Case: Matchwel Electricals (India), Limited Vs. Its Workmen

Wanchoo, J.1. This is an appeal by special leave against the award of the industrial tribunal, Maharashtra, in a dispute between the appellant and its workmen. A number of matters were referred for adjudication to the tribunal by the Government of Maharashtra of which only three require consideration in this appeal, namely,(i) Wage-scales and dearness allowance,(ii) Gratuity, and(iii) Sick leave,2. The respondent-workmen demanded that the present system of paying consolidated wages should be split up into basic wages and dearness allowance. As to basic wages it was claimed by the respondents that there should be eight grades and certain scales were put forward in that connexion. As to dearness allowance, the claim was for payment at the rate of cotton textile workers in the City of Bombay. It may be mentioned that there is an incentive bonus scheme in force in the appellants company. The tribunal went into the question whether any change should be made in the incentive bonus scheme in case there was revision in the total wage packet and it was split up in to basic wage and dearness allowance. It directed that incentive bonus should be calculated according to the wages that were being paid at the date of the award, regardless of any new scales and dearness allowance that might be fixed there-under. There is no dispute about this direction of the tribunal. The appellant however contends that the grades of basic wages and dearness allowance fixed by the tribunal are very high and in any case the tribunal was not right in taking into account for purposes of comparison the grades of basic wages fixed in the three concerns on which the respondents relied, namely, Ruston & Hornsby, Kirloskar Oil Engines, and Mahindra and Mahindra. Lastly, it is urged that even if the basic wage paid these concerns is taken into account there has been an error in the calculations of the tribunal which has vitiated the award. This error, it is pointed out, is that the wages in these three concerns are fixed at daily rates and to arrive at the monthly rate the daily rate is to be multiplied by 26. But the tribunal has by mistake or oversight mulitplied the daily rate by 30 for purpose of comparison and has fixed grades of basic wages in the appellant-concern on that basis. This has introduced a fundamental error in the fixation of basic wages which has resulted in these wages going much higher than they would otherwise be.We do not think that it is possible to quarrel with the tribunals decision to split up the consolidated wages paid heretofore in this concern into basic wages and dearness allowance. As the tribunal has rightly pointed out, fixation of basic wages and dearness allowance is the general pattern evolved in order to neutralize the rising cost of living and we do not see any reason to differ from the view of the tribunal that the consolidated wages paid in this concern should be divided into basic wages and dearness allowance. Nor do we think that the tribunal was wrong in taking into account for purposes of comparison the wages paid in the three concerns already mentioned. These concerns are in the same region and belong to allied industries, and in the circumstances we are of opinion that the tribunal could take these concern into account for purposes of comparison. There is, however, force in the last contention urged on behalf of the appellant, namely, that the tribunal has made a mistake in multiplying the daily rate paid in these three concerns by 30 instead of 26. Learned counsel for the respondents fairly conceded that this mistake has apparently been made by the tribunal. The result of this mistake obviously has been that higher wages have been taken for comparison with the consequence that higher wages have been fixed in this concern than would otherwise be possible if the multiplier was 26 and not 30. Further it has been pointed out on behalf of the appellant that in fixing dearness allowance also a similar mistake has been made because the tribunal itself with regard to Ruston & Hornsby had decided to give to 75 per cent neutralization of the cost of living at Sholapur on the minimum basic wages of Rs. 26. There is force in this contention also. We are therefore of opinion that the case will have to be remanded to the tribunal for refixing the grades of pay and dearness allowance after correcting this mistake which has crept in by inadvertence. We therefore set aside the award as to grades of basic Wages and dearness allowance and direct the tribunal to refix the grades of basic wages and dearness allowance after correcting the mistake pointed out above.So far as sick leave is concerned, it appears that the appellant agreed to grant fifteen days sick leave per year with the right to accumulate it for two years till the introduction of the Employees State Insurance Scheme. The tribunal accepted this and has ordered accordingly. In the circumstances we fail to see how the appellant can succeed in his appeal as to sick leave. We therefore reject the appeal so far as sick leave is concerned.3. Lastly, we come to the question of gratuity. It appears that the appellant has got a provident fund scheme under the Employees Provident Funds Act. The respondents demanded an additional retrial benefit in the form of gratuity, and the appellants contention was that it was not possible in view of its financial position to provide for a second retrial benefit. We are not satisfied that the appellant will not be able to bear the burden of a second retrial benefit and therefore see no reason to disagree with the tribunal in this matter. The scheme introduced by the tribunal is the same which it awarded in the case of Ruston & Hornsby. It appears to us to be a fair scheme. In the circumstances the appeal with respect to gratuity must also fail.

Decision reasoning: 1[ds]Lastly, it is urged that even if the basic wage paid these concerns is taken into account there has been an error in the calculations of the tribunal which has vitiated the award. This error, it is pointed out, is that the wages in these three concerns are fixed at daily rates and to arrive at the monthly rate the daily rate is to be multiplied by 26.But the tribunal has by mistake or oversight mulitplied the daily rate by 30 for purpose of comparison and has fixed grades of basic wages in theon that basis. This has introduced a fundamental error in the fixation of basic wages which has resulted in these wages going much higher than they would otherwise be.We do not think that it is possible to quarrel with the tribunals decision to split up the consolidated wages paid heretofore in this concern into basic wages and dearness allowance. As the tribunal has rightly pointed out, fixation of basic wages and dearness allowance is the general pattern evolved in order to neutralize the rising cost of living and we do not see any reason to differ from the view of the tribunal that the consolidated wages paid in this concern should be divided into basic wages and dearness allowance. Nor do we think that the tribunal was wrong in taking into account for purposes of comparison the wages paid in the three concerns already mentioned. These concerns are in the same region and belong to allied industries, and in the circumstances we are of opinion that the tribunal could take these concern into account for purposes of comparison. There is, however, force in the last contention urged on behalf of the appellant, namely, that the tribunal has made a mistake in multiplying the daily rate paid in these three concerns by 30 instead of 26. Learned counsel for the respondents fairly conceded that this mistake has apparently been made by the tribunal. The result of this mistake obviously has been that higher wages have been taken for comparison with the consequence that higher wages have been fixed in this concern than would otherwise be possible if the multiplier was 26 and not 30. Further it has been pointed out on behalf of the appellant that in fixing dearness allowance also a similar mistake has been made because the tribunal itself with regard to Ruston & Hornsby had decided to give to 75 per cent neutralization of the cost of living at Sholapur on the minimum basic wages of Rs. 26. There is force in this contention also. We are therefore of opinion that the case will have to be remanded to the tribunal for refixing the grades of pay and dearness allowance after correcting this mistake which has crept in by inadvertence. We therefore set aside the award as to grades of basic Wages and dearness allowance and direct the tribunal to refix the grades of basic wages and dearness allowance after correcting the mistake pointed out above.So far as sick leave is concerned, it appears that the appellant agreed to grant fifteen days sick leave per year with the right to accumulate it for two years till the introduction of the Employees State Insurance Scheme. The tribunal accepted this and has ordered accordingly. In the circumstances we fail to see how the appellant can succeed in his appeal as to sick leave. We therefore reject the appeal so far as sick leave is concerned.3. Lastly, we come to the question of gratuity. It appears that the appellant has got a provident fund scheme under the Employees Provident Funds Act. The respondents demanded an additional retrial benefit in the form of gratuity, and the appellants contention was that it was not possible in view of its financial position to provide for a second retrial benefit. We are not satisfied that the appellant will not be able to bear the burden of a second retrial benefit and therefore see no reason to disagree with the tribunal in this matter. The scheme introduced by the tribunal is the same which it awarded in the case of Ruston & Hornsby. It appears to us to be a fair scheme. In the circumstances the appeal with respect to gratuity must also fail.