WORKMEN OF BALMER LAWRJE AND CO. versus BALMER LAWRIE AND CO.

!Vovernber 7

. SUPREME COURT REPORTS

WORKMEN OF BALMER LAWRJE AND CO. v.

BALMER LAWRIE AND CO.

(P.B. GAJENDRAGADKAR, K.N. WANCHOO AND K.C. DAS GUPTA JJ.)

Industrial Dispute-Clerical and subordinate staff-Age of retirement-Reduction of grades-Wage structure-Conditions for re-examination-Revision of wage sca/es-Princip/es--Res judicata-App/icability-Comparable character of industrial undertakings

Industrial disputes arose between the respondent and its employees the appellants. The appellants demanded the reduc-tion of the existing five grades into two grades, increase in the scales of pay, privilege and medical leave and increase of the exist-ing age of retirement which was 55. The Tribunal rejected all the demands of the appellants, but allowed an increase of Rs. 10 in the initial salary of all grades. In appeal by special leave:

Held: The age of retirement in case of the respondent's work-men should be increased to 58. Time has now come for increas-ing the age of retirement in the case of clerical staff and subordinate staff generally from 55 to 58.

· Guest, Keen Williams Private Ltd. v. P.J. Sterling, (1960.) 1 S.C.R. 348 and Workmen of M/s. Jessop & Co. Ltd. v. M/s Jessop & Co., [1964] I.L.L.J. 451 1961, followed.

(ii) In the present case having regard to the genesis and the manner in which these grades have functioned since 1949, it is not necessary to make any adjustments in the grades by reducing their number.

(iii) The question as to the revision of wage scales must be

examined on the merits in each individual case. Technical con-siderations of res judicata should not be allowed to hamper the discretion of industrial adjudication. The principle of gradual advance towards the living wage which industrial adjudication can· never ignore, itself constitutes such special feature of industrial adjudication that it renders the application of the technical rule of res judicata singularly in appropriate. If the paying capdcity of the employer increases or the cost of living index shows an upward trend, or there are other anomalies, mistakes, or errors in the award fixing wage structure, or there has been rise in the wage structure iu comparable industries in the region, industrial employees would be justified in making claim for the re-examina-tion of the wage structme and if such claim is referred for industrial adjudication, the Adjudicator would not normally be justified in rejecting it solely on the ground that enough time has not passed after the making of the award, or that material change in

relevant circwrntances had not been proved. It is, of course not possible to lay down any hard and fast rule in the matter. The question must be examined on the merits in each case.

Workmen of Balmer Lawrie and Co.

Burn & Co. Ltd. v. Their Workmen (1959) 1 L.L.J. 450 and James Finlay & Co. Ltd. Employees Union, Calcutta v. M/s. James Finlay & Co. Lid. Calcutta, 1957 L.A.C. 154, referred to.

In dealing with industrial matters, industrial adjudication should not normally encourage technical pleas and having regard to the fact that cases are conducted before the Tribunal many times by laymen, the significance or the importance of the argument that particular question is not put to particular witness should never be exaggerated.

Balmer Lawrie and Co.

(iv) In dealing with the comparable character of industrial

undertaking, industrial adjudication does not normally rely on oral evidence alone. This question is considered in the light of material facts and circumstances which are generally proved by documentary eYidence. The total capital invested by the concern, the profits made by the concern the dividends paid, the number of employees, the standing of the concern in the industry, these and other matters have to be examined in determining whether one concern ifl comparable with another in the matter of fixing wage, and thes1: questions cannot be decided merely on the interest-ed testimony of either the workmen or the employer and his wit-nesses.CIVIL APPELLATE JURISDICTION : Civil Appeal No. 820 of 1962.

Appeal by special leave from the award dated

June 29, 1961, of the First Industrial Tribunal, West Bengal in Case No. VIII-608 of 1960.

P.K. Sanya! and P.K. Mukherjee, for the appellants.

B. Sen, S. Ghosh a)1d B.N. Ghosh, for the respon-

dent No. 1.

November 7, 1963. The Judgment of the Court was delivered by

GAJENDRAGADK AR J.-An industrial dispute bet- Gajendragadkar ween the irespondent, M/s Balmer Lawrie & Co., J. and its employees, the appellants, has given rise to the present appeal by special leave. The dispute related to four demands made by the appellants and it was referred for adjudication by the Govern-ment of 'West Bengal to the Industrial Tribunal constituted under section 7 of the Industrial Disputes Act, 1947. These demands were: grades

1963 and scales of pay, privilege leave, medical leave and retiring age. In regard to the claim of the appellants Workmen of for reducing the existing five grades into two grades Balmer Lawrie organised on rational and scientific basis, the Tribu-and Co. nal held that, on the whole, the grades seemed to v. function satisfactorily, and so, no case had been Balmer Lawrie made out for their amalgamation. The demand and Co. for increase in the scales of pay was substantially . ~ dk rejected by the Tribunal, but it held that the appellants a1en rJga ar should be given some relief by increasing the initial · salary of all the grades by Rs. 10. The claims for privilege leave and medical leave were rejected by the Tribunal; it held that the mere fact that two concerns in the neighbourhood had agreed to give more than 21 days' privilege leave, was no justification for chang-ing the present rule as to privilege leave which governed the appellants, and as to medical leave, the Tribunal held that the construction which the respond1:nt was plaCing on the relevant rule contained in Exbt. was inadmissible, and so, there was no necessity for introducing any rule that the production of medical certificate from any medical practitioner should suffice. The Tribunal then examined the appellants' claim as to the retirement age and it held that the existing age of retirement which was at 55 needed no change. An award was accordingly passed in the light of the findings recorded by the Tribunal on the four demands made by the appellants. It is this award which is challenged by the appellants before us.

In respect of the age of retirement, the approach adopted by the Tribunal appears to be unsatisfactory. This question has been comidered by this Court on several occasions. In Guest, Keen, Williams Private Ltd. v. P.J. Sterling & Ors.ell. this Court has discussed in general way the considerations which are relevant and material in determining proper age for super-annuation in industrial employments. As has been observed by this Court recently in the case of Workmen of M/s Jessop & Co. Ltd. v. M/sJessop & Co. & Ors.<[2]l

(2) [19641 1 L.L.J. 451.

(1) [196011 S.C.R. 348.

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we feel that the time has now come for increasing 1963 the age of retirement in the case of clerical staff and the subordinate staff generally from 55 to 58. Workmen of It appears that the attention of the Tribunal was not Balmer Lawrie drawn to the relevant decisions of this Court; other-and Co. wise, the Tribunal would not have rejected the appel-v. !ants' claim. In fact, in the present appeal, Mr. Balmer Lawrie Sen for the respondent has agreed that the age of and Co. retirement should be increased from 55 to 58. We -accordingly n:verse the order passed by the Tribunal Gajendragadkar in that behalf and direct that the age of retirement J. in the case of the respondent's workmen should be 58 and not 55 as from the date of this judgment.That takes us to the question about the reduction of the grades from 5 to 2. Mr. Sanyal for the appel-lants contend> that generally two grades are adopted by industrial concerns and he urges that the presence of five grades is both unscientific and inexpedient. It may be conceded that two or three grades are gener-ally adopted by industrial concerns, but in the present case, it is m:cessary to bear in mind the previous history of the creation of these grades and to take into account the fact that these five grades have, on the whole, satisfactorily functioned in the concern of the respondent. In the award pronounced between the parties, in 1949, these five grades were evolved. Floormen who are mentioned in the award correspond to Grade I which is described as the Sub-grade in the respondent's concern. Then we have the remain-ing four grades described as Junior Grade, Senior Grade, Section Head Grade and Supervisor Grade. These correspond to the four grades Nos. II, III, IV & V in the respondent's concern. Since 1949, these grades have been maintained by the respondent. That is the genesis of the 5 grades.

It cannot be seriously disputed that the employees working in the Sub-grade which is Grade I are en-trusted with distinctly inferior type of work and they cannot be integrated with Grades 11 or III. Then as to Grades II and III, it is significant that there is automatic promotion from one to the other

1963 (Annexure D). This automatic promotion is, of course, subject to the condition that the Clerks concerned Workmen of have satisfactory service records and it is granted Balmer Lawrie on the clear understanding that they would continue and Co. to undertake Grade II duties. lt also appears that v. Clerk who joined the company in Grade I and was Balmer Lawrie placed in Grade II prior to the abolition of Grade and Co. I, or on the date when this Grade was abolished, -would be automatically promoted and fitte'd in the Gajendragadkar next higher Grade, subject to the conditions mentioned 1· in the rule. Thus, it is clear that between Grades II and III which might have been amalgamated into one Grade, there is automatic promotion. This method has the advantage of enabling the employer to recognise outstanding merit in Clerk work-ing in the lower grade by promoting him straight-away to the higher grade. The appellants have not suggested that such promotions in recognition of outstanding service and efficiency have never been given, nor have they alleged that they have been given for improper reasons. As to Grades IV and V, they are in the nature of selection grades and the work entrusted to the employees in the two grades is of such distinctive character that it would be unreasonable to think of amalgamating them into one grade. Therefore, we are satisfied that having regard to the genesis of the five grades which prevailed in the respondent's concern and the manner in which these grades have functioned since 1949, it is not necessary to make any adjustments in the grades by reducing their number. Accordingly, we think the Tribunal was right in refusing to accept the demand of the appellants to reduce the grades from five to two.

The next question to consider is one in regard to the increase in the scales of pay. The Tribunal has rejected this claim on the ground that no material change had been proved in the relevant circumstances sin-::e the scales were previously fixed. It appears that when the grades were fiist determined by an award in 1949, they operated for three years; then revision

SS.C.R.

was made in 1952 and another revision was effected

in 1955. By these revisions, modification has been made in the max·1mum salary payable to the employees Workmen °! in the different grades, but the minimum remained Balmer Lawrie unchanged. That is why the Tribunal has made and Co. an ad hoc addition of Rs. IO to the mmimum salary v. in the respective grades. The Tribunal thought that Balmer Lawrie this modification would meet the ends of justice. and Co. The other reason given by the Tribunal for rejecting . -dk the claim is that the plea of the high increase in the Ga1endraga cost of living on which the appellants relied was not J. valid, because dearness allowance was paid to the appellants under the Bengal Chambers of Commerce Formula and that, the Tribunal thought, answered the appellants' contention about the rise in the cost of living. The appellants also relied on an agree-ment between the parties and urged that by virtue of the said agr·~ement, they were entitled to claim revision of the wage scale, because four comparable concerns in the region had in the meanwhile revised their wage scale8. The Tribunal was not impressed by this plea either. It is these findings recorded by the 1 ribunal that need to be examined in the present appeal.

. -dk ar

Taking the first argument that there has been no change in the circumstances, the Tribunal has relied upon two decisions in support of the view that unless material change in circumstances is proved, there can be no change in the wage structure. In Burn & Co. Ltd. v. Their Workmen & OrsPl this Court has observed that in the absence of anything to show th.at b~tween 1950 ao.d 1955 when the present indus-tnal dispute was referred for adjudication, circum-stance~ had so altered to make the existing scales of pay and grades unreasonable or irn;dequate to meet the conditions prevailing at the time the industrial dispute had been referred to the Tribunal, it must be held that any revision of the existing wage-scales or grades was unjustified. Similarly, in James Finlay & Co. Ltd. Employees' Union, Calcutta v. M/s. James (I) [1959] I L.L.J. 450.

1963 Finlay & Co. Ltd., Calcutta<[1]l, the Labour Appellate Tribunal observed that though the principles of Workmen o! res judicata had no application to adjudication on Balmer Lawne industrial disputes, on principle, previous award and Co. should not be changed, except on justifiable grounds. v. The Appellate Tribunal then proceeded to observe Balmer Lawrie that some of the grounds on which the award can andCo. be changed are: change of circumstances, principle . -of gradual advance to the living wage; anomaly, a1end7gadkar mistake or error in the last award involving hardship · to either party or both.

While dealing with the question about the revi-sion of wage scales, it is necessary to remember that the technical considerations of res judicata should not be allowed to hamper the discretion of industrial adjudication. It is undoubtedly true that wage scales are devised and wage structures constructed as matters of long-term pclicy, and so, industrial adjudication would naturally be reluctant to interfere with the wage structures without justification or in light-hearted manner. When wage structure is framed, all relevant factors are taken into account and nor-mally it should remain in operation for fairly long period; but it would be unreasonable to introduce considerations of res judicata as such, because for vari-ous reasons which constitute the special characteristics of industrial adjudication the said technical consi-derations would be inadmissible. As the Labour Appellate Tribunal itself has observed, the principle of gradual advance towards the living wage which industrial adjudication can never ignore, itself consti-tutes such special feature of industrial adjudication that it renders the application of the technical rule of res judicata singularly inappropriate. If the paying capacity of the employer increases or the cost of living shows an upward trend, or there are other anomalies, mistakes or errors in the award fixing wage structure, or there has been rise in the wage structure in com-parable industries in the region, industrial employees would be justified in making claim for the re-exami-(1) [1957] L.A.C. 154.

5S.C.R.

nation of the wage structure and if such claim is 1963 referred for industrial adjudication, the Adjudicator would not normally be justified in rejecting it solely Workmen of on the ground that enough time has not passed after Balmer Lawrie the making of the award, or that material change in and Co. relevant circumstances had not been proved. It is, v. of course, not possible to lay down any hard and fast Balmer Lawrie rule in the matter. The question as to revision must and Co. be examined on the merits in each individual case that is brought before an adjudicator for his adjudication. Gajendragadkar

Then as to the rise in the cost of living, the Tribunal has no doubt observed that having regard to the fact that dearness allowance is paid to the appel-lants' under the Bengal Chambers of Commerce formula, the appellants' plea was not valid; but it does not appear that the Tribunal has considered the question a& to whether the said forumla affords complete neutralisation to the employees against the rise in the cost of living. We propose to express no opinion on this point, but we are concerned to point out that unless the Tribunal had examined the matter carefully and bad come to the definite conclusion that the formula in question gave nearly complete neutralisation against the rise in the cost of living, it would be unreasonable to hold that because the Chamber forumla is adopted by the respondent for payment of dearness allowance to its employees, the complaint of the appellants that there has been rise in the cost of living and so, their wage struc-tures should be revised, has no substance. This is matter which has to be carefully examined before any conclusion is reached in satisfactory way.

. That leav.es another point to be considered and it bas ~efercnce to the agreement between the parties on which the appellants relied. In 1955, when by agreement the wage scales were revised, the parties agree_d that the pay scales then introduced would r~mam unchallen_ged "unless amended by any Mercan-t1~e Ommbus Tnbunal _or any legislation prescribing higher rates of pay, or Ill the event of any substantial enhancement of scales of pay being effected generally

1963 in other Mercantile Firms of Balmer Lawrie & Co. Ltd.' s standing, or in the event of any extraneous Workmen °1 circumstances arising resulting in general demand for Balmer Lawrie further enhancement of the scales of pay." The appel-and Co. !ants contended that wage scales had been recently v. revised by the Imperial Tobacco Co. Ltd., Shaw Balmer Lawrie Wallace Co., Voltas Co. and Tata Iron & Steel Co., and Co. and in support of this plea, they examined four wit-. -nesses who proved the revised scales of wages.. The Ga;endragadkar argument was that these concerns are comparable 1· concerns and since there has been revision of wage scales in these concerns, the appellants were entitled to claim revision of their wage scales in accordance with the terms of the agreement. After the appellants led their evidence in proof of the fact that the four concerns had revised their pay scales, the respondent examined some witnesses on its behalf. Amongst these witnesses was Kamal Prasad Sircar. In his evidence he mentioned the names of six firms: which, according to him, were comparable with the firm of the respondent. Amongst these firms, he did not in-clude any of the four firms referred to by the appellants. The Tribunal took the view that since Sircar was not cross-examined on the question as to whether any of the said four firms are comparable to the respondent's concern, the plea of the appellants that the said firms are comparable must be rejected. In our opinion, the reason given by the Tribunal in rejecting the appel-lants' claim is wholly unsatisfactory and the approach adopted by it in dealing with this matter inappropriate. In dealing with industrial matters, industrial adjudi-cation should not normally encourage technical pleas and having regard to the fact that the cases are con-ducted before the Tribunal many times by laymen, the significance or the importance of the argument that particular question is not put to particular witness should never be exaggerated. Besides, the Tribunal has overlooked the fact that though evidence was led by the appellants in respect of the four concerns obviously on the ground that they were comparable concerns, Sircar did not positively take the oath that they were not comparable concerns, and so, it would

5S.C.R.

not be reasonable to make finding against the appel-lants on the ground that Sircar was not asked any question about it.

Workmen of Balmer Lawrie and Co. Co.

Besides, it is necessary to emphasise that in and Co. Co. dealing with the comparable character of industrial v. undertakings, industrial adjudication does not Balmer Lawrie usually rely on oral evidence alone. This question is and Co. considered in the light of material facts and circum-stances which are generally proved by documentary Gajendragadkar evidence. What is the total capital invested by the J. concern, what is the extent of its business, what is the order of the profits made by the concern, what are the dividends paid, how many employees are employed by the concern, what is its standing in the industry to which it belongs, these and other matters have to be examined by industrial adjudication in determining the question as to whether one concern is comparable with another in the matter of fixing wages. Now, it is obvious that these questions cannot be decided merely on the interested testimony either of the workmen, or of the employer and his witnesses. Unfortunately, the Tribunal has lost sight of this important feature. Therefore, we are satisfied that the Tribunal was in error in refusing to consider the merits of the appellants' claim in regard to the modification and increase in the wage scales.

In regard to the appellants' grievance in respect of privilege leave and medical leave, we see no sub-stance.

The result is, the award rejecting the appellants' 7laim f~r modification and. revision of the wage scales 1s set aside and the matter 1s sent back to the Tribunal for ~isposal of this issue in accordance with law. ~artles would be !it liberty to lead additional evidence m support of thelf respective cases. The order made ~y the. i:r!bunal ~iving ad hoc increase of Rs. 10 m the 1mt1al salanes fixed for different grades is con· ~rmed. The other directions given by the award m respect of the other claims made by the appellants are also confirmed. Having regard to the fact that 1 SCI/64-23

1963 the appellants have succeeded in respect of the retire-ment age and that an order of remand has been passed Workmen of by us in their favour for reconsideration of their Balmer Lawrie claim as to revision of the wage scales, we direct and Co. that the respondent should pay the appellants their v. costs in this Court. Balmer Lawrie

and Co.

A.ward partly set aside and case remanded.

Gajendragadkar J.

November 8

GENERAL MANAGER, BHILAI STEEL PROJECT, BHILAI

STEEL WORKERS' UNION, BHOPAL AND ORS. (P.B. GA.JENDRAGADKAR, K.N. WANCHOO AND K.C. DAS GUPTA JJ.)

Standing Orders- Certification-Jurisdiction of Certifying Officer-The Industrial Employment (Standing Orders) Act, (Act No. 20 of 1946)-The Madhya Pradesh Industrial Workmen (Stand-ing Orders) Act (M.P. Act No. 19 of 1959)-The Madhya Pradesh Industrial Workmen (Standing Orders) Act (M.P. Act No. 26 of 1961) -The Madhya Pradesh Industrial Workmen (Standing Orders) Act (M. P. Act No. 5of1962) The Madhya Pradesh Gel'leral Clauses A.ct (M.P. Act No. 3 of 1958), s. 25-The C.P. & Berar Industrial Disputes and Settlement Act (No. 22 of 1947).

The appellant submitted for certification draft standing orders on June 9, 1960 to the Certifying .Officer under the: Industrial Employment (Standing Orders) Act, 1946. The respondents raised an objection that the Certifying Officer had no jurisdiction inasmuch as the Madhya Pradesh Industrial Workmen (Standing Orders) Act, 1959 applied to this industry and the Industrial Em-ployment (Standing Orders) Act, 1946. Overruling this objection the Certifying Officer certified the draft standing orders on August 6, 1962. The respondents appealed to the Industrial Court, Madhya Pradesh which upheld the objection and set aside the order of certification as void, being without jurisdiction. In appeal by special leave: