration
should be can properly be described as a trade dispute under the order.
The learned trial Judge referred to and dissented from a decision of the Bombay High Court in Indian Hume Pipe Co. v. Nanavaty ILR (1946)
Bom. 915, in which the decision of the trial judge that the consideration of payment of bonus was within the jurisdiction of the Tribunal was
confirmed in appeal. Bhagwati, J., said:
I am of opinion that it would be open to the workmen to contend that the payment demanded by the workmen from the employer was a payment
as of right; a payment which could be made by the employer not as a matter of grace but as extra remuneration for the work done by the employee
under a. contract express or implied, and if a demand was made by the workmen for such payment from the employer and the employer refused to
make such payment, there would arise a trade dispute.
The learned Chief Justice in appeal referred to the demand of the workers for a bonus equal to 1/6th of the earnings from January 1 to December
31, 1944, and the refusal of the company to pay, and said:
In my judgment as soon as the appellant company refused to comply with this demand which it was in its unfettered discretion to grant, it is quite
impossible to say that there was no dispute or difference between the employers and their workmen which was connected with the terms of
employment....But even accepting that the primary meaning of the word ''bonus'' is ''gift'' or ''gratuity'', it is not asked in this case as a matter of
patronage or bounty. It is demanded, and strike action is threatened, if such demand is not complied with. So that as soon as the demand is
dcclined, all the elements of a trade dispute arise.
This case was sought to be distinguished by the learned Counsel for the management, as being a case in which the workers had expressly stated
that the management had agreed to pay bonus; but it is seen from the passage just quoted from, the judgment of the learned Chief Justice that his
conclusion was not based upon any promise, but upon the demand made by the workers and the refusal of that demand by the employers. The
learned trial Judge, in commenting on this judgment, stated that the words of the learned Chief Justice are not very clear and that he did not think
that the learned Chief Justice meant to lay down such. a wide proposition. We feel that the learned Chief Justice carefully weighed his words; and
we are in entire agreement with the opinion expressed there. The question of bonus arose for decision in the Calcutta High Court in the case above
referred to, viz. In the matter of an application and in the matter of the Indian Paper Pulp Company, Limited (not yet reported), the learned Chief
Justice said with regard to the claim for a bonus:
... In my view such a claim is not necessarily a claim as a gratuity. It is a claim that the workmen should be entitled as of right to these payments in
certain circumstances. If that be so, it appears to me that a dispute relating to the payment of such a bonus can well be regarded as a dispute
relating to the terms of employment and therefore an industrial dispute within the definition of that term in Section 2(k) of the Industrial Disputes
Act.
Then again:
Mr. Atul Gupta on behalf of the workmen contended that as the payment of a bonus could be a term of employment there was clearly an industrial
dispute. He urged, and I think rightly, that it was immaterial that the present terms of employment did not contemplate the payment of a bonus. All
that was required to constitute an industrial dispute was a claim that the terms of employment should in future contain provisions for the payment of
a bonus and, if necessary, the payment of a bonus in respect of past years. In my judgment the reasons given in the Bolton Corporation Case
(1943) A.C. 166...apply with equal force to this claim for bonus.
Later on, the Chief Justice observed:
It was further contended that a bonus by way of profit sharing could never be anything but a gratuity as the amount of the bonus could not be fixed
until the net profit of the particular undertaking had been ascertained....In my view however a claim by workmen that they should be entitled to
some share of the profits by way of bonus can be made a term of employment or of a contract of service. That being so, a dispute relating to such
a claim can be an industrial dispute.
We respectfully agree and are of opinion that the Tribunal can consider these claims.
The third category of dispute between the parties relates to the provision of houses, the re-opening of a school, the provision of text-books
and the like, and other amenities. It is difficult to draw any hard and fast line between this class of demand and those contained in the second
category. The reliefs asked for arise indirectly from the employment of the workmen and the consequent necessity of their residing within a
reasonable distance of the workshop with a concomitant need for the provision for the schooling for their children, and reasonable provision for the
maintenance of their health and their recreation. In their application to this Court, the management has given a number of cogent reasons why the
demands of the workmen should not be acceded to; but it is not the duty of this Court to consider the reasonableness or otherwise of the demands
made by the workmen. The Tribunals are presided over by gentlemen who have distinguished themselves in the Judicial department; and one can
feel assured that in considering whether these demands can be acceded to, their reasonableness will be the prime consideration. The claims will no
doubt be rejected unless reasonable. For example, in considering whether the provision of housing for the workmen is unnecessary or
unreasonable, the Tribunal will doubtless consider whether suitable housing is available in the vicinity and whether the employers have available
land on which they can conveniently construct dwellings. With regard to the demand for the opening of a school, the Tribunal would ordinarily
reject the demand if there was suitable provision in the neighborhood for the education of the children by public bodies or otherwise.
On all the headings, therefore, we are of opinion that the Industrial Tribunal appointed by the Government has jurisdiction to consider the
questions referred to it. The appeal is therefore allowed, the order passed by the learned trial Judge set aside, and the application dismissed. All
parties will bear their own costs In both the Courts.