Appeals Nos 195 and 196 of 1959
Appeals by special leave from the Award dated April 15 1957 of the Third Industrial Tribunal West Bengal in Case No VIII 7 of 1956
B Sen P K Chakravarty and B N Ghosh for the appellants in C A No 195 of 59 and respondents in C A No 196 of 59
N C Chatterjee D L Sen Gupta and B P Maheshwari for the respondents in C A No 195 of 59 and appellants in C A No 196 of 59
March 30
The Judgment of the Court was delivered by WANCHOO J
These are two appeals by special leave against the same award of the Third Industrial Tribunal West Bengal and shall be disposed of by this judgment
Appeal No 195 is by Messrs Burn and Co Limited hereinafter called the company and Appeal No 196 is by the workmen of Messrs Burn and Co Limited hereinafter called the workmen
There were disputes between the company and the workmen on various matters which were referred to the tribunal for adjudication
Of these disputes only two now survive in the two appeals
The company s appeal is with respect to that part of the award which deals with incentive bonus to the clerical and subordinate staff while the workmen s appeal is with respect to that part of the award which appeals with the cash benefit of Annas eight per head per working day for the period the canteen was not in operation
We shall first take up the company s appeal
The company has introduced incentive bonus for manual workers including Sarkars and Checkers but there is no provision for incentive bonus to the clerical and subordinate staff
The workmen therefore claimed that these two categories should also be given incentive bonus like the manual workers and pointed out 425 that in other concerns this was done
The company resisted the claim on two grounds i that the clerical staff got what is known as the Bengal Chamber of Commerce dearness allowance which is higher than the dearness allowance paid to the manual workers and ii that the clerical staff and the subordinate staff do not actually produce anything and if they are given incentive bonus it will mean that they would be paid on the production of others namely the manual workers
The tribunal was of the view that the fact that the clerks got the Bengal Chamber of Commerce dearness allowance was no reason for their total exclusion from the benefit of the incentive bonus scheme
It also pointed out that the subordinate staff did not get the Bengal Chamber of Commerce dearness allowance and there was no difference between their dearness allowance and the dearness allowance of the manual workers
Further the tribunal was conscious of the fact that the clerical staff and the subordinate staff do not directly produce goods but that in its opinion was no justification for their total exclusion particularly when other comparable concerns like the Indian Iron and Steel Co Ltd at Burnpur Bridge and Roof Co India Limited Howrah and Tatas were paying incentive bonus to the clerical and subordinate staff also
It therefore ordered that the company should extend the scheme of incentive bonus to the clerical and subordinate staff also and lay down the rates and conditions for the same
The main contention of the company before us is that as the clerical staff and the subordinate staff have no part in actual production they should not be given any incentive bonus particularly as their work does not increase at all because of the increased production
It is however difficult to accept that there will be no increase in the work of the clerical staff in particular and also of the subordinate staff because of higher production though it may be accepted that the increase may not be in proportion to the increase of production
It is also true that the clerical staff and the subordinate staff do not directly produce goods like manual workers and that may be a reason 426 for treating them somewhat differently in the matter of incentive bonus and that is what the tribunal seems to have done for it has directed the company to extend the scheme of incentive bonus to the clerical and subordinate staff and to lay down the rates and conditions of the same and has not said that exactly the same rates and conditions should apply to the clerical and subordinate staff as apply to the manual workers
But there can be no doubt that economically speaking the clerical staff and the subordinate staff also take part in the production and there is no reason therefore for excluding them altogether from the scheme of incentive bonus
Besides as the tribunal has pointed out in other comparable concerns incentive bonus is being paid to the clerical and subordinate staff
The fact that dearness allowance was paid to the clerical staff at a higher scale is also in our opinion no reason for depriving them altogether of the benefits of the incentive bonus scheme
It is also urged on behalf of the company that the introduction of incentive bonus is a management function and the tribunal should not impose it on the management and reference in this connection has been made to Messrs Titaghur Paper Mills Co Ltd vs Their Workmen 1
In the present case however the incentive bonus scheme has already been introduced by the company for the major part of its workmen and all that is now asked for is that the benefit of the scheme should be extended to the remainder of the workmen
This prayer is in our opinion very different from asking a tribunal to impose an incentive bonus scheme for the first time in a concern
We can see no reason why where an incentive bonus is in force in a concern for the majority of its workmen the tribunal should not be able to extend the same to the remainder of the workmen
We therefore see no reason to interfere with the order of the tribunal in this behalf Turning now to the appeal of the workmen with respect to eight annas tiffin allowance during the period the canteen was riot working it is enough to say that this matter was examined at length by the 1 1959 SUPP
2 SCR 1012
427 tribunal
It has dealt with the history relating to this tiffin allowance and exhaustively considered all the points raised on behalf of the workmen
Nothing has been brought to our notice which would induce us to interfere with the considered order of the tribunal in this behalf
All the points that Sri Chatterjee has raised on behalf of the workmen have been dealt with by the tribunal and the conclusion it has reached is that halving regard to the circumstances the workmen were not eligible to the tiffin allowance of annas eight per head per working day
All that we need say is that the correspondence between the workmen and the company shows that though the workmen were keen on the provision of a canteen before the tiffin allowance was granted by the award dated July 24 1953 their keenness disappeared after the award
The company seems to have taken steps even before the award to start a canteen and pursued the matter vigorously after the award but the workmen started objecting to the arrangements made and some of the objections were fantastic
It seems that having been given the tiffin allowance they preferred to have it rather than go to the canteen
In the circumstances we are of opi nion that the conclusion of the tribunal is correct and there is no reason for interference
The appeals are hereby dismissed but in the circumstances we pass no order as to costs
Appeals dismissed


Summary:
This was an appeal by certain textile mills of Ahmedabad against a scheme for gratuity awarded by the Industrial Court
The Labour Association the respondent gave a notice of change under section 422 of the Bombay Industrial Relations Act 1946 Bom
XI of 1947 intimating the Mill Owners  Association that they wanted a scheme for gratuity and mentioned four categories of termination of service in the annexure
This demand was refused and so referred to the Industrial Court under section 73A of the Act
Pending the reference the Employees  Provident Funds Act 1952 19 of 1952 came into operation and the Industrial Court on an objection by the Mill Owners  Association held that it was inadvisable to proceed with the reference and that a fresh application should be made if necessary after the scheme envisaged by the Act is introduced and rejected the respondent s demand
Thereafter a fresh notice of change was given by the respondent and there were certain references to the Industrial Court in respect of the demand
The parties came to an agreement to refer all their disputes to arbitration the references were withdrawn and the disputes were referred to the Board of Arbitrators
Before the Board the Mill Owners  Association took the objection that so long as the award of the Industrial Court dismissing the earlier reference subsisted the claim for gratuity could not be considered by it
That objection was upheld by the Board and it made no provision for gratuity
Thereupon the respondent applied for the modification of the award under section 116A of the Act and the Industrial Court by its award which is the subject matter of the present appeal framed a scheme for gratuity on an industry cum region basis Held that the decision of the Industrial Court was correct and must be upheld
Regard being had to the true nature of its earlier award and the scope of the application for its modification it could not be said that the respondent was seeking to alter the framework or change any of the principles of that award and the application under section 116A of the Act must be held to be competent
330 A scheme for gratuity is by its nature an integrated scheme and covers all classes of termination of service where gratuity benefit can be legitimately claimed and the refusal of the Industrial Court in the earlier award amounted to a refusal to frame any scheme at all
The statutory provident fund created by the Employees  Provident Funds Act 1952 could be no bar to the respondent s claim for a gratuity scheme although there can be no doubt that in awarding such a scheme Industrial Courts must make due allowance for it
Provisions of section 17 of the said Act clearly indicate that the statutory benefits under the Act are the minimum to which the employees are entitled and that they are no bar to additional benefits claimed by the employees
Indian Hume Pipe Co Ltd vs Their Workmen 1960 2 SCR 32 referred to
It was not correct to say that the claim for gratuity was essentially similar to a claim for profit bonus and must always be considered on unitwise basis
The benefit of gratuity is in the nature of a retiral benefit and before framing such a scheme industrial adjudication has to take into account such relevant factors as the financial condition of the employer his profit making capacity the profits earned by him in the past the extent of his reserves and the chances of his replenishing them as well as the claims for capital invested by him and in evolving a long term scheme a long view of the employer s financial condition should be taken and on that basis alone the feasibility of a scheme and the extent of the benefit to be given should be determined
Arthur Butler  Co Muzaffarpur Ltd and Arthur Butler Workers Union and Boots Pure Drug CO
India Ltd vs Their Workmen  referred to
Even assuming that gratuity is no part of deferred wage it would not be reasonable to assimilate the scheme for gratuity to that of profit bonus or to apply the principles of the Full Bench formula applicable to the latter
A claim for gratuity is strictly not a claim to receive a share of the profits at all
Express Newspapers Private Ltd vs The Union of India and Indian Oxygen and Acetylene Co Ltd Employees  Union vs Indian Oxygen and Acetylene Co Ltd  referred to
It was not correct to say that an industry wise basis is wholly inappropriate in dealing with gratuity or that the Industrial Court was in error in adopting that basis
Although some hardship to the weaker units in the industry may not be avoided there were several factors in its favour both from the point of view of employers and employees
Since in the present state of economic development in the country the propriety of the adoption of an all India basis for a scheme of gratuity may be open to doubt no exception can on principle be taken to the industry cum region basis adopted in the instant case
331 Express Newspapers Private Ltd vs The Union of India  applied