IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE:23-11-2009 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI W.P.Nos.4938 and 5833 of 2009 ..... The Management of Bata India Limited Plot No.73 & 74, SIPCOT Industrial Complex Hosur 635 126. ... Petitioner in WP.4938/2009 Hosur Bata Employees Union (Regn No.406/97 DRP) rep. By its General Secretary Door No.New 1/484, Old 1/328 M.G.R.Nagar, Mookandapally Hosur, Krishnagiri District. ... Petitioner in WP.5833/2009 vs. 1.The Presiding Officer Industrial Tribunal Tamil Nadu Chennai 600 104 ... Respondent No.1 in both Wps 2.The Workmen rep. By Podhu Seyalalar Hosur Bata Employees Union Door No.1/484, M.g.R.Nagar Mookkandapalli Hosur 635 126. ... R.2 in WP.4938 of 2009 3.The Management of Bata India Limited Plot No.73 & 74, SIPCOT Industrial Complex Hosur 635 126. ... R.2 in WP.No.5833 of 2009 Writ petitions filed under Article 226 of the Constitution of India for the issue of a writ of Certiorari as stated therein. For petitioner : Mr.A.L.Somayaji,Sr.Counsel & R.2 in WP.5833/09 for M/s.T.S.Gopalan & Co., For respondent No.2: Mr.V.Prakash,Sr.Counsel in WP.4938/09 & for Mrs.Ramapriya Gopalakrishnan petitioner in WP.5833/09 .. https://hcservices.ecourts.gov.in/hcservices/ COMMON ORDER 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. 2. 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 facotry 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 https://hcservices.ecourts.gov.in/hcservices/ 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? https://hcservices.ecourts.gov.in/hcservices/ (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? https://hcservices.ecourts.gov.in/hcservices/ (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?" 3. 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., https://hcservices.ecourts.gov.in/hcservices/ 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 https://hcservices.ecourts.gov.in/hcservices/ 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 https://hcservices.ecourts.gov.in/hcservices/ 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 https://hcservices.ecourts.gov.in/hcservices/ 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. 4. 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. https://hcservices.ecourts.gov.in/hcservices/ 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