POLYCHEM LIMITED versus R. D. TULPULE, INDUSTRIAL TRIBUNAL, BOMBAY & ANR

POLYCHEM LIMITED v. R. D. TULPULE, INDUSTRIAL TRIBUNAL, BOMBA\ &. ANR. March 15, l97l

[C. A. VAIDIAL!NGAM, I. D. DUA AND G. K. M!TTER, JJ.]

Lt.buur Luw-Wage · policy~Fi.wtion uf (11/on·cmce-Principleli (() hi! con.ridert'CI. TI.•: dcm1nd for vacation allowanc..'C of the workmen of. the appcl-· !ants, at the same rate as was granted to the higher 3taff, was granted bv th~ lmlu~lrial Tribunal. Th= Tribunal uccid:d tt .. : question on the hasis that the appellant-employer had th~ fln-:ancial capaqty to stand the bur of ~uch allo...,an;::: l:dng grnntcd to the workmen at the rate claimed.

Allowing the appeal ROd remanding the mutter to be considered afre~h by <he Tribunal,

HELD ; ( 1) :The ultima to;: <'hjcct of inuu trbl adjuJication in this •0 country is to help the growth and prQgres~ of national economy; and fer reali~ i ng that object, indu~trinl dispules Ill'! settled on princ1ples of fair play und justi~ ha'rmonising t~ conflicting clainu o! capital and labour with full aw;~reness of socio-economic trends -of thought. Indus· tritl law in !his country, is therefore. expected to effectively secure to the workers. conditions of service reasonably conducive to the im-pro,em•1nt of thdr social and economic slandard of living and their moral and matcri11l development. The industri:.d labour problerm in this coun-E "!."d r), having politiciil conditions, their roots in have the historica l litt!e in common background with of such social, economic problems in t:Je Unired St<~tes or other de\doped countries. The'refore, the American l:n" or. thought "hould not be too readily and indiscriminately followed. [861 D-Ol 1:1 W;..:·•. no!icr n:lu:inK to "'orl::mcn ;, 1\ complellt and ~ens :tiv~. r :or~~ of pui:l!c policy, becJJu,.~. the relative ·;t·Jtus of *<>rkmcn· m the K":1ety. th::i~ ccmmitment to in:hJ5try, tl"•!ir ;•ttitude tOwards the manaj!C· m_:n_t. th~ir m0tivation towurds productivity. and their standard ~nd w~y -~: ,:,r:. ~rt "'· couditi uncJ by 111ac~·'· ~ ! is not :.1 pure!v econom1c pohc\' 1il 11 h:t., an ·~rTJ'llo yer <~nd 1111 employe<: olonc are entercst:d. but. •h:: . fon,umer and the wciety at large and t'! fortiori ,the State, ar~ al~ vttull)' :~11¢rc •t:J. No WUJF policy t:~n ever he upplicd in "acuum m drsrc~:ard f\( the r~ilitie~ or the &oeial and ~conomic condition' in our ~Un!rY · C~:l\i.'krin' th~ qu~ tion or' wages In the b11ckgroun.l of th.: D•rcchv.: Prrncrpl~ 1n the Con~titution, wage' ~tructure shou14 sl!l've to p_romotc II f,.,, r,·murl':r"rion to labour en~uring due: social dign•ty, personahty 1rnd \~~ •·:.a·. :1 lair rdurn to cupibl, 11nd sn-cngthen incentives to eff!c•:ncy~ . ...,nl':.- .tt 1-.:.:inr. unmindful or !he legitimate interests and e~pe_ctaho.n~ of rt,e c~n\Utr.r!T in tho: m~tttcr of prk:e•. Guided by th.s prmc•plc. •f. the fh •nc•~l c;~pacity ot 11n indu~try oermit• the ~~~<orkers should he allowc~ " du~ '"ar ~ in th: PrcY.operity o! the inJustrv to "-'hich they have con~n­~~·•.~J h~· t~~ir lahour, ~o 0~ to en'lble them, within r•:a\onahl~ l·m,h. 0 :mMove their 5lnndnrd of living. (863 D·Hl ') 1 But in th.: nr~-cnt cas• tbc T ribun .. l hr1d com milled u ~;riou ' ,:.,,,. in rot •·o.,, ;,•.··in~ :h~ o;h'!r nllowanc~ ond amcni!ics :lllo,,cd to·

i . ': It

[1972] 3 s.c.a .

.SUPREME COURT REPORTS

kmen and comparing their total wage packet with the respondcnts-wor et of those. employee~ to whom t~e allowan~ had ~n tot31 wage pac~etermining the question. Tbe difference between the aUow~~ w en to the workmen and to the sta!f to whom vacation ameruues a)Jowe een ranted must in law and justice be looked into and allowaoc,~ basthebn de~ided whether o1r nor the present workmen's 'demand· is the que. justified. [863 ton H-864 A, -C]

The principle of region-cu1~-indus~ry . has no d?ubt to oo kept in Ticw but then the comparable mdustnc~ In the regtOn ~ve to be comi-dered from all the relevant asJ:ecls whtclt _have been la!d ~own by this Court in variou.~ decisions. The fact th~t m the refinenes tn the regi011 similar allowance is granted as result of settlement cannot, on that :~ccount alone, be considered to be irrelevant, bec~use, tha.t may . appro-priately indicate that the demand of the workm.,;n tn those mdustnes was not considered. unjust. (864 B-DJ

The total wage packet of the -various categories of employees in the -appellant's industry it ~df, including the que~tion of the nature of thtir duties and function~. however, de~rves to be given primary importance. so lhal there is no reasonable chance of heart buroiog and discontent-ment amongst the different categorie5 of workmen on account of dilferen· ti~l ~~tment which, though seemingly justifiable may, in real etf~t ~ -dtscrtmmatory. [864 D·Fl

Rtmin11ron Rand of Jndic. Limiud v. Tlte Workmen, C.A. Nos. 856 of 1968, 147S of I 968 and 2129 of 1968 d~cided on Decemtr: r 10, 1969, ~lemblc C:lttmical Works Co. Ltd. v. The Worknun, l1961] 3 S.C.R. j~~· ~tl~ Clorh d: Genua! Mill.~ Co. Ltd. v. Workmen, U969] 2 S.C.R. Ka;pu~ (., 1[~;][u][n ][d: ][S . ][.-t/ ][Co. ][Ltd. ][v. ][Th][e ][Iron ][& ][Steel M][ar.][d][oO][r ][U11i011, ]U · 't : ~) 2 S.C.R. 131S and Express New:rp<lpt!rs (P) Lrd. V. ~ nlon u lndru, 11959] S.C.R . 12, refern:d to.

and ~~3 Jf~~rTE ]t.JRISD!CTION: Civil Appeals Nos. 2162

of :Cit~~sfJar~c-~aJ. Le'ave from the Award dat~d Jl.!ne 9, 1970 (I.T.) Nos · 284 0 f[0]19[un]68 and 19 8 and 19 [a1 ][Maharashtra, Bombay ]o( 1969. 1969. [in ][References ][1 ]

· 68 and 19 8 and 19 o( 1969. 1969. S. Y. Gupte M Parekh, for the ~PP all esh ll_hatr, Sunanda Blwndure and· P. H. ~t (tn both the appeab). ·

1(. Rajendra Cho dh appeaJ.s). w ary. lor respondel\t No. 2 (in bOth the 0

The Judgment of th

Dua, J Court was delivered by appeals k..: The short but · uward Qt~'Ptcialleave rel~~P<>rtand p(>i.o~ raised in thes~ ~~ the de lndu_,trial T . es to the v~hdity of that part VI. • lanu .;::d for vacation ~~~nal, Maharashtra, Bombay, by whiC~ fl ed to it~ fu~lychem Ltd ~ce of the workmen of th~ .WC:t· Staff both. at th hbay, at the same rato as" ~ut , ead. otflce and at its Chlllll

POLYCHEM L TO. V, INDUSTRIAL TRIBUNAL. (Dr 10, 1.) 857 plant, was allowe?. These two appeals are directed . impugned award In two references under s lO(l) (d~a~nst the · Industrial Disputes Act, 1947, one of which (Ref No 2[~f]4 [the ]1968) (Ref~ renee related No. to 19 the of demands 1969) of to the the head workmen office staff of Chembure and th ~~~~ of The impugned po rtion of the award dated June 9, 1970, reads as under : "The only nthc~ demand which is now common to both the rcfcr~nt·c~ ts th.: demand for the vacation allow-ance. It :1p1~cars t~at tlle company pays to its officers or other ~l.:.tll Jrawmg R.s. 60.0 an~ more as basic wage one months . ~;llary for vacat1on m case his leave e:<:ceeds 15 Jays and is not accumulable. The demand of the workm.:n is that the minimum should be Rs. 300 and the maximum Rs. 2,000. It is pointed out for the compan~ that this was rcfu~ed by the Tribunals in Burmah Shell and Voltas. The Union on the other 0 hand rcfincrie~ contended t-y ~.:ttl<>ments that it was ollowed in the banks and though refused by the Tribu-n:~ls. Th<! pk.1 uf discrimimation. it was pointed o~t. h:J~ bc..:n r..:i.:l·t..:d b)' the Tribunals (see Parke DaVlS. I.C.R. IW.o p. 151 and Alembic Chemical, [19611 1 :lfl'ord L.L.J. p. to J:!X pay l. thi, r. ;~llowanhowever. ce to feel its wor'-m.:.n that this company ~nd av01~ c~n dissati~faction. dered as an amenity ln socialisto the tic workmen countrks whi~h th1s IS should be consi-provided such a~ subsidi;:cd or fn:e vaca!IO~ ~t health resorts. The idcul of wage fixation is the hvm~ w~ge while is ~ociali.the national ~tic stateideal . The was envisaged in the constltuuon company can i<?in oth~rse~u~: trend uward more seems vacation co~tentcd to be allowance and ;~ppcaring healthy to in this regthe workmen. W?[1]:kme~ ion. I at 1 th t same here ore rate as the stall with the same cond1ttons .

. S V Guptt! challc!nged !his portion The appellant's of the award learned on counthe sel.ground , Shn tha~ · thTr~b~nal · ·5 ~0 and that evidence !n support of the condusio~s :~mv~d ~~ by ~d contrarY t<? the st proceeds on grounds wh1ch ar~ u;de~~nt • Nowhere sn the ~tt.led principles relating to industna~ dl)51 ~~ll~ industries and rcg1on IS vacation allowance granted [10 ]d ·d tho counsel, add· !here is thus no compar.tblc instance, conten had atso not II mg that the senior assistants in tho present ~~vas further urge? r>re~<cd their claim to vacatiu~ a.Uowancc:s. t various othe~ ameoi-t~at workmen in the appellants md~stry 0g~e revised textile rates. He' like, dearness allownnce, occordtng t

t .I ·I I : t

[19?2] 3 S.C.R.

sU.PJ.'EME C(!IUltT RBP01TS

.overtime wages, Juneh a~wance (not allowed; to officers), gra-.., tuity (with qualifying period of 5 ye.~ as agamst 1 ~ ~ars for ~>fficers), uniforms and medical fac1htleS. Our attent1on was drawn to prepared statement produced. before ws on ~half of the appellants for showing the dlffe~ence tn ~e ·pay packet of -workmen t'tnploy~d at the appt"llant s head office as result of the award given in Reference N_o. IT 2~4/68. The respon~ent did not accept this statement saymg that It was. based on the Interpre-tation placed by the appellant to. ~~pport 1ts case. In r~gard to . overtime allowance and other fac1httes referred to by Shn Gupte. 1he learned counsel relying, Inter alia, on another statement relating to facilities accorded ;o the workmen in 1970-71 pro-duced before us, submitted that the workmen were getting nume-rous other benefits not available to officers. This submission was. 'however, sought to be founded on material not on the court record. The learned counsel strongly contended that the real criterion should have been to look to the overall pay structure of the workmen in the light of the standard prevailing in similar industries in the same: r~gion.. Mere capacity of the appellant to pay should not be the sole criterion, he added. Reference wa; made to the de~ision of this Court in Remington Rand of lna'ia Limited v. The Workmm([1]) where it was observed:

-"A~ regards the first ground it is true that in th: present case there W<IS no question of the company bcin" unable to bear the additional burden of lunch allowanc:. ~lut the fact .tha! an employer is able to bear the burden ~~ not the cntcnon. The fol,lndation of the principle of thdustry-cum-!egio~ is that as far as possible there ~ ould be umformtty of conditions of service in com-~;abl; con~erns in the industry in the region so that w re [15 ]no Imb_alance In the conditions of service bet· e~n ~~k~en m one establishment and those in the ::~ . anger otherwise would be migration of able ditio~~ Thm t~ t ft ~ne ose where there are more favourable con-where conditions are less favour-cern. can ~~ore, the . J?lere fact that particular con-Equallv importno ground t; 1.an ::;so.sc additional t~po; 1t _liability such extra obligation. would by itself N! prevaifing in the IS act that the wage structure nnd the ppel!ant companv is undkputably fair earness allow · • · been, as aforesaid I' k a~ce .'Paid to the workmen has living. 1'he~e m~ [10 ]e With the index of cost of living from time t~t tt.ake care of the rise in the cost of were to· be compelled1~1e. If, therefore, the company tl m ·c.~ lll~~t ll4 o( . .::. pay lunch allowance to all . • 1%8 147$ !O, 1%8. ' Of 1[9]68 and 2119 of )968 decided M [)cc.:mbtr

workmen including those· who work. at the offices it w'ould in fact mean double provision for the consti-tuent of the cost of food already proYideu for in the wage se..les and the rates of dearne5s allowance. The force of this aspect was recognised by this Court in ~ Mcleon & Co. Ltd. v. Workmen( [1 ])", ·'

' lt was said on behalf of the respondents that in the case cited there was no discriminatory treatment in the same concern among the emplorees of different grades of salaries at the same place. t The requirements of providing lunch to· those who could not return to the office from outdoor work outside the c1ty limits, as was the fact in the cited case, according to the respondents, furnish distinguishing feature in that case from the present. Next reliance was plac~d by Shri Gupte on the following observations in Alembic Chemical Works Co. Ltd., v. The Workmene) :"Then it is urged that the provision made by the award for privilege leave introduces discrimination· between the clerical staff covered by the present refe-rence and operatives covered by the earlier awards made by the same Tribunal. We were told that operatives had made similar claim for privilege. leave before the same Tribunal, and the said claim had been rejected.· The argument is that the provision for privilege leave made by the present award would create discontent ~ amongst the operatives to whom similar leave has been denied, and that would d1sturh industrial peace. We are not impressed by this argument. It is not seriously . disputed . that distinction has generally been made between .operatives who do manual work and clerical 'and other sta!f; in fact the appellant's standing arden themselves make different relevant provisions for the two categories of its employees. It is also not disputed · that in practice .such distinction is made by comparable concerns,. and awards based on the same distinction arc ~~nerally made in respect of the two separate catego-n.es of employees. We are, therefore, unable to appre-G . c1ate the argument that. in granting privilege leave to \ the .present staff the Tnbunal has either overlooked its e*fhe~ award .or ~~ m~de d. decision which suffers from tm v1ce of d1Scrurunat10n. . The· practice prevailing in comparable concerns and the trend of a\;Vards both seem to show that ?istinction is generally made between t~e . tw~ ca~egones of ,employees, and since the said d~ttn~wn lS perfectly justifiable no question of discri-mtnanon can arise." ·

(1.) [1964] S S.C.R. 568, .S7i.

(2). (1961] 3 S.C.R. 297 at 306;

According to the respondents the distinction between operatives doing manual work and clerical and other staff may be justified but that is not the case here. Besides, in the reported case this Court, in its concluding part said, that it was not satisfied that any case for interference under Art. 136 had been made out whereas in the present case the appellan't wants this Court to interfere and reverse the impugned part of the award on the f.l ground that it is grossly erroneous and unjust. . Reference was then made on behalf of the appellant to the decision in Delhi Cloth & General Mills Co., Ltd., v. Workmen(!), emphasis being laid on the following passage at p. 327 : 4

"But in the branch of law relating to industrial relations the temptation to be. crusaders instead of adjudicators must be firmly resisted. It would not be out of place to remember the 9tatement of the law made in different context-but ponetheless appropriate here-by Doughlas, J., of the Supreme Court of the -United States in United Steel Workers of America v. Enterpri8e Wheel and Car Corporation('-') :

' ...... as arbitrator .... does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legiti· mate only so long as it draws its essence from the collec-tive bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.' r We may at once state that we are not for moment suggesting that the law of industrial relations developed in our country has proceeded on lines parallel country has proceeded on lines parallel to the direction of the law in the United States."

We may at once state that we are not for moment suggesting that the law of industrial relations developed in our country has proceeded on lines parallel country has proceeded on lines parallel to the direction of the law in the United States."

The respondent, on the other hand, laid more emphasis on the last portion of the above observations, submitting that the problems of our country in regard to labour welfare at the present stage of our industrial development, particularly in the background of our egalitarian socialistic pattern of society as visualised in oux:_SCons-titution, are materially different from the labour problems ~uir­ing solution in the developed American society under that cqun-try's constitution. The following passage from pp. 326-3~7 from the D.C.M.'s case (I) is also worth quoting: ;..

"We consider it right to observe that in adjudication of industrial disputes settled legal principles. have little play : the awards made by industrial tribunals are often the result of ad hoc determ~nation of disputed questions, {1).[1969) 2 S.C.R. 307. (2). [1960] 363 U.S. 593.

(2). [1960] 363 U.S. 593.

and each determination fonns precedent for determi-nation of other disputes. An attempt to search for pJinciple from the law built up on those ·precedents is futile exercise. To the Courts accustomed to apply sett~ed principles to facts determined by the application of ·the judicial process, an essay into the unsurveyed expanses of the law of industrial relations with neither compass nor guide," but only the pillars of precedents is disheartening experience. The Constitution has however invested this Court with power to sit in appeal over the awards of Industrial Tribunals which are, it is said, founded on the somewhat hazy background of · maintenance of industrial oeace, which secures the prosperity of. the industry and improvement of the con-ditions of workmen employed in the industry, and in the ·absence of principles precedents may hav& to be adopted guides-somewhat reluctantly. to secure some reasonable degree of uniformity of harmony in the process." In o~r view the ultimate object of industrial adjudication in our coun~ry is to help the growtP. and progress of national eco-nomy and for. realising that object the industrial disputes are settled on principles of fairplay .and justice, hannonising the conflicting claims of capital and labour with full awareness of the current of socio-economic trends of thought. Our industrial law, is there-·E fore, expected to effectively secure to the workers conditions of service reasonably conducive to the improvement of their social and economic standard of living and their moral and material development. The existing pe<;uliar problems, relating to indus-trial labour in our country, having their roots in the historical back_.!O'ound .of our s~ial, economic and political conditions have little in common with the current labour problems of America or other developed countries. We must, therefore, guard ourselves against the •temptation of too readily and indiscriminately follow-ing ~e American line of thought. Shri Gupte next referred us to. the·decision"'in /. K. Iron &Steel Co. Ltd. v. The Iron & Steel Mazdoor. Union, Kanpur(l) relying on the following passag.~ at p. 1322 :

"In Bharat Bah.k Lid. v. Employees of Bharat Bank Ltd.([2]), this Court held by majority that. though these Tribunals are not Courts in the strict sense .of."the term they have to . discharge qua5i-judicial ftmctions and as s·uch ~re subject to .the overriding jurisdiction of this Court un.(ler article 136 of .the Constitution. Their powers are derived from the statute that creates~ them and·they h~ve to function within.tne limits 1rnposed·there (l). [19~,;1 2 S.C.R. 1315. . (2). (1950] S.C.R •.. S9, 497 9-Ll 061SupCij72

(1). [19S9] S.C.R. 12.

r~uirements of essential social needs, and measure of insurance against the more important misfortunes in-cluding old age. ·

Article 43 of our Constitution has also adopted as one of tht Directive Principles of State Policy that :

'The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, living wage, conditions of work ensuring decent standard of life and full enjqyment of leisure and social and cultural opportunities .... '

' This is the ideal to which our social welfare State has to approximate in an attempt to ameliorate the living conditions of the workers."

Shri Gupte, however, emphasised that in India living wage on standard prevalent in more advanced countries is not possible in 0 the present level of our national i~come.

Wage poliey relating to workmen appears to be complex and sensitive area of public policy. The reason is. plain. The relative status of workmen in the society, their commitment to . industry and their attitude towards the management, their motiva-E tion towards productivity and their standard and way of life; are all conditioned by wages. It is accordingly not purely economic policy in which the employer and the employee alone are interest-ed. Besides the worker a!ld the management, the consumer and the society at large and fortiori the State, are also vitally interested, and no wage policy can ever be applied in vacuum in disregard of the realities of the social and economic conditions in our country. Considering the question of wages in the back· ground of the Directive Principles enshrined in our Constitution wage structure. should serve to promote, fair remuneration to labour ensuring due social dignity, personality and security, fair re.tum to capital, and strengthen incentives to efficiency, without being -yfunindful of the legitimate interest and expectation of the consumer in the matter of prices. Guided by this principle, if the financial capacity of the industry permits, the workers should, broadly speaking, be allowed their due share in the prosperity of the industry, to which they have contributed by their labour so as to enable them, within reasonable limits, to improve their standard of living.

Turning now to the facts of the present case we are clearly of the view that the Tribunal has committed serious error in not considering the other allowances and amf'nities allowed to the

SUPREME COU.ItT REPORTS

orkmen and comparing their total wage packet with respondents-w . ket' of those ~o;yees to whom the allowance the . total ue:;tion has been allowed, wage pac · when etenru~ · · · this . question. · w q Tribunal has virtually decide:d the question ~ ISsue e_xclusi-~e on the bruris that rttt employer h~ the finanaal -capaatf to st~d the burden of such aUowance ~rng granted to thl? yrorksnen t th same rate as the higher staff, 'Wlth the same conditions. The ~ffe:encc between the. amenities allowed t~ the workme ~ ~d to the staff to whom the vaca·uon allowan'7 lS granted. must 111 law and justice be looked into and the question then dectded whether or not the present workmen's demand is justified: ~e principle of region-cum-industry bas no doubt to be kept tn· vtew but then the comparable industries in the region have to be considered from all the relevant aspects which have ~n laid down by this Court in various decisions to which it is unnecessary to refer, the .prind· pie being well settled. . The fact that in the re.fineries ·in the region similar allowance is granted as result of settlement cannot, on that account alone, be ~nsidered to be irrelevant · because that may appropriately indicate that the demand of the workmen in those industries was not considcied:wijust .. ·But to :what extent that should weigh with the l:.ribunal is for the Tribunal to decide in the light of all the relevant circurnstan~. The total wage packet of ~e various categories of employees in the . appellant's industty itself, including the question·of their nature of duties and functions, ·hOwever, deserves to be given .primary importam:e · so that the~e ~IS ·no reusonable Chanee of .heart.:burning and discontenh 1 ment. amo~t the different .categories :of wotkmen an ..aceoWlt of the differential tr~a~me:nt .which. though seemingly justifia•le. may; in real e!fec.t. be diSCtlnUnatory. The importance of appropriate stan~ard~uon of wag~ in the appellant-ind.u,my ori · proper C?n.qtderauon of the dut1es and functions ot the different . catego-dispute. • n.es of -employees ttlust ·be kept in 'View in deciding: the presont 1

We ~ould accordingly allow the appeals, set aside.' the awa!d ~~ ~~ th:r case ba?lc t? the Tribunal with direction .. to decide 1n the pec.uJia~r ~tde.ring all the· relevant factors. as . s~teJ. Costs, . ClrtWllStances of the . case there is DO order as to

i j i j.

1· 1, J i l l