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Judgment
P. Jyothimani, J.—These writ petitions are directed against the award passed by the Industrial Tribunal, Chennai in I.D. No. 29 of 2006
dated 12.02.2009, refixing the wages of workmen of Hosur Bata Employees Union. While W.P. No. 4938 of 2009 is filed by the management of
Bata India Limited, W.P. No. 5833 of 2009 is filed by the workmen who made the claim before the Industrial Tribunal.
Bata India Limited is a multinational Indian subsidiary company and leading manufacturer of footwears having its Head Office at Gurgaon,
Haryana. It has factories in India at Bangalore, Calcutta, Delhi, Faridabad, Hosur and Mokamehghat in Bihar and it has about 1600 showrooms of
its own in the country and 2000 showrooms run by its dealers. That apart, there are many number of retail footwear shops.
2(a). The issue involved in the award relates to the wages of workers in Hosur factory of Bata India Limited. The Hosur factory is said to have
been started in March, 1994 engaged in the manufacturing of shoes and sandals for men and women including the premium quality footwears such
as, Hush Puppies, Hush Puppies Z Strap, Pinoso, Pinoso Wallapy, Pinoso New, Bounce 1, 2, 3, Ananda Bounce, Wind Classic, Flesmoc, Gap,
Ambassador, Top, Ladies Massagio, Ladies Sandal, Dr. Scholl, etc.
2(b). It is stated that there are 124 permanent workers in the said manufacturing unit and 22 permanent managerial staff. That apart, there are 9
apprentices, 25 casual workers and one managerial staff engaged on contract basis, 12 security personnel and 14 housekeeping personnel in the
factory and one Ayah who works in the creche in the factory.
2(c). The Hosur Bata Employees Union, Hosur, is a registered Trade Union of workers of the factory at Hosur, which is stated to be the only
Trade Union, in which all the 124 permanent workers including 84 female workers are members and the Union was formed in the year 1997. It is
stated that the Union entered into various settlements with the management in respect of service conditions of the workers in the Hosur factory and
the last of such settlement was dated 26.4.2004, which was in fact for a period of two years viz., till 31.3.2006.
2(d). It is stated that on 30.1.2006, the Employees Union issued notice to the management of their desire to terminate the settlement and on
8.2.2006 the Union raised fresh charter of demands. There were bilateral negotiations between the management and the workers Union in respect
of the charter of demands before the Labour Officer, Krishnagiri, which failed to bring in a settlement and the Conciliation Officer sent his failure
report on 20.9.2006, pursuant to which the Government issued G.O.(D) No. 788 dated 09.11.2006, referring to the following issues to the
Industrial Tribunal for a decision:
(a). Whether the demand of the petitioner union that the basic wage for all the grades be increased by Rs. 4000/- is justified? If so, to what relief is
the petitioner entitled to?
(b) Whether the demand of the petitioner union that the fixed D.A. be increased from Rs. 850/- to Rs. 3000/- is justified? If so, to what relief is the
petitioner entitled to?
(c) Whether the demand of the petitioner union that the variable D.A. be calculated on quarterly basis at the rate of Rs. 20/- per point is justified?
If so, to what relief is the petitioner entitled to?
(d) Whether the demand of the petitioner union that the House Rent Allowance paid to the workers be increased from Rs. 275/- to Rs. 2000/- is
justified? If so, to what relief is the petitioner entitled to?
(e) Whether the demand of the petitioner union that the Washing Allowance paid to the workers be increased from Rs. 75/- to Rs. 500/- is
justified? If so, to what relief is the petitioner entitled to?
(f) Whether the demand of the petitioner union that the Good Will Allowance paid to the workers be increased from Rs. 278/- to Rs. 1000/- is
justified? If so, to what relief is the petitioner entitled to?
(g) Whether the demand of the petitioner union that the Annual Extra paid to the workers be increased from Rs. 62/- to Rs. 500/- and be paid in
the month of January is justified? If so, to what relief is the petitioner entitled to?
(h) Whether the demand of the petitioner union that the Snacks Allowance paid to the workers be increased from Rs. 220/- to Rs. 520/- is
justified? If so, to what relief is the petitioner entitled to?
(i) Whether the demand of the petitioner union that the workers involved in hard work be paid a Skill Allowance of Rs. 2000/- per month is
justified? If so, to what relief is the petitioner entitled to?
(j) Whether the demand of the petitioner union that the number of working days be reduced from 6 days to 5 days a week and that the working
pattern be determined by discussions between the management and the union is justified? If so, to what relief is the petitioner entitled to?
(k) Whether the demand of the petitioner union that the workers be paid Conveyance Allowance of Rs. 50/- per day is justified? If so,to what
relief is the petitioner entitled to?
(l) Whether the demand of the petitioner union that the workers who are asked to report for work prior to their shift timings be paid a shift
allowance of Rs. 25/- per day is justified? If so, to what relief is the petitioner entitled to?
(m) Whether the demand of the petitioner union that the workers be paid a Hill Station Allowance of Rs. 750/- per month is justified? If so, to
what relief is the petitioner entitled to?
(n) Whether the demand of the petitioner union that the workers be paid a sum of Rs. 120/- towards Service Weightage is justified? If so, to what
relief is the petitioner entitled to?
(o) Whether the demand of the petitioner union that the workers be given one month''s wage as festival advance is justified? If so, to what relief is
the petitioner entitled to?
(p) Whether the demand of the petitioner union that the workers be provided one Sweater and one Jerkin worth Rs. 1000/- every year is justified?
If so, to what relief is the petitioner entitled to?
(q) Whether the demand of the petitioner union that the workers be given casual leave for 15 days and sick leave of 10 days is justified? If so, to
what relief is the petitioner entitled to?
(r) Whether the demand of the petitioner union that the workers be paid a Medical Allowance of Rs. 6000/- per annum is justified? If so, to what
relief is the petitioner entitled to?
(s) Whether the demand of the petitioner union that the workers be provided 3 sets of uniform (Pant and shirt for male workers and Churidhar for
female workers) with stitching charges is justified? If so, to what relief is the petitioner entitled to?
(t) Whether the demand of the petitioner union that the workers be provided 2 pairs of shoes/sandals and 2 pairs of socks of Bata Shatak make
every year is justified? If so, to what relief is the petitioner entitled to?
(u) Whether the demand of the petitioner union that the workers be paid a Heat Allowance/Dust Allowance of Rs. 250/- per month is justified? If
so, to what relief is the petitioner entitled to?
(v) Whether the demand of the petitioner union that the workers exposed to chemicals be paid a Chemical Allowance of Rs. 50/- per day is
justified? If so, to what relief is the petitioner entitled to?
As far as the first demand of increasing the basic wages by Rs. 4000/- in respect of all grades, it is stated that there are three grades among the
operators in the factory. A-Grade operators consist of 4 persons of the employees Union while B-Grade operators consist of 95 members and C-
Grade operators consist of 25 members. A-grade operators are drawing basic wages of Rs. 1520/- p.m., B-Grade operators are drawing basic
wages of Rs. 1320/- p.m., and C-Grade operators are drawing Rs. 1120/- p.m. and the overall present pay package for A-Grade operators is
stated to be about Rs. 5495/- p.m. including the production incentive of average of Rs. 750-800 per month, plus bonus of average of Rs. 80-90
per month and the payment made towards ESI/PF. The overall present pay package for B-Grade operators is about Rs. 5295/- per month
including production incentive of average of Rs. 600-700 p.m., plan bonus of an average of 80-90 p.m. and the payment made for ESI/PF and in
respect of C-Grade operators, the present pay package is Rs. 5095/- p.m. including the production incentive of Rs. 600-700 p.m., plan bonus of
Rs. 80-90 p.m. and the payment made towards ESI/PF.
3(a). The increased basic wages of Rs. 4000/- is claimed on the basis that overall pay package of workers in Hosur factory is lower than the
workers in other factories of Bata India Limited except the factory at Peenya, Bangalore, where it is stated that the pay package is similar to that of
Hosur factory. The claim is made on the basis that the cost of living in Hosur is higher since several leading industries are having their manufacturing
units there, that I.T. Corridor, Bangalore is located en route Hosur, that it is a hilly area and that even though there are no comparable footwear
industry in Housr, there are other factories, where the basic wages is paid much more, while the turnover and profit margin of Bata India Limited at
Hosur is the same as that of other industries. A reference about various industries in Hosur other than shoe manufacturing industries like, TTK
Prestige Limited, Titan Industries Ltd., Avtec Ltd., Hindustan Power Plus Ltd., Luk India Ltd., TVS Motor Company Ltd., Easun, Rayrolle (P)
Ltd., Exide Industries Ltd., Asia Tobacco Co. Ltd. and Kanthal Ltd. are indicated to show that more basic salary is being paid to their workers. It
was, based on the same, increase in the basic wages has been demanded by the Hosur Batta Employees Union.
3(b). Likewise, demand has been made for the increase of Dearness Allowance (D.A.) from Rs. 850/- to Rs. 3000/-. It is stated that fixed
dearness allowance of Rs. 850/- p.m. is paid based on the settlement dated 26.4.2004, which is very low and not sufficient to lead a decent life
with family. In that regard also, the Employees Union has quoted various other factories in Hosur including Sundaram Fasteners Limited, where
fixed D.A. of Rs. 6385/- p.m. is stated to have been paid as per the settlement entered on 31.12.2004.
3(c). Likewise, the demand of variable dearness allowance calculated on quarterly basis at the rate of Rs. 20/- per point. It is stated that from
1995 onwards, the management has been paying dearness allowance at the rate of Rs. 4.93 for every additional increase in points and after the
settlement was entered on 19.8.1998, for the first time, the management started to pay both fixed and variable dearness allowance to the
workmen.
3(d). As per the settlement dated 19.8.1998, the variable dearness allowance calculated taking the base year 1982=100 per cent up to the
average of 358 CLI points : Rs. 4.93 per point of rise or fall; per point over and above 358 CLI points : Rs. 7 per point of rise or fall.
3(e). It has been the case of the Employees Union that the management has not paid the variable dearness allowance as per the settlement. The
complaint is that the management as per the agreement, having agreed to pay Rs. 4.93/- for every CPI point up to 358 points, has paid the said
amount for 253 to 358 CPI points and for 252 points, the fixed amount of Rs. 150/- has been unilaterally taken into consideration. By the
subsequent settlement entered on 26.4.2004, a ceiling limit was made up to Rs. 1640/- p.m. for continuation of neutralization and consequently,
the management paid Rs. 36.42 instead of enhancing variable D.A. by Rs. 126/-. The frozen rate which was imposed by the company which was
selling some of its lands and was not financially sound was in force only till 30.9.2006 and therefore, from 1.10.2006, the management has to pay
the additional amount of Rs. 89.58 per month towards variable dearness allowance. It is also stated that in other factories of Bata India Limited in
West Bengal, Bangalore and Delhi the variable dearness allowance has been given effect to on quarterly basis and in the showrooms also the
variable dearness allowance has been paid to the workers on half yearly basis and only in Hosur factory, the revision of variable dearness
allowance has been effected on yearly basis and therefore, the employees Union has demanded that variable dearness allowance has to be
calculated on quarterly basis at the rate of Rs. 20 per point.
3(f). Regarding the claim of increase in House Rent Allowance (H.R.A.) from Rs. 275/- to Rs. 2000/-, it is on the basis that in Hosur, getting
accommodation for such a low amount is not possible, especially when most of the members are married, having children and to have a decent
accommodation and hence, the claim of minimum of Rs. 2000/- per month towards H.R.A. has been demanded. The comparison has also been
made in respect of various industries in Hosur area in that regard.
3(g). Likewise, Washing Allowance is claimed to be increased from Rs. 75/- to Rs. 500/-, for which also the comparison with Avtec Limited,
Power Products Division, Hosur is made wherein, it is stated, an amount of Rs. 1600/- per month has been paid. It is stated that in Hindustan
Power Plus (P) Ltd., Hosur, the washing allowance is paid at the rate of Rs. 810/- p.m. and in Ashok Leyland Limited, Unit II, Hosur, it is paid at
the rate of Rs. 415/- p.m. and in Luk India (P) Ltd., it is paid at the rate of Rs. 295/- p.m. and in Kanthal Limited, Hosur, the washing allowance is
paid at the rate of Rs. 360/- p.m.
3(h). Regarding Goodwill Allowance, the claim is made to increase from Rs. 278/- to Rs. 1000/- on the basis of long, continuous, sincere and
dedicated service and loyalty of workers. In this respect also, the comparison with other companies in Hosur has been made.
3(i). Regarding the claim for increase from Rs. 62/- to Rs. 500/- in respect of Annual Extra payable to the workers, it is stated that presently in
January every year, the wages is increased by Rs. 12/- as annual extra and thereafter in the month of April, it is increased by Rs. 50/-. Thus, the
total amount of annual extra given is Rs. 62/- and that was given effect by way of settlement of the year 2004. Now, the claim is made for Rs.
500/- towards the annual extra to be paid once in the beginning of January of every year, instead of two instalments and comparison has been
made based on various companies in Hosur area. The same is the demand in respect of snacks allowance from Rs. 220/- to Rs. 520/- on the basis
that the workers in the factory in general shift are working from 8.30 am to 5.00 pm and that the 4 technicians in the factory are working by
rotation from 7.30 am to 4 pm and there is no canteen facility available to the workers.
3(j). In addition to the above said demands for increase, the claim of Rs. 2000/- per month is made as Skill Allowance for the hard work like, toe
lasting, heel lasting, roughing, cementing, sole pressing, pre-forming, sole stitching and leather cutting, which are all of mental strenuous. In that
regard, it is stated that special skill is required since the company is developing new models of footwears and skill is also required in cutting,
stretching and finishing footwears in new manner.
3(k). The next demand relates to the number of working days to be reduced from 6 days to 5 days a week on the basis that in all the factories of
Bata India Limited, except Peenya factory, Bangalore, the workers only work five days with both Saturday and Sunday being holidays and they
are working for 230 days in a year, while the workers in Hosur factory are working for 293 days in a year.
3(l). The further demand for conveyance allowance of Rs. 50/- per day is made on the basis that most of the workers are to travel nearly 10 km.
per day from their place of residence to the place of work and the Union has also quoted the instances of other factories in Hosur region paying
such conveyance allowance.
3(m). The other claim relates to the shift allowance of Rs. 25/- per day in respect of workers who are asked to report for work prior to their shift
time. The said demand is made on the ground of hardship faced by the workers. For example, on rotation basis, if a worker who has to report at
7.30 a.m. is called upon to report earlier, it is difficult for him to have breakfast, etc. The Union has also made a demand of hill station allowance of
Rs. 750/- per month on the basis that additional expenses are incurred in hill stations. It is quoted that other factories in Hosur are paying such
allowance. For example, Hindustan Power Plus Limited is paying Rs. 400/- per month and TVS Motor Company Limited, Hosur is paying the
allowance of Rs. 300/- p.m.
3(n). That apart, the Union has also claimed Rs. 120/- towards service weightage for the persons who are in continuous service for more number
of years, festival advance of one month wages, since, at present, during Deepevali festival an allowance of Rs. 2000/- is paid. The claim for
providing sweater and one jerkin worth Rs. 1000/- every year on the basis of climatic condition in Hosur region both during rainy season and cold
season. It is quoted that several other factories in the area are providing the said benefit.
3(o). The claim of casual leave for 15 days and sick leave for 10 days while, at present, the workers in Hosur factory are entitled for 7 days casual
leave per year and one day of privilege leave for every 20 days of work called as annual compulsory privileged leave, apart from 4 days bonus
holidays in the event of workers working for 240 days a year. That apart, at present they are given 9 days leave for national and festival holidays,
however, the workers are not entitled for any sick leave. Therefore, the claim for sick leave has been made.
3(p). In addition to that, a claim for Rs. 6000/- per year as medical allowance is made on the basis that E.S.I. coverage for medical facilities given
at present are inadequate, that there is no ESI hospital available in Hosur and that the doctors available are not able to treat major ailments. A
comparison is made with the benefits given by other industrial units in the area.
3(q). That apart, a claim for three sets of uniform pant and shirts for male workers and churidhar for female workers with stitching charges is made
quoting that most of the factories are providing the same. Further, the claim for two pairs of sandals, shoes and two pairs of socks for every year is
also made. In addition to that, the heat allowance/dust allowance of Rs. 250/- per month has been claimed based on the peculiar functioning of
workers in the process of shoe making. Chemical allowance of Rs. 50/- per day is also claimed since the workers are exposed to chemicals during
the manufacturing process.
The said claim of the Employees Union was resisted by the management before the Industrial Tribunal through its counter statement stating that
the primary importance is to improve the market for its products and therefore major part of its working capital is invested in marketing and based
on the demand in the market, new manufacturing units are opened and accordingly, after the first factory was started in Bata Nagar, West Bengal
in 1936, the manufacturing units were expanded at various places like, Batagunch in Bihar, Faridabad in Haryana, Peenya in Bangalore and it was
in 1994, the export oriented unit was started at Hosur. However, at that time, in Tamil Nadu various leather processing industries have come up in
large number and therefore, the international price for leather footwear was not remunerative to match the export price of Bata Limited, Hosur.
4(a). It was in those circumstances, in the year 1999, the management had to surrender its status as export oriented unit so as to divert its products
from Hosur unit to domestic market and by that time, there was mushroom growth of leather footwear manufacturing units in India in a large extent.
Even the international manufacturers of footwears had experienced their market having come down drastically. It is stated that most essential
component of shoe upper which requires special skill had become costlier, which resulted in the leading manufacturing units in India including Bata
India Limited to outsource the shoe upper, which necessarily required the saving in the labour cost. Therefore, the wage revision was depending
upon the marketing demand.
4(b). The first long term settlement with workmen at Hosur was entered on 19.8.1998 for three years by the increase in wages of Rs. 952/- per
month per workman and the settlement was in force till 18.8.2001. Since in the next three years, there was a set back, the next settlement was
arrived at only on 26.4.2004, by which there was a wage increase of approximately Rs. 1000/-. It is also stated that Hosur unit has the capacity to
produce 2500 pairs per shift and the productions are only high premium shoes and ultimately, it was not able to produce more than 700 shoes per
conveyor per shift. It was in those circumstances, the employer informed the workmen at the time of settlement on 26.4.2004 that the wages
beyond Rs. 1000/- could not be paid. However, it was agreed that certain incentive schemes can be implemented for the benefit of the workmen
to enable the employer to augment the production.
4(c). It is stated that the Government of Tamil Nadu issued a notification under the Minimum Wages Act, fixing the minimum wages for
employment in footwear manufacturing industries and as per the notification for the Consumer Price Index of the Chennai City, 1982=100 for
February, 2007 and the minimum wages is Rs. 1820/- (basic pay Rs. 1820/- and D.A. Rs. 1997 and the total would be Rs. 3817/-). As against
the said minimum wages prescribed by the Government, the lowest paid workmen in the Hosur unit was getting wages of Rs. 5345/- with various
other benefits and perquisites and therefore, according to the employer the wages paid is more than the minimum wages prescribed by the
Government.
4(d). It was the specific case of the management by way of counter statement before the Industrial Tribunal that the dispute seeking revision of
wages depends on the financial capacity of the employer taking into consideration the region-cum-industry principle as a relevant factor. It is also
stated that if, in a company, the workers of one unit raise a dispute, then the financial capacity of the employer of that unit alone should be the
criterion. It is stated that from the inception, the Hosur unit has been continuously incurring loss except in two years viz., 2004 and 2005 when a
marginal profit was earned. 4(e). It is also stated that the Bata company is a holder of the profit and after the tax in proportion to sales was ranging
from 3.94 percentage in the year 1999 to 2.05 and 0.52 percentage in the year 2000 and 2001 and it was a negative figure in the year 2002 and
2004, the capital turn over for the corresponding period was also 2.12 to 1.95 times, which is significantly low and there was no dividend declared
after 2001 and therefore, it is stated that the financial position of Bata India Limited at Hosur is in such manner which cannot bear any additional
burden by way of increase in wages.
4(f). It was also the case of the management before the Industrial Tribunal that other known footwear manufacturers in Tamil Nadu like, Florind
Shoes, KH Leathers, Nag Yang Shoes, Sara Leathers, Saleem Shoes, M.M. Company, Nag Leathers are employing more workers than Bata
India Limited, Hosur, out of whom, three were functioning even before Bata India Limited at Hosur was started and the daily output in respect of
some of them was high and the wages paid to their workmen are far lesser than the wages received by the workmen of Bata India Limited, Hosur.
Therefore, by applying the principle of region-cum-industry wise comparison, the employees union has not made out a case for wages revision.
4(g). It is also stated that the wages of workmen of Bata India limited in its manufacturing units are fixed based on negotiated settlements and
except South can ,wages of employees of all other units are lesser than the employees of Bata India Limited, Hosur. It is admitted that 124
workers are in Hosur unit, out of whom 84 are women employees. It is stated that among 84 women employees, spouses of 52 women employees
are working in reputed industries in Hosur and the earnings of the women employees are only a second source of income to their families. This
point was highlighted for the purpose that the productivity of women employees is not same when compared to men employees.
4(h). Regarding variable Dearness Allowance, it is stated by the management that the management on its volition in the year 1995 made an
increase in basic wages and started paying fixed allowance comprising of Rs. 150/- plus various dearness allowance at Rs. 4.93 for every point
over and above 252 points of the All India Consumer Price Index of Chennai City 1982=100. The management has also voluntarily introduced
H.R.A., goodwill allowance and washing allowance and instead of scale of pay with minimum and maximum and annual increment, the annual extra
was introduced and that was not automatic and subject to the satisfaction of management about performance.
4(i). It is stated that the negotiations were always for wage increase, as a package to be apportioned under the various components of wages and
therefore, the quantum of each component of wages was not agreed or determined or decided on any rational principle. It is also stated that it was
agreed for the period of settlement ending 30.9.2006 with maximum variable D.A. of Rs. 1640/- shall be maintained for the period from
1.10.2004 to 30.9.2006 and from 1.10.2006 the management released an increase of Rs. 140/- from 1.1.2007 and increase of Rs. 217/- by way
of variable D.A. and therefore, it is stated that the demand of revision of wages should be referable to the financial standing of the Hosur unit and
on the basis of region-cum-industry principle.
4(j). It is also stated that the demand of wage revision cannot be based on the wage structure in engineering and other industries in Hosur. It is also
stated that even if the increase of wages is considered, it must be a total package and should not be by item-wise and it was only based on that
way, two earlier settlements were entered. It is stated that if the demand of union item-wise is taken into consideration every worker will be entitled
approximately to Rs. 25,000/- per month which is 3 to 4 times more than the existing emoluments. A reference to increase of basic wages granted
in various industries is stated to be not relevant since those industries have nothing to do with the manufacturing of footwear or leather products.
4(k). Likewise, it is stated that the claim of fixed dearness allowance is made on the basis that the same was granted by other factories which are
not manufacturing the products made by Bata India Limited and hence, the same is not sustainable. It is also stated that in respect of variable
dearness allowance, the wages paid by the employer is more than the minimum wages fixed by the Government. Regarding HRA and washing
allowance, it is stated to be a package deal. That apart, it is stated that the goodwill allowance has no rational basis. It is also stated that the annual
extra is in lieu of annual increment in the scale of wages. It is stated that the snacks allowance goes with goodwill allowance and the skill allowance
has been in vogue since the inception of the factory and there is no necessity to have another allowance.
4(l). Regarding 5 days a week, a reference is made to the Factories Act, which permits the employer to require the employees to work for 8 hours
a day and if the claim of the Union is accepted, according to the respondent, it will amount to increase of wages by 16 2/3% which is not
justifiable. It is stated that there can be no shift allowance as the employees are working only one shift and Hosur is not a hill station and therefore,
no hill allowance is possible and it is not correct to state that the respondent is paying Rs. 2000/- as festival advance and on the other hand, the
respondent is paying only Rs. 1000/- as festival advance.
4(m). As far as the meeting of personal needs is concerned, the workman has to meet all his personal needs from his wages, providing of sweater
and jerkin does not arise and the present leave benefits are sufficient, fair and liberal and at present, the management is paying 4.75% as
contribution to ESI and that is an adequate protection to medical needs and presently, the management is providing working overcoat once in a
year, which is washed at the cost of management every week and it is more than sufficient and based on the environment, shoes or sandal are not
necessary for all except maintenance workmen for whom there is already provision for free supply of shoes. It is also stated that there is no
necessity for heat allowance since the working condition is normal and the workers working in cement are provided with mask and high velocity
fan for ventilation and driers are provided and therefore, the demands made by the Union in those heads are stated to be unreasonable.
Before the Industrial Tribunal, on behalf of workers Union two witnesses were examined, while on behalf of management one witness was
examined. On the side of workers, 29 documents were marked as Exs.W1 series to W29 while on the side of management 37 documents were
marked as Exs.M1 series to M37.
The Industrial Tribunal, after taking note of the pleadings, evidence and submissions made on the side of the respective parties, held that the
wage structure in respect of employees of Bata India Limited, Hosur has to be made from 1.4.2006 and passed the award. The operative portion
of the award is as follows:
In the result, award is passed holding that the petitioner Union is entitled for the following relief: From 1.4.2006 onwards.
1) Increase in the Basic wage : Rs. 750/-
2) Increase in V.D.A. : Rs. 1128/-
3) H.R.A. : Rs.1000 (Rs. 1275/-)
4) Increment is fixed as Rs. 40/-
for A Grade and Rs. 35/-
for B & C grade workers
from January 2009 onwards.
5) Snacks Allowance : Rs. 270 (Rs. 490)
6)SHSCHC (Adhoc) Allowance : Rs. 750/-
7) Conveyance Allowance : Rs.101/- (Rs. 10600/- A grade)
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Rs. 3999/-
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An Incentive Bonus 100% to be added along with the above said wages. (Minimum Rs. 900/- p.m. Work to be given for every worker for a
month).
8) The petitioners are entitled for One pair of Shoes with socks and One pair of Sandal for alternative years. All other issues have been answered
negatively. No costs.
Accordingly, the basic salaries of the Grades A, B and C employees stated above which were Rs. 1520/-, Rs. 1320/- and Rs. 1120/- have
been increased by an additional amount of Rs. 750/- with effect from 1.4.2006. In respect of the claim of fixed dearness allowance, the same has
been retained as Rs. 850/- which was already paid by the employer without any enhancement. In respect of variable D.A. paid at the rate of Rs.
2256/- for each of the employees of each grade, the same has been increased by a sum of Rs. 1128/-. The house rent allowance which was Rs.
275/- in respect of all classes of employees has been increased by a sum of Rs. 1000/- making it as Rs. 1275/- as against the claim of Rs. 2000/-
by the workmen. The increment is fixed at Rs. 40/- for Grade A, Rs. 35/- for Grade B and Grade C workers payable from January, 2009. The
snacks allowance which was Rs. 220/- for each of the employees in each grade has been increased by Rs. 270/- making the total Rs. 490/- as
against the claim of Rs. 520/- by the Employees Union. The conveyance allowance of Rs. 101/- has been granted. In addition to that SHSCHC
(ad hoc) allowance of Rs. 750/- has been granted. The other issues raised by the workmen are negatived by the Industrial Tribunal. In addition to
the incentive bonus of 100% and one pair of shoes with socks and one pair of sandals for alternative years has been granted.
7(a). The Industrial Tribunal, by referring to Ex.M2, salary structure, has found that the salaris paid to the workers in Grade ''A'' category at Rs.
9359/-; for Grade ''B'' at Rs. 9087/-; and for Grade ''C'' at Rs. 8804/- per month are insufficient and refixed the said salaries as per the award at
Rs. 10600/- for Grade ''A'' workers, Rs. 10500/- for Grade ''B'' workers and Rs. 10400/- for Grade ''C'' workers. The Tribunal also concluded
that the difference of salary approximately comes to Rs. 4584/-, Rs. 4684/- and Rs. 4794/- in respect of Grades ''A'', ''B'' and ''C'' workers
respectively.
7(b). In respect of the increase of Rs. 1128/- regarding variable D.A., the Tribunal has taken note of the fact that the workers are at present given
variable D.A. of Rs. 2254/-. The calculation is taken upto 252 points Rs. 150/- in between 252 and 358 points 106 x 4 =Rs.424/-. It has taken
the further points at the rate of Rs. 7/-; 598 - 358 = 240 points (106 x 4 = 424 + 240 x 7 =1680) totalling Rs. 2256/-. An increase of variable
D.A. was made for Rs. 1128/- by fixing the future calculation point as Rs. 7.25 per point ensuring the eligibility of the workmen in future as per the
increase of index points.
7(c). Before the Tribunal, both the management and workmen have filed a joint memo to the effect that both of them have agreed to continue the
incentive scheme which is in vogue and the plan bonus which is being paid and therefore, the Tribunal has not made any change in respect of them.
The above said award is questioned by the employer. As submitted by Mr. AL. Somayaji, learned senior counsel, the Tribunal has not chosen
to give proper reasonings for additional amount granted under the award in respect of wages. He would submit that Ex.W16, the wages slips, on
which reliance was placed by the Tribunal are relating to various other companies like, Avtec Ltd., Titan, Ashok Leyland, Lck India (P) Ltd.,
Titan, TVS Motor Co., Ltd., Exide and TTK Prestige, which are having factories in and around Hosur and they are admittedly not manufacturing
shoes as in the case of Bata India Limited and hence, the said wage slips are not proper for the purpose of fixation of wages. In this regard, he
would rely upon the judgments in Kamani Metals and Alloys Ltd. v. Their Workmen 1967 II LLJ 55; Greaves Cotton & Co., Ltd. and Ors. v.
Their Workmen 1964 I LLJ 342; French Motor Car Company Ltd. v. Their Workmen 1962 II LLJ 744; Indian Oxygen Ltd. v. Its Workmen and
Ors. 1963 II LLJ 83; Workmen of British India Corporation v. British India Corporation 1965 II LLJ 433; Workmen of Indian Oxygen v. Indian
Oxygen (1985) 3 SCC 177; Lipton Ltd. v. Their Employees 1959 I LLJ 431. Therefore, according to him, for the purpose of fixing wages, the
comparison should be made with the nearest shoe manufacturing units, whereas the Tribunal compared with the industries which are not in any way
connected with the manufacturing of shoes.
8(a). It is his further submission that under the impugned award, the Tribunal has given a finding about the capacity of the employer to make
payment on the basis that Directors salary has been increased which is not proper and without consideration of the real issue. It is his submission
that the mere reliance on balance sheet is not sufficient for the purpose of pay fixation and what has to be seen is whether there is expansion of
industry and whether the company is having the capacity to make payment by that unit. It is his further submission that the Tribunal has relied upon
a memorandum of settlement entered in Batanagar Unit in the year 2008 as exhibited in Ex.M.34, and Ex.M.36 which is the wages slip of Kolkatta
unit and according to him, the Tribunal has misconstrued the wage slip as an evidence for payment for every week, whereas the wage slip shows
that payment was made in a fortnight viz., once in two weeks, and therefore, the wages mentioned therein in respect of each of the workmen
related to six weeks while the Tribunal has construed it as wages for three weeks, which is a total misapplication of the exhibits. It is his submission
that the workmen have admitted that payment was made in Batanagar unit as per Ex.W-12 dated 06.09.2004, once in a fortnight and hence, the
finding arrived at by the Industrial Tribunal is basically on a mistaken notion.
8(b). It is his submission that the joint memo filed by the parties is not relating to incentive bonus, but to incentive scheme which is in vogue and
therefore, the direction to pay Rs. 1300/- per month as incentive bonus is a misnomer. According to the learned senior counsel, the method of
calculation followed by the Tribunal at para 61 is incorrect. He has submitted that the Tribunal having increased the variable D.A. to an extent of
Rs. 1128/-, has not chosen to discuss the reason based on which such increase has been made.
8(c). That apart, his submission is that the ad hoc amount of Rs. 750/- granted on the basis of SHSCHC has not been even explained as to what
are the heads under which such allowances are granted. Therefore, his contention is that the entire award in refixing the wages is liable to be set
aside on the ground that the Tribunal has assessed the same mistakenly by taking note of wage slips filed before it as weekly slip while the same is
for a fortnight and also on the ground that Ex.M.34 wage slip on which reliance was placed by the Tribunal relates to Bata Nagar, which is not
nearest and comparable or doing a similar business as that of Hosur unit. According to him, the incentive bonus directed to be granted at the rate
of Rs. 1300/- is a total misnomer since the joint memo relates to the incentive scheme which according to him is Re.1/- of basic pay of Rs. 99/-
and there is no discussion about the region-wise industries and comparable industries and no particulars have been given and the wages have been
increased based on Ex.M.34, which is not comparable to the Hosur unit.
8(d). It is his further submission that the Labour Court while deciding about the issue under Labour law does not pose as a benevolent despot and
he relied upon the judgment in J.K. Iron and Steel Co., Ltd., Kanpur v. The Iron and Steel Mazdoor Union, Kanpur AIR 1956 SC 231 and the
Constitution Bench judgment of the Supreme Court in New Maneckchowk Spinning and Weaving Company Ltd. v. Textile Labour Association,
Ahmedabad 1961 I LLJ 521. His submission is that the concept of social justice applies equally to both the employer and workmen. He would
rely upon the judgments in Crown Aluminimum Work v. Their Workmen 1958 I LLJ 1; Greaves Cotton & Co., Ltd., and Ors. v. Their Workmen
1964 I LLJ 342 and French Motor Car Company Ltd. v. Their Workmen 1962 II LLJ 744 and submit that the amount awarded is contrary to the
judgments of the Supreme Court.
8(e). He would also rely upon the judgments in Management of the Kirlampudi Sugar Mills Ltd. v. The Indusrial Tribunal, A.P. 1971 II LLJ 491
and Sarabhai Chemicals Staff Association v. Sarabhai Chemicals 1984 I GLR 566 (Gujarat) and submit that there should not be any narrow
outlook for the purpose of deciding these matters. He would also submit that Exs.M.14, 15, 16, 17 and 18 have been totally rejected by the
Tribunal which are relevant. It is his submission that when an error on the face of the record is admitted, the matter has to be remitted back for
arrival of a fresh decision.
On the other hand, it is the submission of Mr. V. Prakash, learned senior counsel for the Employees Union that while exercising jurisdiction of
this Court for certiorari in respect of Labour Court award, the mere existence of some error in the award is not sufficient, if the award is otherwise
just and reasonable. According to him, the contentions raised on behalf of the management are technical and one has to see the substantial basis of
the award to decide as to whether justice has been rendered in fixing the fair wages.
9(a). It is his submission that in respect of construction of wages award, different yardstick has to be followed as it is not a mathematical formula
and it is a humane approach, which is required based on the existing circumstances and reasonable requirements of a family with children and in
that regard, capability of the employer or any other comparison would not play major role. It is his submission that it is a concept of fair wage
which has to be decided and the fair wage may be higher than minimum wage, but it is lower than the living wage. Even assuming that the living
wage as found in the directive principles of the Constitution of India is not possible, one has to consider about the fair wage to provide the
minimum requirements of life.
9(b). To substantiate his contention that ultimately it is the substantial justice which has to be rendered in the labour matters and therefore, the
industrial jurisprudence is different from other ordinary jurisprudence, he would rely upon the judgments in Western India Automobile Association
v. The Industrial Tribunal, Bombay 1949 LLJ 245; State of Madras v. C.P.Sarathy 1952 I LLJ 174; Patna Electric Supply Company Ltd. v.
Patna Electric Supply Workers'' Union 1959 II LLJ 366; New Maneckchown Spinning and Weaving Company Ltd. v. Textile Labour
Association, Ahmedabad 1961 I LLJ 525; Varma (A.R.) and Anr. v. Mettur Industries Ltd. 1961 I LLJ 456; J.K. Cotton Spinning and Weaving
Mills Company Ltd. v. Labour Appellate Tribunal of India and Ors. 1963 II LLJ 436; Kamani Metals and Alloys Ltd. v. Their Workmen 1967 II
LLJ 55; Killick Nixon Ltd. v. Killick and Allied Companies Employees Union 1975 II LLJ 53 and Greaves Cotton & Co., Ltd. v. Their
Workmen 1964 I LLJ 342.
9(c). Therefore, his substantial contention is that while deciding about fixation of wages, one has to take into consideration the entire aspects of the
matter. According to him, it is the life of an individual and therefore, the region-wise principle is a recognized concept for wages revision and if
there are no comparable industries in the area, it is the region which has to be taken into consideration including other industries for the purpose of
deciding wage structure. It is his submission that the evidence on the side of workmen is very clear that there are no footwear industries in Hosur
except some in Ambur and in such circumstances, various other industries situate in Hosur area which are paying more have been taken into
consideration and inasmuch as workmen are living in the area, it is the requirement of workmen living in the area which has to be taken into
consideration and the Tribunal has correctly taken into consideration and fixed the basic wages.
9(d). It is his case that a total reading of the impugned award has to be made and according to him, the award has rendered, if not a total justice to
the workmen, but a substantial justice in the form of distributive justice concept. When the payment to workers in other industries in the region is
admitted and is not decided anywhere as erroneous, the principle followed by the Tribunal in deciding the wages by applying region-wise principle
is not improper. He has also taken this Court to the cost aspect of life in the area and contended that what is awarded is for the bare survival of the
workmen with family.
9(e). It is his submission that the finding given by the Tribunal about capability and capacity of the employer to pay higher salary cannot be said to
be perverse for this Court to interfere. It is his reiteration that while arriving at such over all conclusion, if there are some errors, that would not
enable this Court to interfere to set aside the award under Article 226 of the Constitution of India, especially when the claim is for Certiorari under
the Constitution of India.
9(f). It is his submission that even the management witness has supported the case of the workmen and the management has specifically stated that
in Hosur area there is no industry like, Bata India Limited and therefore, by relying upon Ex.M.22, the Tribunal has come to the conclusion about
the capacity of payment by the management and that cannot be said to be incorrect. It is his case that the finding of fact cannot be interfered with
by this Court under Article 226 of the Constitution of India, especially in labour matters.
9(g). It is admitted by the learned Counsel for the management and the workmen that they have not narrowed down their arguments in respect of
any of the issues, particularly, regarding the wage fixation which has been effected under the impugned award by the Tribunal with effect from
1.4.2006. By justifying the same, the learned Counsel for the workmen would rely upon the judgment in The monthly rated workmen at the
Wadala Factory of the Indian Hume Pipe Co., Ltd. v. The Indian Hume Pipe Co., Ltd. AIR 1986 SC 1794 apart from the provisions of the
Industrial Disputes Act,1947, particularly Section 17A regarding the term, ''enforceability of the award''. He would also rely upon various
judgments to show that the capacity to pay should be judged taking into consideration the depreciation as well as tax liability. He would rely upon
the judgments in Wenger & Co. v. Their Workmen 1963 II LLJ 403; Woolcombers of India Ltd. v. Woolcombers Workers Union 1974 I LLJ
138 and Unichem Laboratories Ltd. v. The Workmen 1972 I LLJ 576 in the matter of fixation of payment of wages. He would also rely upon the
judgment in Western India Match Company Ltd. v. Their Workmen 1963 II LLJ 459 (SC); Hindustan Times Ltd. v. Their Workmen 1963 I LLJ
106 and Greaves Cotton Co. Ltd. v. Their Workmen 1964 I LLJ 342.
9(h). He would justify the grounds for enhancement under each and everyone of the heads by the Tribunal including variable D.A. which has been
increased by 50%. He would also submit that the Industrial Tribunal has in fact not enhanced the fixed D.A., but it has been given by way of
distribution justice on variable D.A. He would submit that it is not as if the Tribunal has accepted the entire demands made by the workmen, but it
has considered the substantial grounds for the purpose of arriving at the conclusion.
9(i). To reiterate his stand that the mere error is not sufficient to set aside an award, he would rely upon the judgments Ebrahim Aboobakar and
Hawabai Aboobakar of Bombay v. Custodian General of Evacuee Property, New Delhi AIR 1952 SC 319; Hari Vishnu Kamath v. Ahmad
Ishaque and Ors. AIR 1955 SC 233; Shri Ambica Mills Co., Ltd. v. S.B. Bhatt AIR 1961 SC 770; Maharashtra Academy of Engineering and
Educational Research v. State of Maharashtra 2001 (10) SCC 166 and Neltaon India and Ors. v. Bipin V. Patel (2006) 9 SCC 192. He would
rely upon the judgment in Polychem Ltd. v. R.D. Tulpule, I.T., Bombay 1972 II LLJ 29 to substantiate his contention regarding the compliance of
the directive principles of State policy to make better wages.
Before adverting to the correctness or otherwise of the impugned award passed by the Industrial Tribunal, it is relevant to consider the scope
of this Court''s jurisdiction under Article 226 of the Constitution of India, while dealing with the award of Labour Court to set aside the same by
way of Certiorari, especially when it relates to fixation of wages structure. In the earliest judgment of the Constitution Bench of the Supreme Court
in Ebrahim Aboo bakar and Hawabai Aboobakar of Bombay v. Custodian General of Evacuee Property, New Delhi AIR 1952 SC 319 while
dealing with the powers of the High Court under Article 226 of the Constitution of India to issue a writ of Certiorari against the proceedings of the
Additional Custodian of Evacuee Property under the Bombay Evacuees (Administration of Property) Act, 1949 and the subsequent orders
declaring the appellant as an intending evacuee, it was held as follows:
The remaining three questions canvassed before us, unless they are of such a nature as would make the decision of the respondent dated 13th
May,1950, a nullity, cannot be the subject-matter of a writ of certiorari. It is plain that such a writ cannot be granted to quash the decision of an
inferior court within its jurisdiction on the ground that the decision is wrong. Indeed, it must be shown before such a writ is issued that the authority
which passed the order acted without jurisdiction or in excess of it or in violation of the principles of natural justice. Want of jurisdiction may arise
from the nature of the subject-matter, so that the inferior court might not have authority to enter on the inquiry or upon some part of it. It may also
arise from the absence of some essential preliminary or upon the existence of some particular facts collateral to the actual matter which the court
has to try and which are conditions precedent to the assumption of jurisdiction by it. But once it is held that the court has jurisdiction but while
exercising it, it made a mistake, the wronged party can only take the course prescribed by law for setting matters right inasmuch as a court has
jurisdiction to decide rightly as well as wrongly. The three questions agitated before us do not seem to be questions which bear upon the
jurisdiction of the court of appeal, or its authority to entertain them.
Of course, while deciding so, the Constitution Bench held that it is the appellate authority which has the jurisdiction to decide the soundness of the
decision of the inferior Court as a Court of appeal but not a Writ Court.
While dealing with the writ jurisdiction of the High Court under Article 226 of the Constitution of India against the Election Tribunal, a
Constitution Bench of the Supreme Court in Hari Vaishu Kamath v. Ahmad Ishaque and Ors. AIR 1955 SC 233 held as follows:
It may, therefore be taken as settled that a writ of ''ceritorari'' could be issued to correct an error of law. But it is essential that it should be
something more than a mere error; it must be one which must be manifest on the face of the record. The real difficulty with reference to this matter
however, is not so much in the statement of the principle as in its application to the facts of a particular case. When does an error cease to be mere
error, and become an error apparent on the face of the record? Learned Counsel on either side were unable to suggest any clear-cut rule by which
the boundary between the two classes of errors could be demarcated.
Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla,C.J. In Batuk K. Vyas v. Surat Borough
Municipality AIR 1953 Bom 133 (R) that no error could be said to be apparent on the face of the record if it was not self-evident, & if it required
an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases. But there must be cases in
which even this test might break down, because judicial opinions also differ, and an error that might be considered by one Judge as self-evident
might not be so considered by another. The fact is that what is an error apparent on the face of the record cannot be defined precisely or
exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each
case.
Again, in Shri Ambica Mills Co. Ltd. v. Shri S.B. Bhatt and Anr. AIR 1961 SC 970 the power of this Court under Articles 226 and 227 of
the Constitution of India has been explained in the words of P.B. Gajendragadkar, J. in the following words:
The first contention which the learned Attorney-General has raised before us on behalf of the appellant is that the High Court has exceeded its
jurisdiction under Articles 226 and 227 in interfering with the decision of the Appellate Authority. He contends that at the highest the error
committed by the Appellate Authority is one of law but it is not an error apparent on the face of the record, and he argues that it was not within the
competence of the High Court to sit in appeal over the judgment of the Appellate Authority and examine meticulously the correctness or the
propriety of the conclusions reached by it.
The question about the nature and extent of the jurisdiction of the High Courts in issuing a writ of certiorari under Article 226 has been the
subject-matter of several decisions of this Court. It is now well settled that the said writ can be issued not only in case of illegal exercise of
jurisdiction but also to correct errors of law apparent on the face of the record. In this connection it may be pertinent to refer to the observations
made by Denning, L.J., in Rex v. Northumberland Compensation Appeal Tribunal (1952) 1 KB 338. ""The writ has been supposed to be confined
to the correction of excess of jurisdiction,"" observed Lord Justice Denning, ""and not to extend to the correction of errors of law; and several
Judges have said as much. But the Lord Chief Justice has, in the present case, restored ceritorari to its rightful position and shown that it can be
used to correct errors of law which appear on the face of the record even though they do not go to jurisdiction"". There is no doubt that it is only
errors of law which are apparent on the face of the record that can be corrected, and errors of fact, though they may be apparent on the face of
the record, cannot be corrected (vide: Nagendra Nath Bora v. Commissioner of Hills Division and Appeals, Assam 1958 SCR 1240. It is
unncessary for us to consider in the present appeal whether or not a certiorari can issue to correct an error of fact on the ground that the impugned
finding of fact is not supported by any legal evidence. Thus it would be seen that the true legal position in regard to the extent of the court''s
jurisdiction to issue a writ of certiorari can be stated without much difficulty. Difficulty, however, arises when it is attempted to lay down tests for
determining when an error of law can be said to be an error apparent on the face of the record. Sometimes it is said that it is only errors which are
self-evident, that is to say, which are evident without any elaborate examination of the merits that can be corrected, and not those which can be
discovered only after an elaborate argument. In a sense it would be correct to say that an error of law which can be corrected by a writ of
certiorari must be self-evident; that is what is meant by saying it is an error apparent on the face of the record, and from the point of view, the test
that the error should be self-evident and should not need an elaborate examination of the record may be satisfactory as a working test in a large
majority of cases; but, as observed by Venkatarama Ayyar, J., in Hari Vishnu Kamath v. Syed Ahmed Ishaque 1955 (1) SCR 1104 at p.1123
there must be cases in which even this test might break down because judicial opinions also differ, and an error that may be considered by one
Judge as self-evident might not be so considered by another"". Judicial experience, however, shows that though it cannot be easy to lay down an
unfalling test of general application it is usually not difficult to decide whether the impugned error of law is apparent on the face of the record or not.
The Supreme Court in Syed Yakoob v. K.S. Radhakrishnan AIR 1964 SC 477, again reiterated that under Article 226 of the Constitution of
India, if there is a manifest error or misinterpretation of statute, the same can be corrected by a writ of Certiorari. The relevant portion of the
judgment is as follows:
It is, of course, not easy to define or adequately describe what an error of law apparent on the face of the record means. What can be
corrected by a writ has to be an error of law; but it must be such an error of law as can be regarded as one which is apparent on the face of the
record. Where it is manifest or clear that the conclusion of law recorded by an inferior Court or Tribunal is based on an obvious mis-interpretation
of the relevant statutory provision, or sometimes in ignorance of it, or may be, even in disregard of it, or is expressly founded on reasons which are
wrong in law, the said conclusion can be corrected by a writ of certiorari. In all these cases, the impugned conclusion should be so plainly
inconsistent with the relevant statutory provision that no difficulty is experienced by the High Court in holding that the said error of law is apparent
on the face of the record. It may also be that in some cases, the impugned error of law may not be obvious or patent on the face of the record as
such and the Court may need an argument to discover the said error; but there can be no doubt that what can be corrected by a writ of certiorari is
an error of law and the said error must, on the whole, be of such a character as would satisfy the test that it is an error of law apparent on the face
of the record. If a statutory provision is reasonably capable of two constructions and one construction has been adopted by the inferior Court or
Tribunal, its conclusion may not necessarily or always be open to correction by a writ of certiorari. In our opinion, it is neither possible nor
desirable to attempt either to define or to describe adequately all cases of errors which can be appropriately described as errors of law apparent
on the face of the record. Whether or not an impugned error is an error of law and an error of law which is apparent on the face of the record,
must always depend upon the facts and circumstances of each cases and upon the nature and scope of the legal provision which is alleged to have
been misconstrued or contravened.
Again, while deciding about the finding of the Industrial Tribunal regarding the retrenchment of employees in the light of Article 226 of the
Constitution of India and the jurisdiction of the High Court, the law has been reiterated by the Supreme Court in Parry and Co. Ltd. v. P.C.Pal and
Ors. 1970 II LLJ 429 SC in the following way:
The grounds on which interference by the High Court is available in such writ petitions have by now been well established. In Basappa v.
Nagappa (1955) S.C.R. 250 : AIR (1954) SC 440 it was observed that a writ of certiorari is generally granted when a court has acted without or
in excess of its jurisdiction. It is available in those cases where a tribunal, though competent to enter upon an enquiry, acts in flagrant disregard of
the rules of procedure or violates the principles of natural justice where no particular procedure is prescribed. But a mere wrong decision cannot
be corrected by a writ of certiorari as that would be using it as the cloak of an appeal is disguise but a manifest error apparent on the face of the
proceedings based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so
corrected. In Dhrangadharu Chemical Works Ltd. v. State of Saurashtra (1957) SCR 152 : AIR (1957) SC 264 this Court once again observed
that where the Tribunal having jurisdiction to decide a question comes to a finding of fact, such a finding is not open to question under Article 226
unless it could be shown to be wholly unwarranted by the evidence. Likewise, in the State of Andhra Pradesh v. S. Sree Ram Rao AIR (1963)
SC 1723 this Court observed that where the Tribunal has disabled itself from reaching a fair decision by some considerations extraneous to the
evidence and the merits of the case or where its conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person
can ever have arrived at that conclusion interference under Article 226 would be justified....
In Ramniklal N. Bhutta and Anr. v. State of Maharashtra and Ors. (1997) 1 SCC 134, Jeevan Reddy, J. while speaking about the powers
under Article 226 of the Constitution of India, has held that the exercise is in furtherance of interest of justice and not merely making out a legal
point, since it is discretionary in nature. Of course, that was a case under the Land Acquisition Act. The relevant portion is as follows:
...The power under Article 226 is discretionary. It will be exercised only in furtherance of interests of justice and not merely on the making out
of a legal point. And in the matter of land acquisition for public purposes, the interests of justice and the public interest coalesce. They are very
often one and the same. Even in a civil suit, granting of injunction or other similar orders, more particularly of an interlocutory nature, is equally
discretionary. The courts have to weigh the public interest vis-a-vis the private interest while exercising the power under Article 226 ''indeed any of
their discretionary powers. It may even be open to the High Court to direct, in case it finds finally that the acquisition was vitiated on account of
non-compliance with some legal requirement that the persons interested shall also be entitled to a particular amount of damages to be awarded as a
lump sum or calculated at a certain percentage of compensation payable....
The Supreme Court held that the High Court under Article 226 cannot convert itself into a Court of appeal and examine the facts for
correctness of the decision as to whether the view is proper or not. The said observation was made by the Supreme Court in Shama Prashant Raje
v. Ganpatrao and Ors. (2000) 7 SCC 522 while dealing with the powers of the High Court against the orders of Tribunal, especially with
reference to Rent Control Tribunals. The relevant paragraph is as under:
...Undoubtedly, in a proceeding under Articles 226 and 227 of the Constitution the High Court cannot sit in appeal over the findings recorded
by a competent tribunal. The jurisdiction of the High Court, therefore, is supervisory and not appellate. Consequently, Article 226 is not intended
to enable the High court to convert itself into a court of appeal and examine for itself the correctness of the decision impugned and decide what is
the proper view to be taken or order to be made, but notwithstanding the same, on a mere perusal of the order of an inferior tribunal if the High
Court comes to a conclusion that such tribunal has committed manifest error by misconstruing certain documents, or the High Court comes to the
conclusion that on the materials it is not possible for a reasonable man to come to a conclusion arrived at by the interior tribunal or the inferior
tribunal has ignored to take into consideration certain relevant materials or has taken into consideration certain materials which are not admissible,
then the High Court will be fully justified in interfering with the findings of the inferior tribunal....
The same view was again reiterated in Maharashtra Academy of Engineering & Educational Research v. State of Maharashtra (2001) 10 SCC
166 in the following words:
...It is well settled that an order of an inferior tribunal or a statutory authority could be interfered with by the High Court while exercising
jurisdiction under Article 226 of the Constitution, only if the Court comes to the conclusion that the order is contrary to certain provisions of law or
the authority concerned has no jurisdiction or the authority concerned took into consideration certain extraneous materials, not germane to the issue
or the authority concerned failed to take into consideration certain materials which are otherwise relevant or the finding is one on the materials
which could not have been arrived at by any reasonable man....
From the above said categorical legal position, it is clear that the scope of jurisdiction of this Court under Article 226 of the Constitution of
India in issuing writ of Certiorari is restricted to cases where there are manifest error in the impugned order or the order is contrary to the
provisions of law or the order has been passed without jurisdiction or in cases where the authority, while passing orders has taken into
consideration certain extraneous matters which are not relevant or in cases where the authority has failed to take into consideration certain relevant
factors, particularly the basic principle that on the materials available, no ordinary reasonable person would come to such a conclusion.
The Federal Court of India in Western India Automobile Association v. The Industrial Tribunal, Bombay and Ors. 1949 LLJ 245 was dealing
with the manner in which Courts should approach the industrial adjudications including that of wage revision. In that case, the issue was, as to
whether the dispute relating the reinstatement of a dismissed employee is referable to the Industrial Tribunal for adjudication under the Industrial
Disputes Act, 1947 and it was held that the Tribunal is not fettered with limitations in adjudication and any decision on industrial dispute does not
wholly rely on the ordinary law. The relevant portion is as follows:
...Moreover, the relief is not of such an unusual character that it may be wholly ruled out as one of the legal reliefs which the courts can grant. This
relief of reinstatement is on the same footing as a relief of restitution. Restitution can be granted in integrum in certain cases. All that is required is
that the ex-employee should be restored to his previous position so far as capacity, status and emoluments are concerned and there is nothing
extraordinary in such restoration being ordered when considered necessary in the interests of peaceful settlement of industrial disputes.
Adjudication does not, in our opinion, mean adjudication according to the strict law of master and servant. The award of the tribunal may contain
provisions for settlement of a dispute which no court could order if it was bound by ordinary law, but the tribunal is not fettered in any way by
these limitations. In Volume I of ""Labour Disputes and Collective Bargaining"" by Ludwig Teller, it is said at page 536 that industrial arbitration may
involve the extention of an existing agreement or the making of a new one, or in general the creation of new obligation or modification of old ones,
while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements. In our
opinion, it is a true statement about the functions of an industrial tribunal in labour disputes.
While distinguishing the power of arbitrator in a civil dispute from that of adjudication by a Industrial Tribunal, the Constitution Bench of the
Supreme Court presided over by M. Patanjali Sastri, CJ. in State of Madras v. C.P. Sarathy 1952 I LLJ 174 held as follows:
...But the adjudication by the tribunal is only an alternative form of settlement of the disputes on a fair and just basis having regard to the prevailing
conditions in the industry and is by no means analogous to what an arbitrator has to do in determining ordinary civil disputes according to the legal
rights of the parties. Indeed, this notion that a reference to a tribunal under the Act must specify the particular disputes appears to have been
derived from the analogy of an ordinary arbitration. For instance, in Ramayya Pantulu v. Kutty & Rao (engineers) Ltd. It is observed.
that if a dispute is to be referred to a tribunal the nature of the dispute must be set out just as it would if a reference were made to an arbitrator in a
civil dispute. The tribunal like any other arbitrator can give an award on a reference only if the points of reference are clearly placed before it.
The analogy is somewhat misleading. The scope of adjudication by a tribunal under the Act is much wider as pointed out in the Western India
Automobile Association''s case See 1949 LLJ p.245 and it would involve no hardship if the reference also is made in wider terms provided, of
course, the dispute is one of the kind described in Section 2(k) and the parties between whom such dispute has actually arisen or is apprehended
in the view of Government are indicated either individually or collectively with reasonable clearness. The rules framed under the Act provide for the
tribunal calling for statements of their respective cases from the parties and the disputes would thus get crystallised before the tribunal proceeds to
make its award. On the other hand, it is significant that there is no procedure provided in the Act or in the rules for Government ascertaining the
particulars of the disputes from the parties before referring them to a tribunal u/s 10(1).
Holding that in appropriate cases, the Industrial Tribunal can impose new obligations unlike in contractual matters, P.B. Gajendragatkar, J. in
Patna Electric Supply Company Ltd., v. Patna Electric Supply Workers'' Union 1959 II LLJ 366 held as follows:
...There is no doubt that in appropriate cases industrial adjudication may impose new obligations on the employer in the interest of social justice
and with the object of securing peace and harmony between the employer and his workmen and full cooperation between them. This view about
the jurisdiction and power of the industrial tribunals has been consistently recognised in this country since the decision of the Federal Court in
Western India Automobile Association v. Industrial Tribunal, Bombay 1949 LLJ 245. In that case the employer had challenged the jurisdiction of
the industrial tribunal to direct the reinstatement of his employees; and it was argued that such a direction was contrary to the known principles
which govern the relationship between master and servant and was outside the jurisdiction of the tribunal. This contention was negatived by the
Federal Court, and it was observed that industrial adjudication does not mean adjudication according to the strict law of master and servant. ""The
award of the tribunal"", observed Mahajan,J., in delivering the judgment of the Court, ""may contain provisions for the settlement of a dispute which
no Court could order if it was bound by ordinary law, but the tribunal is not fettered in any way by these limitations"". The same view has been
more emphatically expressed by Mukherjee, J., in the Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi 1950 LLJ 921:
In settling the disputes between the employers and the workmen"", observed the learned Judge, ""the function of the tribunal is not confined to
administration of justice in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though
they may not be within the terms of any existing agreement. It has not merely to interpret or to give effect to the contractual rights and obligations of
the parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace.
In Rohtas Industries, Ltd. v. Brijnandan Pandey 1956 II LLJ 444 Mr. Justice S.K. Das has expressed the same conclusion when he observed that:
a court of law proceeds on the footing that no power exists in the courts to make contracts for people; and the parties must make their own
contracts. The courts reach their limit of power when they enforce contracts which the parties have made. An industrial tribunal is not so fettered
and may create new obligations or modify contracts in the interests of industrial peace, to protect legitimate trade union activities and to prevent
unfair practice or victimization.
Thus there can be no doubt that an industrial tribunal has jurisdiction to make a proper and a reasonable order in any industrial dispute; and in that
sense the respondent may be right when it contends that it was within the competence of the tribunal below to entertain its grievance about housing
accommodation and to give it appropriate relief in that behalf.
In the Constitution Bench judgment of the Supreme Court in New Maneckchowk Spinning and Weaving Company Ltd., and Ors. v. Textile
Labour Association, Ahmedabad 1961 I LLJ 521 while dealing with a question viz., whether the jurisdiction of the industrial Court can be invoked
to impose new obligations upon the parties and if so, the same is possible in respect of the concept of bonus, reiterating the judgment of the
Federal Court in Western India Automobile Association v. The Industrial Tribunal, Bombay and Ors. 1949 LLJ 245 referred to above, it was held
as follows:
Two questions immediately arise in this connection: the first relates to the jurisdiction of the industrial court to impose new obligations upon the
parties and the second is, whether, if the industrial court has jurisdiction to impose new obligations, it could do so in a matter of this kind
considering the concept of bonus as laid down by the decisions of this Court.
So far as the first question is concerned (namely, the general power of an industrial court to impose new obligations upon the parties), the matter is
now well-settled by the decisions of the Federal Court and also of this Court. It was held by the Federal Court in Western India Automobile
Association v. Industrial Tribunal, Bombay, and Ors. 1949 LLJ 245 that-
adjudication does not in our opinion mean adjudication according to the strict law of master and servant. The award of the tribunal may contain
provisions for settlement of a dispute which no court could order if it was bound by ordinary law, but the tribunal is not fettered in any way by
these limitations.
The Federal Court also approved the view of Ludwig Teller that-
industrial arbitration may involve the extension of an existing agreement or the making of a new one, or in general the creation of a new obligation
or modification of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to
existing agreements.(see p.256).
This Court also in Rohtas Industries Ltd. v. Brijnandan Pandy 1956 II LLJ 444 held that-
A court of law proceeds on the footing that no power exists in the courts to make contracts for people; and the parties must make their own
contracts. The courts reach their limit of power when they enforce contracts which the parties have made. An industrial tribunal is not so fettered
and may create new obligations or modify contracts in the interests of industrial peace, to protect legitimate trade union activities and to prevent
unfair practice or victimization. (See p.449).
In Patna Electric Supply Company v. Patna Electric Supply Workers'' Union 1959 II LLJ 366 this Court held that-
There is no doubt that in appropriate cases industrial adjudication may impose new obligations on the employer in the interest of social justice and
with the object of securing peace and harmony between the employer and his workmen and full co-operation between them. (see p.370),
and approved of the decision of the Federal Court in Western India Automobile Association case 1949 LLJ 25 (supra). There is no doubt,
therefore, that it is open to an industrial court in an appropriate case to impose new obligations on the parties before it or modify contracts in the
interest of industrial peace or give awards which may have the effect of extending existing agreement or making a new one. This, however, does
not mean that an industrial court can do anything and everything when dealing with an industrial dispute. This power is conditioned by the subject-
matter with which it is dealing and also by the existing industrial law and it would not be open to it while dealing with a particular matter before it to
overlook the industrial law relating to that matter as laid down by the legislature or by this Court.
The said established view of the Supreme Court that the industrial adjudication is not merely adjudging the contractual rights based on the strict
principles of law, was followed by the Division Bench of this Court in Varma (A.R.) and Anr. v. Mettur Industries Ltd. 1961 I LLJ 456
Rajamannar, CJ. and Veeraswami, J. speaking for the Bench observed as follows:
The learned Judge drew attention to the distinction between the termination of an employment simpliciter and termination of employment as a
punishment for misconduct and considered that as under the standing orders applicable to the case, no enquiry was necessary in the case of
termination of employment simpliciter, the respondent 1 acted within its powers in terminating the services of the appellant 1 without an enquiry, by
recording its reasons in writing for the termination. The learned Judge was further of the opinion that there was no scope for the application of the
principles of natural justice to a relationship of the kind where the rights of parties were provided for and determined by statutes, rules framed
under the statutes and other statutory instruments, that the labour court ignored the rights which the management had under the standing orders and
that the principles of natural justice could not be invoked to set aside something properly done in the exercise of a lawful power.
In this appeal before us Sri Mohan Kumaramangalm, the learned Counsel for the appellants contended that the learned Judge was in error in taking
a too narrow view of the nature and scope of the jurisdiction of the labour court in the matter and quashing its award on the ground that the
respondent 1 was entitled in the exercise of its undoubted contractual power to terminate the services of the appellant 1 irrespective of other
considerations. We are of the opinion that the learned Counsel is right in his contention. When a dispute between a workman and his employer
regarding the termination of his services had developed into an industrial dispute, sponsored and supported by the concerned labour union, the
matter is no longer confined to the limits of contractual rights but other considerations having a larger bearing upon industrial relations and industrial
peace come into play. The principle of the industrial law in providing for adjudications of labour disputes is obviously to conserve and promote just
and equitable relations between employers and employees and secure industrial peace through the process of collective bargaining, negotiation,
conciliation or adjudication of such dispute. In our view, it is inherent in the nature of things, therefore, that settlement of such dispute is above the
realm of merely adjudging contractual rights as between an individual employee and his employer with reference to particular terms and conditions
of employment. An industrial dispute raised by a group of employees arrayed as a union, by reason of the collective force and exigencies of
conserving equitable relations and industrial peace, opens up a wider field beyond individual contractual relations and may involve the question
whether even though an action on the part of the management may be within the contractual power, it is an unfair labour practice, victimisation,
mala fide or otherwise improper from the standpoint of just and equitable labour relationship. The jurisdiction of the labour court or an industrial
tribunal to which such a dispute is referred for adjudication, should necessarily extend and include a power to investigate and adjudicate upon such
questions, unfettered by considerations based on contractual rights as between a particular workman and his employer. It is here that the nature
and scope of the jurisdiction of the labour court or the industrial tribunal adjudicating upon industrial disputes differ from those of the civil courts,
which can only decide strictly confining themselves to the contractual terms and conditions.
That such is the nature and wide scope of the jurisdiction of industrial tribunals has been long settled. The point was specifically decided by their
lordships of the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay and Ors. 1949 LLJ 245.
The avowed object of the industrial adjudication and settlement that it is on the basis of the principle of fair play and justice was reiterated by
the Supreme Court in J.K. Cotton Spinning and Weaving Mills Company Ltd. v. Labour Appellate Tribunal of India and Ors. 1963 II LLJ 436
and the relevant portion is as follows:
Then Mr. Pathak was driven to contend that the ground of social justice given by the Labour Appellate Tribunal in support of its award is really not
sound in law, and he referred us to the observations made by this Court on some occasions that the considerations of social justice were ""not only
irrelevant but untenable"" ''vide J.K. Iron and Steel Company Ltd., Kanpur v. Iron and Steel Mazdoor Union, Kanpur 1956 I LLJ 227 and Muir
Mills Company Ltd. v. Suti Mills Mazdoor Union, Kanpur 1955 I LLJ 1. In our opinion, the argument that the considerations of social justice are
irrelevant and untenable in dealing with industrial disputes, has to be rejected without any hesitation. The development of industrial law during the
last decade and several decisions of this Court in dealing with industrial matters have emphasized the relevance, validity and significance of the
doctrine of social justice '' vide Crown Aluminimum Works v. Their Workmen 1958 I LLJ 1 and State of Mysore v. Workers of Gold Mines
1958 II LLJ 479. Indeed, the concept of social justice has now become such an integral part of industrial law that it would be idle for any party to
suggest that industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes. The concept of social justice is
not narrow, or one-sided, or pedantic, and is not confined to industrial adjudication alone. Its sweep is comprehensive. It is founded one the basic
ideal of socio-economic equality and its aim is to assist the removal of socio-economic disparities and inequalities ;nevertheless, in dealing with
industrial matters, it does not adopt a doctrine approach and refuses to yield blindly to abstract notions, but adopts a realistic pragmatic approach.
It, therefore, endeavours to resolve the competing claims of employers and employees by finding a solution which is just and fair to both parties
with the object of establishing harmony between capital and labour, and good relationship. The ultimate object of industrial adjudication is to help
the growth and progress of national economy and it is with that ultimate object in view that industrial disputes are settled by industrial adjudication
on principles of fair-play and justice. That is the reason why on several occasion industrial adjudication has thought it fit to make reasonable
provisions for leave in respect of the workmen who may not strictly fall within the purview of the Factories Act or the Shops and Commercial
Establishments Act. We are, therefore, satisfied that there is no substance in the grievance made by Mr. Pathak that the Labour Appellate Tribunal
should not have granted the demand of the respondents for leave on grounds of fair-play and social justice.
While deciding about the principles to be followed in fixation of wage structure, the Supreme Court has evolved the concept of minimum wage
which is a statutory compulsion, fair wage to provide sufficient standard of family regarding food, shelter, medical care, education, etc. and the
living wage which is a measure of comfort and which is the ultimate goal, in The Kamani Metals and Alloys Ltd. v. The Workmen AIR 1967 SC
1175 : 1967 II LLJ 755 held as follows:
Fixation of a wage-structure is always a delicate task because a balance has to be struck between the demands of social justice which requires
that the workmen should receive their proper share of the national income which they help to produce with a view to improving their standard of
living and the depletion which every increase in wages makes in the profits as this tends to divert capital from industry into other channels thought to
be more profitable. The task is not rendered any the easier because conditions vary from region to region, industry to industry and establishment to
establishment. To cope with these differences certain principles on which wages are fixed have been stated from time to time by this Court.
Broadly speaking the first principle is that there is a minimum wage which, in any event, must be paid, irrespective of the extent of profits, the
financial condition of the establishment or the availability of workmen on lower wages. This minimum wage is independent of the kind of industry
and applies to all alike big or small. It sets the lowest limit below which wages cannot be allowed to sink in all humanity. The second principle is
that wages must be fair, that is to say, sufficiently high to provide a standard family with food, shelter, clothing, medical care and education of
children appropriate to the workman but not at a rate exceeding his wage earning capacity in the class of establishment to which he belongs. A fair
wage is thus related to the earning capacity and the workload. It must, however, be realised that ''fair wage'' is not ''living wage'' by which is meant
a wage which is sufficient to provide not only the essentials above mentioned but a fair measure of frugal comfort with an ability to provide for old
age and evil days. Fair wage lies between the minimum wage, which must be paid in any event, and the living wage, which is the goal. As time
passes and prices rise, even the fair wage fixed for the time being tends to sag downwards and then a revision is necessary. To a certain extent the
disparity is made up by the additional payment of dearness allowance. This allowance is given to compensate for the rise in the cost of living. But
as it is not advisable to have a 100 percent neutralisation lest it lead to inflation, the dearness allowance is often a little less than 100 per cent
neutralisation. In course of time even the addition of the dearness allowance does not sufficiently make up the gap between wages and cost of living
and a revision of wages and/or dearness allowance then becomes necessary. This revision is done on certain principles.
It was also held in that case that while fixing fair wages, the capacity of the industry to bear the burden is a relevant factor. Regarding the
comparison of units in deciding wages, it was held that care must be taken that differently placed units are not taken as guidance while
distinguishing the differences. The relevant portion of the judgment is as follows:
The next part of the inquiry involved the application of the principle of industry-cum-region. This principle is that fixation or revision of scales of
wages, pays or dearness allowance must not be out of tune with the wages, etc., prevalent in the industry or the region. This is always desirable so
that unfair competition may not result between an establishment and another and diversity in wages in the region may not lead to industrial unrest. In
attempting to compare one unit with another care must be taken that units differently placed or circumstanced are not considered as guides, without
making adequate allowance for the differences. The same is true when the regional level of wages are considered and compared. In general words,
comparable units may be compared but not units which are dissimilar. While disparity in wages in industrial concerns similarly placed leads to
discontent, attempting to level up wages without making sufficient allowances for differences, leads to hardships.
In Crown Aluminimum Works v. Their Workmen 1958 I LLJ 1 SC the Supreme Court held that ultimately in deciding wage structure, for the
restoration of peace and goodwill in the industry, a fair and justice basis should be the primary objective. It was also held that the concept of social
justice applies equally to both the employer and the employee. The relevant portion is as follows:
...There can be no doubt that in fixing wage structures in different industries, industrial adjudication attempts, gradually and by wages though it may
be, to attain the principal objective of a welfare State, to secure to all citizens justice, social and economic."" To the attainment of this ideal the
Indian Constitution has given a place of pride and that is the basis of the new guiding principles of social welfare and common good to which we
have just referred.
Though social and economic justice is the ultimate ideal of industrial adjudication, its immediate objective in an industrial dispute as to the wage
structure is to settle the dispute by constituting such a wage structure as would do justice to the interests of both labour and capital, would establish
harmony between them and lead to their genuine and wholehearted co-operation in the task of production. It is obvious that co-operation between
capital and labour would lead to more production and that naturally helps national economy and progress. In achieving this immediate objective,
industrial adjudication takes into account several principles such as, for instance, the principle of comparable wages, productivity of the trade or
industry, cost of living and ability of the industry to pay. The application of these and other relevant principles leads to the constitution of different
categories of wage structures. These categories are sometimes described as living wage, fair wage and minimum wage. These terms, or their
variants, the comfort or decency level, the subsistence level and the poverty or the floor level, cannot and do not mean the same thing in all
countries nor even in different industries in the same country. It is very difficult to define or even to describe accurately the contents of these
different concepts. In the case of an expanding national economy the contents of these expressions are also apt to expand and vary. What may be
a fair wage in a particular industry in one country may be a living wage in the same industry in another country. Similarly, what may be a fair wage
in a given industry today may cease to be fair and may border on the minimum wage in future. Industrial adjudication has naturally to apply
carefully the relevant principles of wage structure and decide every industrial dispute so as to do justice to both labour and capital. In deciding
industrial disputes in regard to wage structure, one of the primary objectives is and has to be the restoration of peace and goodwill in the industry
itself on a fair and just basis to be determined in the light of all relevant consideration....
In Killick Mixon Limited v. Killick and Allies Companies Employees Union 1975 II LLJ 53 while holding that there is no single approach
possible for the purpose of fixing the wage level and further holding that the degree of sacrifice is necessary, the Supreme Court indicated 14
important aspects to be taken into consideration, which are as follows:
All that the management wants in this case in that D.A. must not go on rising with the soaring price index and a limit should be imposed. We
have already observed that in view of the status of the company the capacity to pay will not alone be of moment in favour of removal of the ceiling.
The problem will have to be viewed from the following important aspects:
(1) Condition of the wage scales prevalent in the Company.
(2) Condition of wage level prevalent in the industry and the region.
(3) The wage packet as a whole of each earner in the company with all amenities and benefits and its ability and potency to cope with the
economic requirements of daily existence consistent with his status in society, responsibilities, efficiency at work and industrial peace.
(4) The position of the company concerns relation to other comparable concerns in the industry and the region.
(5) Preemptive necessity for full neutralisation of the cost of living at the rock-bottom of wage scale if at or just above the subsistence level.
(6) The rate of neutralisation which is being given to the employees in each salary slab.
(7) Avoidance of huge distortion of wage differentials taking into reckoning all persons employed in the concern.
(8) Degree of sacrifice necessary even on the part of workers in general interest.
(9) The compulsive necessity of securing social and distributive justice to the workmen.
(10) Capacity of the company to bear the additional burden.
(11) Interest of national economy.
(12) Repercussions in other industries and society as a whole.
(13) The state of the consumer price index at the time of decision.
(14) Forebodings and possibilities in the foreseeable future as far as can be envisaged.
At the same time, it is to be taken note that while taking a decision in respect of fixation of wages, it cannot be put under any straight jacket
formula since it requires various aspects to be considered. It should also be taken note that industrial adjudicator must be careful in embracing the
concept of social justice since it is only to strike a balance in the interest of maintaining industrial peace, such decision is taken. In fact, in J.K. Iron
and Steel Co., Ltd., Kanpur v. The Iron and Steel Mazdoor Union, Kanpur AIR 1956 SC 231 while deciding about the scope and authority of
the industrial adjudicator under the Industrial Disputes Act, it was held that irrelevant consideration should be ignored and the real questions are to
be considered. The relevant portion of the judgment is as follows:
It is pertinent at this stage to refer to a decision of this Court reported in ''Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur'' (S) AIR
1955 SC 170 at p.175 (D) where Bhagwati, J. delivering the judgment of the Court said-
The considerations of social justice imported by the Labour Appellate Tribunal in arriving at the decision in favour of the respondent were not only
irrelevant but untenable.
In the present case also we are of opinion that the Adjudicator and the Labour Appellate Tribunal had adopted the attitude of benevolent despots
and have based their conclusions on irrelevant considerations and have ignored the real questions that arose for decision and the issues that arose
out of the pleadings of the parties.
Therefore, on a general analysis of the legal position regarding fixation of wages, the yardstick that should act as a guide is not only to secure the
social and distributive justice condition of wage level, but also to look into the position of the company comparable to other concerns in the
industry as well as the region.
The main contention raised in this case on behalf of the employer as urged by Mr. AL. Somayaji, learned senior counsel is that the industry-
cum-region formula has not been properly applied by the Industrial Tribunal under the impugned award. The main attack is with reference to
Ex.W16 which are the pay slips filed on behalf of the workmen in respect of a different companies. The contents of Ex.W16 relating to Luk India,
Avtec Ltd., Titan, Ashok Leyland, etc., as extracted by the Tribunal in the impugned award, which is vehemently opposed on behalf of the
employer for taking it as a basis for fixing the wages, are as follows:
S. No. Name of the Company Designation Basic pay Total Earnings
1 AVTEC Ltd., Operator Rs. 3303/- Rs. 21,896/-
(Power Production)
2 Titan Co., Technician Rs. 2100/- Rs.13,187/-
3 Ashok Leyland Rs. 1383/- Rs. 16,879/-
4 Nippon Electricals Operator Rs. 950/- Rs. 9310/-
(Home Applicances)
5 Easun Group of Cos. Rs. 2797/- Rs. 12,833/-
Workman
6 TTK Prestige Worker Rs. 3715/- Rs. 9,857/-
7 Hindustan Lever Workmen Rs. 147.74 Rs. 137.30
Co.(in 2006) (Gr.II)
8 ICICI Bank Senior Rs. 2301/- Rs. 18,048/-
Operator
No doubt, the said document consists of pay slips relating to various industries which are not comparable to the business of Bata India Limited,
since it is not in dispute that those companies covered under Ex.W16 are all involved in different types of business and manufacturing activities but
are all situate in Hosur region. The contention of the learned senior counsel is that the proper approach is that the document must be relatable to
the business of the employer concern which should situate within the region. It is his contention that in respect of different types of manufacturing
process, different yardsticks are to be applied for the purpose of fixing the wages since it depends upon the nature of manufacturing activities,
number of employees employed, marketing position of the products manufactured, etc. and therefore, according to him, fixing the wages on the
basis of pay slips issued by various kinds of companies whose business and manufacturing activities are not comparable with the business and
manufacturing activities of Bata India Limited in Hosur is not proper.
It is true that the Tribunal in the impugned award has placed major reliance on Ex.W16 and concluded that the workers working in Hosur area
in different companies are getting quite reasonable wages and thus, the paying capacity of all the employers in Hosur region is on the higher side.
It is also not in dispute that in Hosur area there are no other industries comparable to the manufacturing process of Bata India Limited. It is
relevant to point out that on behalf of the management steps have been taken to produce at least two documents viz., salary slips of similar
industries in Ambur in Exs.M14 and M15, but the Tribunal found on fact and appreciating the documents that there are some corrections in the
Xerox copies filed and that the names of workers and the numbers are scored out and therefore, credibility cannot be given to those documents.
The employer has also produced Ex.M30, the pay slip relating to a clothing company in Hosur and Bangalore to show that less salary viz., Rs.
3400/- is being paid in the textile company, but the Tribunal rejected the said document produced by the management as not pertinent to wages in
Hosur area. The further document produced as Ex.M17 is relating to Ponds India Limited, which has also been considered and rejected by the
Tribunal on the basis that it is not relating to a regular worker. The Tribunal ultimately concluded that region (Hosur) wise scale of pay has to be
taken note. The Tribunal has taken note of Ex.W16 for the purpose of increasing gross pay, but, not accepted the same in toto. The Tribunal has
also taken note of the capacity of the management to pay and the funds available for distribution to the workers.
In this connection, it is relevant to note that the Supreme Court, while considering the contention that the Tribunal has relied more on the region
aspect on industries-cum-region formula and compared with the concerns which are not comparable, in Graves Cotton & Co., Ltd. v. Their
Workmen 1964 I LLJ 342 held as follows:
...The main attack of the appellants is on the award as regard wages and dearness allowance. It is urged that the industry-cum-region formula,
which is the basis for fixation of wages and dearness allowance has not been properly applied by the tribunal and it had been carried away by the
recommendations of the tripartite conference which suggested need-based minimum wages. It is also urged that whatever comparison was made
was with concerns which were not comparable and the wages awarded were even higher than those prevalent in any comparable concern. It is
also urged that the tribunal did not consider the total effect of the increase it was granting in basic wage and dearness allowance together as it
should have done, for the purpose of finding out whether the total pay-packet in the appellants'' concerns can bear comparison with the total pay-
packet of the concerns with which the tribunal had compared the appellants'' concerns. In this connexion it is urged that in fixing scales of wages
the tribunal increased the maximum and the minimum and the annual rate of increment and decreased the span of years in which the maximum
would be reached. Adjustments made by the tribunal are also attacked and so is the order making the award enforceable from 1 April 1959. As to
the factory-workmen it is urged that the tribunal made no attempt to make a comparison with wages prevalent even in what it considered to be
comparable concerns. Lastly it is urged that the tribunal created a new category of factory-workmen called higher unskilled which was not
demanded and which in any case did not exist in any comparable concern.
The first question therefore which falls for decision is whether the tribunal went wrong in not following the industry-cum-region principle and in
leaning on the recommendations of the tripartite conference. It is true that the tribunal begins its award with a reference to the recommendations of
the tripartite conference wherein the need-based minimum wage was evolved. It is urged that this disposed the tribunal to pitch wage-scales too
high. It is however clear from the award that though the tribunal discussed the recommendations of the tripartite conference at some length, when it
actually came to make the award it did not follow those recommendations. The reason why it referred to those recommendations was that the
respondent-workmen based their claim on them and wanted that the tribunal should fix wage-scales accordingly. But the tribunal''s conclusion was
that it was not feasible to do so, though looking at the financial stability of the appellants emoluments needed upgrading. It then went on to consider
the wages prevalent in comparable concerns and finally fixed wages for the appellants on the basis of wages prevalent in such concerns. Though
therefore the recommendations of the tripartite conference are referred to in the tribunal''s award, its final decision is not based on them and what
the tribunal has done is to make comparison with what is considered comparable concerns so far as clerical and subordinate staff are concerned.
We are therefore not prepared to say that reference to the recommendations of the tripartite conference in the opening part of the award was
irrelevant and therefore the rest of the award must be held to be vitiated on that ground alone.
The main contention of the appellants however is that the tribunal has gone wrong in applying the industry-cum-region formula which is the basis for
fixing wages and dearness allowance and has made comparison with concerns which are not comparable. It is also urged that the tribunal has
relied more on the region aspect of the industry-cum-region formula and not on the industry aspect when dealing with clerical and subordinate staff
and in this it went wrong. Reference in this connexion is made to two decisions of this Court, namely ,Workmen of Hindusthan Motors
v.Hindusthan Motors 1962 II LLJ 352 and French Motor Car Company v. Their workmen 1962 II LLJ 744 and it is emphasized that the
principles laid down in Hindusthan Motors case 1962 II LLJ 352 were more applicable to the present case than the principles laid down in the
French Motor Car Company case 1962 II LLJ 744. In the Hindusthan Motors case 1962 II LLJ 352 this Court observed that it was ordinarily
desirable to have as much uniformity as possible in the wage-scales of different concerns of the same industry working in the same region, as this
puts similar industries more or less on an equal footing in their production struggle. This Court therefore applied the wage-scales awarded by the
Third Major Engineering Tribunal in Bengal in the case of Hindusthan Motors 1962 II LLJ 352 (vide supra) also. It is urged that the tribunal should
have taken into account comparable concerns in the same industry and provided wage-scales on the same lines so that, so far as manufacturing
concerns in the present appeals are concerned, there will be equality in the matter of competition. In the French Motor Car Company case 1962 II
LLJ 744 (vide supra), however, this Court held so far as clerical staff and subordinate staff are concerned that it may be possible to take into
account even those concerns which are engaged in different lines of business, for the work of clerical and subordinate staff is more or less the same
in all kinds of concerns. We are of opinion that there is no inconsistency as urged in the principles laid down in these two cases. As we have
already said, the basis of fixation of wages and dearness allowance is industry-cum-region. Where there are a large number of industrial concerns
of the same kind in the same region, it would be proper to put greater emphasis on the industry part of the industry-cum-region principle as that
would put all concerns on a more or less equal footing in the matter of production costs and therefore in the matter of competition in the market
and this will equally apply to clerical and subordinate staff whose wages and dearness allowance also go into calculation of production costs. But
where the number of comparable concerns is small in a particular region and therefore the competition aspect is not of the same importance, the
region part of the industry-cum-region formula assumes greater importance particularly with reference to clerical and subordinate staff and this was
what was emphasized in the French Motor Car Company case 1962 II LLJ 744 (vide supra) where the company was already paying the highest
wages in the particular line of business and therefore comparison had to be made with as similar concerns as possible in different lines of business
for the purpose of fixing wage-scales and dearness allowance. The principle therefore which emerges from these two decisions is that in applying
the industry-cum-region formula for fixing wage-scales the tribunal should lay stress on the industry part of the formula if there are a large number
of concerns in the same region carrying on the same industry; in such a case, in order that production cost may not be unequal and there may be
equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind. But where the
number of industries of the same kind in a particular region is small, it is the region part of the industry-cum-region formula which assumes
importance particularly in the case of clerical and subordinate staff, for as pointed out in the French Motor Car Company case 1962 II LLJ 744
(vide supra) there is not much difference in the work of this class of employees in different industries. In the present case it does appear that the
tribunal has leaned more on the region part of the industry-cum-region formula and less on the industry part. But we think that it cannot be said that
the tribunal was wrong in doing so for two reasons. In the first place these four companies are not engaged in the same line of industry; but on
account of certain circumstances, namely, that Greaves Cotton & Co. is the controlling company of the other three, it has been usual to keep the
same scales for clerical and subordinate staff in all these concerns. In the second place, it is not clear as was clear in the Hindusthan Motors case
1962 II LLJ 352 (vide supra) that there are a large number of comparable concerns in the same region. As a matter of fact the main company out
of these four is Greaves Cotton & Co., Ltd., which is in the main an investment and financial company and the tribunal was therefore right in taking
for comparison such companies as would stand comparison with the main company in the present appeals (namely, Greaves Cotton & Co.,).
Applying the said yardstick to the impugned award of the Tribunal, it is clear that the Industrial Tribunal has in fact considered the documents
filed on the side of management on the basis of industries-cum-region formula and rejected the same since those documents are not reliable
evidence, but at the same time, not wholly relied upon Ex.W16 and fixed the wages in between the two by striking a balance, which, in my view,
cannot be said to be either totally unwarranted or perverse.
It is, taking note of the higher side of salary under Ex.W16 produced on the side of the workmen, the Tribunal has fixed the salary in respect of
each of Grades A, B and C workmen in Bata India Limited at Rs. 10600/-, Rs. 10500/- and 10400/- respectively.
While considering the capacity of the employer, the Tribunal under the impugned award has found on admitted facts that the salary paid to the
persons working in showrooms as well as to the Directors of the management has been increased by about 50% to 100% every year and came to
a conclusion that such increase is not possible unless the company earns enormous profits and relying upon the statement that Hosur unit generally
gets profits, has held that surplus amounts are available and therefore, the employer has the capacity to pay more wages. The Tribunal has made
comparison with other workers and done the wage revision, I am of the view that there is no perversity in arriving at such a conclusion by the
Tribunal and such conclusion cannot be said to be without any basis or whatsoever.
As repeatedly held by the Apex Court, there cannot be a hard line to be drawn or strict arithmetic formula to be followed in deciding the
matters of wage fixation. In such matters, what has to be seen is the necessity for fixation of wages based on various conditions including living
condition, capacity of the employer to make payment which depends upon not only marketing of products, but also the conduct of the employer in
making payment to other members of the staff. It is also to be seen that at least the fair wages are paid for the workmen while comparing with
other workers in the region, especially in the absence of any credible material placed on the side of the management to show that in similar
industries in the region the wages are paid less. On the other hand, it is available on evidence that in respect of industrial workers in region wise,
salary is paid more and therefore, the reasonable wages has been fixed by the Industrial Tribunal, though not based on correct and calculable
precision.
The judgment relied upon by the learned senior counsel for the employer reported in French Motor Car Company Ltd. v. Their Workmen
1962 II LLJ 744 relates to wages and scales of pay for clerical staff, workshop employees and subordinate staff, wherein the Tribunal while fixing
wages which should be on industry-cum-region basis, especially when dealing with workshop employees, took into account the wages prevailing in
similar concerns in the region, which were larger concerns than the appellant before the Supreme Court. It was in those circumstances, the
Supreme Court held that the award cannot be upheld, especially when evidence was let in in respect of concerns in the line of businesses which
were nearer to the business carried on by the appellant company. The Supreme Court also held as follows:
...It appears that evidence was given before the tribunal for purposes of comparison of concerns which were in the line of business nearly similar to
the business carried on by the appellant company. Consequently, it would not be necessary to take fresh evidence on the point and the tribunal
should proceed to fix the wage-structure afresh after excluding for purposes of comparison concerns in absolutely different lines of business and
also concerns which are disproportionately larger than the appellant company.
On the facts of this case, even though it is true that under the impugned award, the Tribunal has referred to different types of industries situate
in the same region of Hosur as stated above, the Tribunal itself has taken into consideration Ex.W16, but not solely depended upon the same, and
arrived at a conclusion that there were no credible evidence available on the side of employer regarding wage structure based on region wise and
similar industries.
In fact, in the circumstances where there was no comparable concern in the line of business in the same region, the Supreme Court in Indian
Oxygen Ltd. v. Its Workmen and Ors. 1963 II LLJ 83 has taken the view that the Tribunal was justified in looking for comparing with the
concerns which were nearly similar to the company in respect of which wage structure of the employees was to be fixed. Such situation is prevalent
in the case on hand wherein also there is no evidence to show that in Hosur region there are similar concern doing the business of the employer
herein, viz., Bata India Limited. In those circumstances, the Tribunal has taken note of Ex.W16 relating to other companies in the same region as a
guiding factor to arrive at its own conclusion. In the said judgment relied upon by the learned Counsel for the petitioner/employer in Indian Oxygen
Ltd. v. Its workmen and Ors. 1963 II LLJ 83 the Supreme Court also held as under:
...As to the contention that the tribunal compared the appellant-company with concerns which were really not comparable, it may be mentioned
that at present the appellant is the only company of its kind carrying on business in Bombay. There was thus no comparable concern in its own line
of business in that region. Therefore, the tribunal would be justified in looking for comparison at concerns nearly similar to the appellant. The
appellant also conceded, and we think rightly, that the nearest industry for purposes of comparison with the appellant-company was the
engineering industry. The workmen on the other hand wanted that the appellant-company should be compared with the oil refineries and Greaves
Cotton & Co., Ltd., Imperial Tobacco Ltd., Associated Cement Companies Ltd., and some other concerns. The tribunal held that the oil refineries
stood in a class by themselves. It also held that Greaves Cotton & Co., Ltd., was a managing agency concern and was therefore not comparable.
It also refused to compare the appellant-company with the Associated Cement Companies on the ground that it had no factory in Bombay but only
its head office. The tribunal also was not prepared to compare the appellant-company with the Imperial Tobacco Company which was in an
altogether different line of business. The tribunal was prepared to compare the appellant with the engineering firms which the appellant itself relied
on except one concern which was considered by the tribunal to be too small. It seems to us therefore that for the purpose of comparison the
tribunal rightly took into account practically the companies suggested by the appellant. The tribunal also mentioned some other companies which
were indicated on behalf of the workmen, for example, the Indian Cable Company, Ltd., and the Automobile Products. These also cannot be said
to be non-comparable, though they are not quite as near the appellant company as the engineering concerns which the appellant company relied
on. In the main, however, it appears that the tribunal has relied on the engineering concerns on which the appellant-company relied, though, as
already indicated, it has given a slightly higher scale in some cases to the workmen of the appellant-company apparently in view of the fact that
appellant company was always a leading employer in the matter of wage scales. We are therefore of opinion that the tribunal cannot be said to
have made any mistake in the matter of taking into account comparable concerns.
Similar was the view taken by the Supreme Court in Workmen of British India Corporation Ltd. v. British India Corporation Ltd. 1965 II LLJ
433 SC wherein it was held as follows:
Turning now to the question of wages, the tribunal pointed out that there was no woollen mill in the region. It had therefore to decide with what
other industry the wages prevalent in the mills had to be compared. It came to the conclusion that the nearest industry which could be taken into
consideration for purposes of comparison was the cotton textile industry. It pointed out that both cotton textiles and woollen textiles are parts of
the textile industry, the difference being only in the material used. It therefore held that it would be proper to consider the wages paid in the cotton
textile industry in Kanpur for purposes of comparison. We are of opinion that the tribunal cannot be said to be in error when it took the cotton
textile industry in Kanpur for purposes of comparison as there are no other woollen mills in that region.
The Supreme Court has reiterated the concept, of course while dealing with Dearness Allowance stating that it is the local flavour, viz., the
wagering of markets where the employee resides that has to be taken into consideration, even if he is employed in national, multi-national, trans-
national or empire industries. That was in Workmen Employed by Indian Oxygen Ltd. v. Indian Oxygen Ltd. (1985) 3 SCC 177 where the
Supreme Court also held as follows:
On behalf of the Karamchari Union, it was contended that in devising a dearness allowance formula, the region-cum-industry principle should
ordinarily be accepted. As pointed out earlier, dearness allowance generally has a local flavour. A man is exposed to the vagaries of the market
where he resides and works, even though he may be employee of a national, multi-national or transnational industrial empire. The workman is
concerned withthe vagaries of price fluctuation in the area in which he resides and works for gain and to which he is exposed. Therefore, the
region-cum-industry principle must inform industrial adjudication in the matter of dearness allowance. In Woolcombers of India Ltd. v.
Woolcombers Workers Union 1973 SCC (L&S) 551 this Court following its earlier decision in Greaves Cotton and Co. v. Workmen 1964 I LLJ
342 held that in devising basic wages and dearness allowance structure, industrial adjudication sometimes leans on the industry part of the industry-
cum-region formula and at other times, on the region part of the formula as the situation demands. This well-recognised principle of industrial
adjudication cannot be given a go-by on the specious plea that the workmen are employed by an industrial undertaking which has an all India
operation. In this case, the Tribunal has overlooked this important principle of industrial adjudication.
The industry-cum-region formula may be followed in flexible manner to the effect that in certain circumstances it may lean on the industry part
of the industry-cum-region formula and other items on the regional aspects of the industry-cum-region formula, as laid down by the Supreme Court
in Greaves Cotton and Co. v. Workmen AIR 1964 SC 689 in the following words:
In devising basic wages and dearness allowance structure, industrial adjudication sometimes leans on the industry part of the industry-cum-region
formula and at other times, on the region part of the formula as the situation demands. This well recognised principle of industrial adjudication
cannot be given a go-by on the specious plea that the workmen are employed by an industrial undertaking which has an all India operation.
The same was reiterated with approval by the Supreme Court in The Monthly rated Workmen at the Wadala Factory of the Indian Hume Pipe
Co. Ltd. v. The Indian Hume Pipe Co.Ltd. Bombay AIR 1986 SC 1794 in the following words:
Mr. Pai apprehended the possibility of similar demand by the workers in other factories which would render the working of the factory itself
difficult and sometimes compel it to close them down. He has made available to us a statement showing the amounts that the company will have to
dole out if the present system is to continue. In respect of 80 monthly rated workmen the difference payable will be Rs. 75,000/- per month, which
works out to Rs. 9,00,000/- per year. If this slab system is to be introduced for 4000 employees, the liability will be about Rs. 4,50,00,000/-.
Though at the first flush one would be tempted to agree with Mr. Pai, the temptation will disappear when we inform ourselves of the fact that in a
catena of decisions this Court has laid down the industry-cum-region basis as the acceptable basis while working out dearness allowance. This is
the usual alarmist cry of the employers. Uniformity of wage structure throughout the country if accepted will be giving a go-by to the well settled
principle of industry-cum-region. This Court has time and again laid down the industry-cum-region principle whenever the question of wage
structure arose. As an answer to this plea of the respondent, we will only read the following passage from the Judgement in the case of Workmen
v. Indian Oxygen Ltd. AIR 1986 SC 125 to which one of us was a party. Desai,J. While repelling the plea that in an industrial undertaking which
has an all India operation, the unit as a whole should be considered, observed thus:
On behalf of the Karmachari Union, it was contended that in devising a dearness allowance formula, the region-cum-industry principle should
ordinarily be accepted. As pointed out earlier, dearness allowance generally has a local flavour. A man is exposed to the vagaries of the market
where he resides and works, even though he may be an employee of a national, multi-national or trans-national industrial empire. The workman is
concerned with the vagaries of price fluctuation in the area in which he resides and work for gain and to which he is exposed. Therefore, the
region-cum-industry principle must inform industrial adjudication in the matter of dearness allowance. In Woolcombers of India Ltd. v.
Woolcombers Workers Union 1974 (1) SCR 504 : AIR 1973 SC 2578 this Court following its earlier decision in Greaves Cotton and Co. v.
Workmen 1964 (5) SCR 362 : AIR 1964 SC 689 held that in devising basic wages and dearness allowance structure, industrial adjudication
sometimes leans on the industry part of the industry-cum-region formula and at other times, on the region part of the formula as the situation
demands. This well recognised principle of industrial adjudication cannot be given a go-by on the specious plea that the workmen are employed by
an industrial undertaking which has an all India operation. In this case, the Tribunal has overlooked this important principle of industrial
adjudication....
The contention of the learned senior counsel for the management Mr. AL.Somayaji, that the Tribunal while fixing the wages has acted against
the legislature or against the principles laid down by the Supreme Court, and therefore, the matter has to be referred back by way of remand to the
Tribunal for a fresh decision is not sustainable on the facts and in the circumstances of the case for more than one reason which I have elaborately
explained above. First of all, there are no hard and fast rule for fixing the wage structure which depends upon the multifarious factors like, capacity
of the employer to pay, the necessity of the workmen to live decently, comparison of industries region-wise and industry-wise, cost of living
including accommodation available on reasonable rental basis so as to decide about fair wages for a person with minimum number of family
members to lead a decent life.
In my considered view, there is absolutely nothing to presume that under the impugned award of the Tribunal there is any violation of statutory
principles or the principles laid down by the Apex Court. The concept of region-wise industries which is stated to have been not followed by the
Tribunal in this case is a fallacy since the Tribunal has taken efforts to decide on the existing available materials. In fact, it is relevant at this stage to
point out that the management which has raised the issue on the basis of region-wise industries for the purpose of fixing the wages, has chosen to
produce various documents relating to various parts of the country wherein certainly the way of life, cost of living and other conditions are different
from the region in question viz., Hosur. The management having taken such steps in producing documents relating to other regions which are not
connected with Hosur region cannot be expected to contend that the Tribunal has taken note of the region wise concept without following region-
cum-industry concept. The reference made by the management on the wage slips as seen in Exs.M3 and M4 relating to Bataganj Exs.M5 and M6
relating to Bata Faridabad, Exs.M8, M9 and M10 series relating to Bata Southcan are all not relating to Hosur region and they relate to the places
which are situate far away. While it is true that the comparison must be made on the basis of industries wise, the consideration of industries situate
in that particular region is a relevant factor in the absence of any related industries available in Hosur region, especially when the management has
not chosen to produce any credible evidence to that effect, and I do not see any flagrant violation of any principle of law laid down by the Supreme
Court in the impugned decision of the Industrial Tribunal in this case.
The next important contention raised on behalf of the management as insisted by the learned senior counsel is about Ex. M 36. The contention
is that the wage slips in Ex.M36 in respect of four workers viz., U.Chakraborthy, Pradip Saha, Pronab Sarkar and Manoranjandas belonging to
Kolkatta Unit, are all relating to wages paid once in fortnight, whereas the Tribunal under the impugned award has treated the same as wages for a
week and held that there is vast difference of salary, and the same has not been explained by the employer. The relevant portion of the award
against which the issue has been raised by the learned senior counsel is as follows:
Ex.M.36 is the Kolkata wage slip for four workers as follows:
Name Week No. Gross Deduction Net Amount
U.Chakraborthy 44 of 2008 Rs.4455.21 2155.21 Rs.2300
46 of 2008 Rs.3723.22 2023.22 Rs.1700
48th 2008 Rs.3686.69 2086.69 Rs.1600
Total Rs.11865.12 6265.12 Rs.5600/-
Pradip Saha 44/2008 Rs.4578.78 Rs.678.78 Rs.3900
46/2008 Rs.3966.84 Rs.566.84 Rs.3400
48/2008 Rs.4921.10 Rs.721.10 Rs.4200
Total Rs.13466.72 Rs.1966.72 Rs.11500/-
Pronab Sarkar 44/2008 Rs.3868.74 Rs.568.74 Rs.3300
46/2008 Rs.3673.73 Rs.473.73 Rs.200
48/2008 Rs.4138.02 Rs.638.02 Rs.3500
Total Rs.11680.49 Rs.10000/-
Manoranjandas 44/2008 Rs.4530.25 Rs.3430.25 Rs.1100
46/2008 Rs.4141.45 Rs.3641.45 Rs.500
48/2008 Rs.5025.39 Rs.3825.39 Rs.1200
Total Rs.13697 Rs.10897.09 Rs.2800/-
A reference to Ex.M36 makes it abundantly clear that the salaries shown in the wage slips are paid to the concerned employees once in two
weeks and they do not denote the salaries paid for every week. For example, the net amount shown as Rs. 10000/- in respect of Pronab Sarkar is
not relating to three weeks, but it relates to six weeks and therefore, it is submitted that a patent mistake has been committed by the Tribunal in this
regard. However, it is relevant to point out that the Tribunal has not taken Ex.M36 alone for the purpose of deciding and fixing the wages under
the impugned award. In fact, the Tribunal in paragraph 58 has specifically stated as follows:
...Even though the Management has produced the Pay slip of four workers, on that basis we could not arrive the monthly wages of the workers.
Even both sides are not so clear to mention how much could have been the wages of those workers. From these documents, I am of the view that
for 3 weeks take home salaries alone comes to Rs. 10,000/- Gross pay comes Rs. 13,500/- Therefore the salary of the Batanager unit must have
been not less than Rs. 14000/- p.m.
The more relevant aspect is the further contention about Ex.M36. Even though it appears to be the contention of the learned senior counsel
appearing for the workmen that the salary given to employees at Batanagar, Calcutta under Ex.M36 is more and the salary of the workers at
Hosur must be fixed at Rs. 3000/- higher than Ex.M.36, the reason adduced there for appears to be that in Bata Nagar, the management is
providing free hospital, housing, school facilities and catering to its workers and admittedly such facilities are not available to the workers in House
factory. In fact, the Tribunal has taken note of the fact that the learned Counsel for the respondent management has not disputed the same and in
the absence of any specific evidence, the Tribunal has fixed the salary at Rs. 10600/-, Rs. 10500/- and Rs. 10400/- for A, B and C Grades
employees and therefore, it is clear that the Tribunal has not solely relied upon Ex.M36 in respect of which are mistakes and in my view, that itself
cannot be a ground for interfering with the award passed by the Tribunal, which, cannot be said to be unfair, unjust or excess on a overall view.
It is also relevant to point out that the respective senior counsel appearing on behalf of both the parties have admitted that after reopening the
case before the Tribunal, the parties have not narrowed down their arguments, relying upon the Calcutta based wage slips alone. In fact, the
Tribunal itself has not based its decision on Ex.M36 alone, as I have narrated above.
The next contention raised on behalf of the employer is relating to the fixation of an amount of Rs. 750/- for SHSCHC allowance, which
according to the learned Counsel has not been a demand of the workmen at all. However, Mr. V. Prakash, learned senior counsel for the
workmen would explain the above said term as follows:
Skill, Hill, Shift, Child, Heat and Chemical"".
As I have enumerated above, the workmen have made the claim under various heads which include goodwill allowance, house rent allowance,
washing allowance, annual extra, snacks allowance, skill allowance, conveyance allowance, shift allowance, hill station allowance and service
weightage. All these have been demanded by the employees Union in the demand and therefore, it cannot be said that such demand has been
made and the Tribunal has awarded the amount of Rs. 750/- without restricting under any head. In fact, while granting the said sum of Rs. 750/-,
the Tribunal has held that all the demands made by the workmen in other respects have been negatived.
It is also relevant to point out that the Tribunal has not enhanced the fixed D.A. and only increased to 50% the variable D.A. and a reading of
the award shows that it is a total wage factor that has been considered considering the totality of situation, which, in my considered view, cannot be
said to be unjust and excess and on the other hand, it can be certainly termed as a distributive process which has been attempted to be done by the
Tribunal to the maximum possible extent on the available evidence. The Tribunal has taken note of the capacity of the employer to pay which is
adjudged by various factors including the salary of the managerial staff and showroom staff, apart from the tax liability, as held by the Supreme
Court in catena of cases. The Tribunal has also taken note of the nature of work exercised by the workmen and exercised its judicial discretion
which cannot be said to be either perverse or unreasonable.
In Hindustan Times Ltd. v. Their Workmen 1963 I LLJ 108 the Supreme Court has held that while deciding the method of wage fixation, if the
discretion is exercised by the Tribunal which is not unreasonable, there is no necessity to interfere especially when the discretion so exercised
depends upon the facts and circumstances of the case and no general formula can be laid down in that regard. The Supreme Court in that case has
held as follows:
The Tribunal rejected the workmen''s claim for giving effect to its award from April 1956. Wherever however the tribunal has given relief the
tribunal has directed that the award should come into effect from the date of reference, i.e., 23 January 1958. On behalf of the company Mr.
Pathak contends that there is no reason why the award should be given effect to from any date prior to the date of its pronouncement. We are not
impressed by this argument. No general formula can be laid down as to the date from which a tribunal should make its award effective. That
question has to be decided by the tribunal on a consideration of circumstances of each case. There have been cases where this Court had made an
award effective from the date when the demand was first made. There are other cases where the orders of the tribunal directing award to be made
effective from the date of the award have not been interfered with. It is true that in some cases this Court has modified the tribunal''s award in such
a case it does not appear however that any general principles have been laid down. Indeed difficult and not even desirable that this Court should
try to lay down general principles such matters that require careful consideration of the peculiar circumstances of case for the exercise of discretion.
It is sufficient to say that we find no reason to interfere with the tribunal''s direction this matter that the reliefs given by it would be effective from the
date of the reference.
Again, while deciding about the effect from which the fixation of wages must be given, the Tribunal has taken note of the fact that under
Ex.W11 settlement dated 26.4.2004, which is for two years expired on 31.3.2006 and next wage revision has to be done from 1.4.2006 and the
workmen have immediately raised the dispute, and decided that the wage structure has to be made with effect from 1.4.2006. That is also based
on the discretion of the Tribunal. Further, the question as to the date from which the wage structure is to be given effect, depends upon the
discretion of the Court and unless the discretion is exercised capriciously or unreasonably, there is no scope for interference in respect of giving
effect to the wage structure.
That was also the view of the Supreme Court in Western India Match Company Ltd. v. Their workmen 1963 II LLJ 459 wherein the
Supreme Court has held that normally the adequacy or otherwise of evidence let in before the Tribunal is not the concern of the Court and on the
other hand, there is nothing wrong in referring to the nature of evidence for the purpose of deciding as to whether the ultimate conclusion is fair and
reasonable. The relevant portion of the judgment is as follows:
...We have to mention here that our purpose in referring to these details of evidence is not to find out whether the tribunal has come to a wrong
conclusion on fact but only to see if it has made any mistake in applying the correct principles or has come to conclusion that is unreasonable,
arbitrary or perverse. On an analysis of the materials on the record we are clearly of opinion that the correct principles have been applied in a fair
and reasonable manner and the conclusion reached cannot be challenged before us.
xx xx xx xx
The question as to the date from which the benefit granted by an award should take effect must generally be left to the discretion of the tribunal
making the award and this Court ordinarily refused to interfere with the exercise of that discretion. We are unable to find any special circumstances
in this case that would justify any departure from our established practice.
In such view of the matter, looking into the entire aspects of the issues involved in this case, I am of the considered view that the proposed
increase of wages under the impugned award is neither unreasonable, nor unfair, nor exorbitant, since all the relevant factors necessary for the
purpose of fixing the award have been taken note of by the Tribunal. On the over all view of the entire award, I am of the view that there is no
abnormal situation for this Court to interfere. As stated above, a few minor mistakes which have not seriously affected the fixation of wages
structure, cannot alone be the reasons for interfering with the award. Similarly the claim made by the workmen in the writ petition in W.P. No.
5833 of 2009 is also not acceptable for the above said reasons.
In such view of the matter, the impugned award passed by the Industrial Tribunal stands confirmed and both the writ petitions are dismissed. No
costs.