Case: West Coast Paper Mills Limited Vs. West Coast Paper Mills Limited Employees' Union & Another

H. SURESH, J.This is an appeal filed by the appellant-company as against their Employees Union, against an order dated January 23, 1986 whereby the learned Single Judge was pleased to dismiss their Writ Petition No. 2157 of 1983.2. The appellant-company manufactures paper and its factory is situated at Dandeli in Karnataka State. The Administrative Officer of the company is situated at Bombay and staff members such as clerks, stenographers, typists, drivers, peons, sweepers, etc. were in the Administrative Officer. In 1968 the respondent Union, on behalf of the workmen at the head-office, had raised certain demands relating to wage-scales dearness allowance, gratuity etc. They were referred to the Industrial Tribunal then presided over by Mr. R.D. Tulpule. The said Tribunal made an award on June 3, 1972. Since then the service conditions relating to wage scales and dearness allowance were governed by the provisions of that award.3. Sometime in 1974 the first respondent union raised a fresh charter of demands relating to wage-scales, dearness allowance, etc. The said dispute was referred to the Industrial Tribunal of Mr. B.B. Tambe being reference (IT) No. 97 of 1976. He made an award fixing basic wages as also the dearness allowance. Before the Industrial Tribunal, on behalf of the Union, it was contended that comparable industries were M/s. Hindustan Ferodo Ltd. and Rallis India. Both the sides produced evidence before the Industrial Tribunal in support of their contentions and after considering all the aspects, the Tribunal came to the conclusion that M/s. Hindustan Ferodo Ltd. was a comparable concern and the employees of the appellant company are entitled to get basic pay and dearness allowance which would be very near to the comparable level with the employees of M/s. Hindustan Ferodo Ltd.4. As against this award, the appellant filed a writ petition in this High Court, being Writ Petition No. 617 of 1980. By a judgment and order dated April 28, 1981 the learned Single Judge upheld that part of the award determining the basic wages of the employees. However, he set aside that part of the award determining the fixed dearness allowance and variable dearness allowance and the proceedings were remitted back to the Industrial Tribunal for fresh determination. He further directed that while determining that issue the Tribunal shall determine as to whether slab system should be employed while fixing the dearness allowance in the light of the observations made by Mr. Tulpule in his earlier award and in the light of any other material which either party should produce before the Tribunal. He also directed that the Tribunal would also determine whether the minimum variable dearness allowance should be fixed on the basis of 5 per cent as determined by the Union or on any other amount which, according to the Tribunal, is proper on the basis of the material which either party was at liberty to produce before it. He directed that the Tribunal should dispose of the matter and make the final award within a period of six months from that date and the writ petition was disposed of.5. Accordingly, the matter in so far as it relates to the fixation of dearness allowance was referred to the Industrial Tribunal of Mr. S.D. Rane. The Industrial Tribunal took into account the comparable concerns and took note of the fact that according to the Union, M/s. Hindustan Ferodo Ltd. and Rallis India are the comparable concerns. While according to the appellant Company Digvijay Cement Company was a better comparable concern than the other two concerns. However, after considering all the facts and as stated by the earlier Tribunals he came to the conclusion that M/s. Hindustan Ferodo Ltd. was more comparable to the present Company than all the other concerns. It is on that basis, he proceeded to consider the rival contentions of the parties.6. In this process he had to take into account the fact that the basic wages in case of M/s. Hindustan Ferodo Ltd. are not similar in comparison to the basic wages in the present Company. The basic wages of a sweeper in the case of present Company is Rs. 212/- per month, whereas the basic wages in the case of M/s. Hindustan Ferodo Ltd. stands at Rs. 50/- per month. However, the total wages in M/s. Hindustan Ferodo Ltd. was higher than the total wages in the present Company as the Cost of Living Index (hereinafter referred to as the "C.L.I.") goes on increasing. However, the Tambe-Tribunal had awarded a slab system being conscious of the fact that the wages and dearness allowance shall be so fixed as to equitable compare with those comparable concerns. It is on this basis he also came to the conclusion as in the case of Tambe-Tribunal that the total wage-packet shall have to be fixed in such manner as to be more or less similar to pay packets of M/s. Hindustan Ferodo Ltd. He accordingly prescribed to maintain the same dearness allowance system as prescribed by Mr. Tambe. Accordingly, he passed the following order fixing the dearness allowance at C.L.I. 1.296 :-"Salary Slab Fix Variation perD.A. 10 points rise/ Rs. fall index.Rs. 1-Rs. 100 175 5 per cent.Rs. 101-Rs. 200 175 Plus 2 per cent Plus 5 per 80 cent on first 100 basis.Rs. 201 and above 175 Plus 1 per cent 5 per 80 Plus cent above 2 per 40 cent on second 100 basis."7. The appellant Company once again challenged this by filing another writ petition, being Writ Petition No. 2157 of 1983. The learned Single Judge accepted the Tribunals approach when it observed that the total wage packet of the employees of the petitioner Company shall have to be fixed in such a manner as to be more or less similar to the total wage-packets of M/s. Hindustan Ferodo Ltd. He further observed that to achieve that object, it is necessary to maintain the proposed dearness allowance system prescribed by the Tambe-Tribunal and he found no infirmities in the reasoning recorded by the Tribunal. He also observed that when the matter was remanded back to the Tribunal it was for the Company to assist the Tribunal and if the proposed dearness allowance scheme was to impose any additional burden upon the employer, the Company ought to have placed all the facts before the Tribunal. The learned Judge observed that the employer-Company had deliberately failed to assist the Tribunal and the impression was left that every effort was made to mislead the Tribunal with a probable expectation that the matter would be again remanded and the Company can successfully delay making payment to the employees. In the result, by an order dated January 23, 1986, the writ petition was dismissed.8. The present appeal is against this order of the learned Single Judge. However, when the appeal reached for final hearing on July 29, 1988, both the parties obtained the following order:"Counsel are agreed that the Industrial Tribunal do re-fix scale of Dearness Allowance payable to workers of the Appellants at their Administrative Office at Bombay (the subject matter of Reference No. LT No. 97 of 1976) on the basis set out hereinafter :(a) In 1976 Hindustan Ferodo Ltd., was a concern comparable to the appellants.(b) The Industrial Tribunal may retain the slab system, subject to what is stated hereinafter.In fixing the rate of fixed and variable Dearness Allowance and the slabs, the Industrial Tribunal shall ensure that the total pay packet (consisting of basic plus D.A. plus production bonus plus all allowances) of the appellants said workmen shall be more or less similar to the total pay packet (consisting of basic plus D.A. plus production bonus plus all allowances) of workmen in the equivalent category of Hindustan Ferodo Ltd. from time to time.The Industrial Tribunal shall so re-fix the scale of D.A. within 2 months from today.The President of the Industrial Tribunal shall assign the matter to a particular member for the purpose."Thereafter the appeal was adjourned to a later date.9. The matter on the question of fixation of dearness allowance thus went back to the Tribunal presided over by Mr. S.V. Vaze. Mr. Vaze by his order dated January 9, 1989 made an award which in his own words was not a "valid proposition" but was only made as "unavoidable solution". What he did was something, as described by Mr. Menon, Advocate for the respondent-union, in the nature of an application of procrustean table. He confessed that he was unable to accept the challenge that was offered to him. Perhaps, he thought that he was required to perform mathematical jugglery whereby the total pay-packet (consisting of basic pay, dearness allowance, production bonus and all allowances) of the workmen at every given point of time should be the same as the pay-packet (consisting of basic pay, dearness allowance, production bonus and all allowances) of the workmen having put in the same number of years of service in M/s. Hindustan Ferodo Ltd. He ignored the fact that the span of service of each of the category of the workmen in the present Company was not comparable to that of M/s. Hindustan Ferodo Ltd. He also ignored the fact that in the present Company, the basic wages at the commencement were at the higher level than that of the workmen of M/s. Hindustan Ferodo Ltd. So also at the maximum level. He rejected the contention of the Union that the workmen in the appellant-Company work for 19 hours more than Hindustan Ferodo workers per month. He rightly did not take into account superannuation contribution as also considerations pertaining to gratuity. But he included the personal pay and medical benefit of 4 per cent which were being paid since 1980.10. For the purpose of striking a party, the position for the months of March 1976, January 1980, January 1983, January 1986 and June 1988 of both the establishments was taken for study. That was done because during those months, there was a settlement amongst the workmen and the management of M/s. Hindustan Ferodo Ltd. which had in one way or the other increased the pay packet of the workmen. Further, he observed that only the minimum and the maximum of the wage scale of equivalent categories are taken for study since if to some extent a parity is reached at these extreme two points, the same trend may reflect at any point of time in between. On the basis of this he prepared a set of tables showing the position of the concerns, as in March 1976, January 1980, June 1983, January 1986 and June 1988. He noticed that in the later years there is a wise disparity in the total pay-packet of each category of workmen both at the minimum level and at the maximum level. The disparity is bound to be there because in the Appellant-Company the span of each category of workmen is shorter, and the basic wages is throughout higher at both the terminal points. He had earlier diagnosed that the solution lies if "to some extent parity is reached at these extreme points". Instead of arriving at an equitable solution on the basis of parity at these points, he gave up the attempt as a hopeless task. What he did to quote his own words, is as follows :"As 4 plus 4 can never become 10, nor 6 plus 6 can do it, the serviceable substitute which primary arithmetic offers to achieve the result of 10 is of adding 2 in one case or by substract in 2 in the other case. Providing the minimum or putting a ceiling in the D.A. pattern is not totally unknown and adopting that course alone appears to be the answer for the present case to reach to the set goal. A rider on the D.A. pattern to the effect that amount of D.A. calculated on the basis of the said D.A. pattern, shall be substracted by or added to, as the case may be, by such amount as to make the total amount of pay packet equal to the total amount of pay-packet for the same period to similarly situated workmen of the H.F. belonging to the equivalent category, would meet requirement of the case. What are the equivalent categories between the two establishments, is already set down and what is paid by H F to similarly situated workmen from equivalent category is ascertainable from that company."In the result, he modified the Tambe-Award as repeated by Mr. Rane by additing against all the slabs therein a common condition/rider to the following effect:"Provided that the amount of D.A. calculated should be raised or lowered, as may be required, so that the total pay packet of the concerned workmen shall be equal to the pay-packet for the same period of similarly situated workmen belonging to equivalent category from M/s. Hindustan Ferodo Ltd."11. Here again, we find that the appellants have not assisted the Tribunal in any manner by suggesting a rational basis either for fixation of the slabs or for the fixation of dearness allowance on equitable basis. In fact, the Union had provided and furnished to the Tribunal with a formula which would have met the requirements of the reference. But, surprisingly the Tribunal did not even refer to it, nor did it care to consider the same. In our opinion, Mr. Vazes award is no award. In fact, to say the least, it discloses a total lack of perspective and rational approach in the matter. If the same is given effect to, it leads to a wholly perverse situation, if not disastrous to the interests of the workmen. The learned member misunderstood the reference when he thought that the sole object of the reference was to give the same basic wages and other terms and conditions as in the case of M/s. Hindustan Ferodo. That was not the case. 12. It is true that the concerned workmen of the Appellant Company must get an equivalent pay-packet which a similarly situated work men in M/s. Hindustan Ferodo Ltd. would get. What is the meaning of the words "similarly situated workmen" How would one re-fix a scale of dearness allowance in comparison to the scale of another concern which is accepted as the criteria applicable to the case. There cannot be a mathematical equation unless in both the concerns the basic wages and all other conditions of service are identical. Therefore, what was expected of Mr. Vaze was rationalisation and fixation of scale of dearness allowance on the basis of a similar scale as found in M/s. Hindustan Ferodo Ltd. In that he had to take into account the span of service of each category of workmen and the slab system, in both the concerns. How would one equate the dearness allowance at the minimum and at the maximum levels, the two extreme points, is the crucial point. Parity as to be achieved within these two limits and in that it should be more or less similar to one another. Mr. Vaze missed this approach altogether.13. Mr. Menon has demonstrated how this mathematical equation based on the common condition/rider has resulted in such apparent distortions is the wage packets between two employees both getting the same basic wages. It is elementary that workmen drawing the same basic wages should get the same dearness allowance. But if Mr. Vazes formula is accepted, in number of case where the basic wages is the same, the dearness allowance differs. For example in number of cases where the basic wage of the workmen is Rs. 1,155/- per month, if Mr. Vazes formula is applied, the total pay-packets differ, varying to the extent of over Rs. 1,000/- per month. For example, in the case of one G.L. Bang, whose basic salary is Rs. 1,155/-, he is equated with a person drawing basic wages at Rs. 513/- in M/s. Hindustan Ferodo Ltd. and if dearness allowance is calculated at that rate, his total emoluments come to Rs. 2,960.80. But in the case of another employee by name L.N. Daga, his basic wages again is Rs. 1,155/-, but he is equated with a person drawing Rs. 160/- in M/s. Hindustan Ferodo Ltd. and dearness allowance, if calculated on that rate, his total emoluments come to Rs. 1,778.50. Similarly, in the case of a person by name S. Raman, whose basic wages is Rs. 1,060/-, he is equated with a person drawing Rs. 496/- in M/s. Hindustan Ferodo Ltd. and the total emoluments of his come to Rs. 2,760.20. But in the case of another employee by name S. Ramalingam, whose basic wages is the same as that of S. Raman, he is equated with the person drawing a sum of Rs. 96/- in M/s. Hindustan Ferodo Ltd. and on that basis his pay-packet would come to Rs. 3,367.2-. The Union has, in fact, cited the case of about 36 employees and how in the case of each of them who are drawing the same basic wages would get different dearness allowance if Mr. Vazes scheme is to be applied.14. Since the reference to Mr. Vaze was by virtue of a consent order dated July 29, 1988, we have made it clear to both the parties that it is not possible for them to re-open the earlier awards. Similarly it is also not open to the parties to contend that M/s. Hindustan Ferodo Ltd. was not a concern comparable to the appellants. In fact, both the Tambe-Award and also the Rane-Award and thereafter the learned Single Judge, all had come to the conclusion that in 1976 M/s. Hindustan Ferodo Ltd. was a concern comparable to the appellants. Similarly, the Industrial Tribunal was required to re-fix the scale of dearness allowance and in fixing the pay scale, the Industrial Tribunal was required to ensure that the total pay-packet of the Appellants workmen (consisting of basic pay, D.A. plus production bonus plus all allowances should be more or) less similar to the total pay-packet (consisting of basic pay + D.A. + Production Bonus + all other allowances) of workmen in the equivalent category of M/s. Hindustan Ferodo Ltd. from time to time. It envisages neither refixation of basic wages, nor did it envisage alteration of any of the service conditions of the workmen of the Appellant Company. 15. When the Tambe Award was before the learned Single Judge, he had only set aside that part of the award which related to fixation of dearness allowance. Otherwise, all other findings recorded in the award passed by M/s. Tambe had been confirmed by the learned Judge and there is no appeal against the same. Thereafter when Mr. Rane accepted the broad approach of Mr. Tambe and fixed the dearness allowance, the learned Single Judge confirmed the said approach and dismissed the writ petition. But, it is significant to note if Mr. Rane could not think of any other solution than confirming the Tambe-award, it as done mainly because the Company had failed to assist the Tribunal. That position continues even in the present case, and there has been no assistance from the Company as far as Mr. Vaze was concerned. Though, the appellants had filed a formal objection to Mr. Vazes award the same has not been pressed before us and Mr. Srikrishna has categorically stated that the appellant Company would accept Mr. Vazes recommendation whether it is satisfactory or not. On the other hand, the Union has rightly objected to this award as the same is wholly unsustainable.16. During the course of the hearing before the earlier Bench to which one of us (Suresh, J.) was a party, efforts were made to work out an amicable solution and in that process Mr. menon and Mr. Srikrishna sat together, tried their best to resolve the matter on an agreed formula. In fact, some of those formulas were handed over to the Court and by and large the reaction of the Bench was that the Union was more than charitable in its approach. But the appellant Company was not willing to accept any such solution. The continuance of the dispute was obviously more in the interests of the Company than that of the workmen. During all these fourteen years of litigation, the Company took shelter under various interim orders passed from time to time. They paid the basic wages and half the dearness allowance on an ad-hoc basis. They could withhold contributions of provident fund and other superannuation benefits on the unpaid dearness allowance. They would not declare production bonus, all on the basic that the matter is pending in the Court. In fact, Mr. Srikrishna submitted that if Mr. Vazes award was not satisfactory, the matter again be remanded back, a submission which we will have no hesitation to reject. It is neither fair nor proper that this litigation should be allowed to continue any further. Mr. Menon points out that during all these years, the total number of workmen has come down from 75 to 20. Today there are 12 peons, one sweeper, 6 clerks and 1 tale operator. Some are dead and some are retrenched. The Companys insistence on not agreeing to any reasonable formula in patently unjust. Despite the fact that the Company had not genuinely assisted any of the Tribunals, in this behalf we are of the opinion that we can ourselves arrive at a reasonable solution.17. In the Administrative Office of the Appellant-Company, there are the following workmen with the wage-scales as shown against each category.Sweeper : 212-4-252-5-272-6-302.Peons : 240-6-270-8-310-10-360.Drivers : 260-8-300-9-345-30-395-11-428.Typists, Telephone :and Teleprinter : 320-10-370-20-470-30-62-Operator : EB-50-770.Clerks A : 320-10-370-20-470-30-620-50820.Clerks B : 425-20-505-30-655-50-855-60-975.Comptist : 425-20-525-30-675-50-875.Stenos Jr. : 425-20-525-30-675-50-825.Stenos Sr. : 525-25-600-50-800-60.920-70.: 1060.P.A., Office Assistant,Head of Section, :Cashier. : 630-60-930-75-1155There is no dispute that these categories have been equated with the categories of employees in M/s. Hindustan Ferodo Ltd. as follows :The West Coast Paper Mills Ltd. M/s. Hindustan Ferodo Ltd.Sweepers : SweepersPeons : PeonsDrivers : DriversTypist, Telephone and : Clerks, Typist Clerks.Teleprinter Operator,Clerk - A.Clerk - B, Comptist,Stenographer Jr. : Assistants, Stenographers, : Comptist.Stenographer Sr. : Section Heads, S.M. & Accountant : Secretaries, D.M.s Secretary, : Purchase Manager Secretary.P.A., Office Assistant Head of Section, : Cashier, Directors SecretariesCashier. : Companys Secretaries/: Secretary.18. But in the appellant-Company the span of each of the category as also the minimum basic wages and maximum basic wages is much different from that of M/s. Hindustan Ferodo Ltd. as can be seen here under :The West Coast M/s. Hindustan Paper Mills Ltd. Ferodo Ltd.------------------------- ---------------------------------Post Span : Minimum Maximum Span : Minimum MaximumYears Wages Wages Years Wages WagesRs. Rs. Rs. Rs. Sweeper 19 212 302 22 50 249Peons 15 240 360 22 55 296Drivers 18 260 428 22 90 382Typist, :Telephone: 18 320 770 22 120 530Operator, :Clerk-A,Clerk-B, 15 425 975 : (Assistants, Steno-graphers, : Comptist)Comptist 14 425 875 : 22 185 698Stenogra-pher Jr. 13 425 825 :Stenogra-Pher 11 525 1060 22 340 988P.A. OfficeAssistant,Head of 8 630 1155 22 340 988Section,Cashier.There is also a service condition in the Appellant-Company whereby these workmen get automatic promotion from one grade to another grade after reaching the end of the earlier grade. By virtue of this automatic promotion workmen reach maximum of the highest grade in about 23 years of service, whereas there is no such service condition in M/s. Hindustan Ferodo Ltd. 19. According to Mr. Vaze as also according to the argument of Mr. Srikrishna the total pay-packet of a workman at any given point of time in the Appellant-Company must be the same as that of a workman of an equal cadre having put in the same number of years in M/s. Hindustan Ferodo Ltd. For example, according to him, if a Cashier at the end of eight years in the Appellant-Company reaches the maximum of his scale of basic wages, he cannot be paid dearness allowance that is due and payable at the maximum level inasmuch as at the end of eight year a Cashier in M/s. Hindustan Ferodo Ltd. does not reach the maximum level and will have much lesser basic wages as also consequently lesser dearness allowance. The argument is wholly untenable. This would at once exclude all dearness allowance paid by M/s. Hindustan Ferodo Ltd. over and above basic wages of Rs. 536/-, paid at the end of the eight year for a cashier who has to wait for another fourteen years to get the maximum salary, while in the Appellant-Company that maximum is reached in the eight year itself. To deprive him to his maximum dearness allowance merely because in M/s. Hindustan Ferodo Ltd. at the eight year of service, a Cashier is paid much less, is highly irrational, if not patently unjust. So also in the case of all other categories of workmen. Thus, if Mr. Vazes award is to be accepted, it will materially alter the service conditions of the workmen of the Appellant-Company, for which there can be no justification whatsoever.20. It is significant to note that when the matter was referred to the Industrial Tribunal to re-fix the scale of dearness allowance payable to the workers, it was made clear that the Tribunal may retain the slab system, and while fixing the pay-scales it has to take into account the total pay-packet of similarly placed category of workmen between the Appellant-Company and M/s. Hindustan Ferodo Ltd., and the same should be made more or less similar to each other. What is relevant is not the years of service. Dearness allowance is not fixed on the basis of the years of service. Dearness allowance has to be fixed at any given point of time on the basis of the basic wages and the slab. If the same has to be fixed in comparison to another concern without affecting the basic wage structure, the two extreme points in the two concerns have to be fixed. If the span of one is shorter than the other, there has to be some acceleration in between, so as to make the two wage structures including all allowances more or less equal. That was the rational meaning of the order whereby the matter was remanded to Mr. Vaze.21. In this connection, it must be appreciated that the respondent Union, in fact, submitted a revised dearness allowance scheme which would retain the slab system and at the same time would make the total pay packet of a workman of the Appellant-Company comparable to the workman of M/s. Hindustan Ferodo Ltd. in equivalent categories as nearest as possible. The Industrial Tribunal unreasonably declined to take that into account. After hearing the advocates on either side and taking into account the merits of the dearness allowance scheme submitted by the Union, we consider that the proposed dearness allowance scheme as submitted by the Union was the most reasonable one and was most satisfactory. The said dearness allowance scheme at C.L.I. 1296 is as follows:"Basic Salary Fixed D.A. Variable D.A. Variable D.A.for every or every 10 points 10 pointsrise or fall rise or fall upto CLI 3300 aboveCLI 3301Rs. 1 to 100 160% (Plus) 5% (plus) 4% (plus)Rs. 101 to 200 80% (Plus) 2% (plus) 1.5% (plus)Rs. 201 and above 40% 0.75% 0.75%"On the basis of this, the Union prepared a detailed Chart showing the total wages that may be calculated. We have seen the said Chart at pages 242 to 249 in the paper book at Vol. IV. In fact, the said Chart shows that though at the initial stage at CLI 1296 in the case of certain categories of workmen the Company may have to pay a slightly higher amount than M/s. Hindustan Ferodo Ltd. But at later stage as the CLI increases from time to time, the Company pays much less than what M/s. Hindustan Ferodo Ltd. would pay to such workmen. One fails to understand as to why this cannot be accepted by the Company. This has the advantage of not interfering with the span of service and also the minimum and maximum payable with regard to basic wages in the case of each category of workmen.22. The respondent-Union had submitted that for the purpose of equating the two wages packets, it is necessary to take into account the fact that the workmen of the Appellant company work 19 hours per month more than the number of hours put in by the workmen of M/s. Hindustan Ferodo Ltd. Mr. Vaze rejected this submission on an erroneous ground that both the workmen are paid monthly rated wages and not hourly rates wages. Mr. Vaze ought to have known that there can be no wages packet without any relation to the working hours. In a year, the workmen of the Appellant-Company put in approximately 37 more than the number of days/hours put in by the workmen of M/s. Hindustan Ferodo Ltd. For the purpose of comparing the two wage structures, that was a very relevant component which could not have been ignored at all. It is not that such a factor is unknown to such a Tribunal in any fixation of wage structure. If this component is taken into account, on the scheme proposed by the Union as set out above, it is the workmen who suffer greater loss than the management. A look at the chart would clearly show that by and large the workmen would get less than the workmen in M/s. Hindustan Ferodo Ltd. would get throughout. But since the Union is prepared to accept this, we cannot appreciate why the management wants to reject unless their object is to defeat the legitimate claim of the workmen.23. Mr. Srikrishna pointed out that this proposed dearness allowance scheme does not take into account the personal pay, production bonus and medical reimbursement. His submission is that if those three items are taken into account, the total pay-packet would exceed than that of M/s. Hindustan Ferodo Ltd. in the case of each of the category of workmen. As against this, Mr. Menon pointed out that as far as personal pay was concerned, when the dispute was referred to the Industrial Tribunal initially, there was no personal pay as such. He submitted that it was payable only to those workmen who were on the pay-roll of the Company as on October 31, 1979, and the same was fixed at 16.5% of the then existing basic salary upto Rs. 750/- and for the basic salary of Rs. 751/- and above the percentage was 10.095. From January 1, 1980 the personal pay was constant at that rate and at that amount. Mr. Menon also pointed out as to how the statement filed by the Company in this behalf is misleading, as if all the categories of workmen get such personal pay, though, in fact, all the workmen appointed on or after November 1, 1979 are not eligible to get any personal pay. We are, therefore, not inclined to attach any importance to this item. Even otherwise, we are of the opinion that even if this item is included in the pay-packet it would not make any great difference, as far as the total pay-packet is concerned, inasmuch as under the proposed scheme the workers get much less than what their counterpart would get in M/s. Hindustan Ferodo Ltd. The personal pay would not even off-set the loss they are willing to bear.24. The second item relates to production bonus. Mr. Srikrishna pointed out that production bonus is being calculated on the basis of basis wages plus dearness allowance. Mr. Menon had made a categorical statement, and repeats now, that the workmen would not insist upon the production bonus being calculated on the basis of the basic wages plus dearness allowance. In other words, he stated that the workers would restrict their claim of production bonus at the rate of 6% only on the basic wages and personal pay. This would, in effect answer grievance of Mr. Srikrishna. Mr. Menon submitted that, in fact, production bonus is a fluctuating figure and it depends upon the agreements between the workmen and the Company, from time to time.25. The third objection relates to the medical reimbursement. In fact this is no allowance, forming part of the pay-packet of the workmen. It is not an amount uniformly paid as a part of the pay-packet month after month. It is a contingent payment. This is only a reimbursement of actual medical expenses incurred during the sickness and the same is paid against the medical certificates, bills etc. but subject to 4 per cent of the basic wages. We cannot understand as to how the Company says that this should be included in the basic wages as such.

Decision reasoning: 1[ds]9. The matter on the question of fixation of dearness allowance thus went back to the Tribunal presided over by Mr. S.V. Vaze. Mr. Vaze by his order dated January 9, 1989 made an award which in his own words was not a "valid proposition" but was only made as "unavoidable solution". What he did was something, as described by Mr. Menon, Advocate for thein the nature of an application of procrustean table. He confessed that he was unable to accept the challenge that was offered to him. Perhaps, he thought that he was required to perform mathematical jugglery whereby the total(consisting of basic pay, dearness allowance, production bonus and all allowances) of the workmen at every given point of time should be the same as the(consisting of basic pay, dearness allowance, production bonus and all allowances) of the workmen having put in the same number of years of service in M/s. Hindustan Ferodo Ltd. He ignored the fact that the span of service of each of the category of the workmen in the present Company was not comparable to that of M/s. Hindustan Ferodo Ltd. He also ignored the fact that in the present Company, the basic wages at the commencement were at the higher level than that of the workmen of M/s. Hindustan Ferodo Ltd. So also at the maximum level. He rejected the contention of the Union that the workmen in thehours more than Hindustan Ferodo workers per month. He rightly did not take into account superannuation contribution as also considerations pertaining to gratuity. But he included the personal pay and medical benefit of 4 per cent which were being paid since 1980.Here again, we find that the appellants have not assisted the Tribunal in any manner by suggesting a rational basis either for fixation of the slabs or for the fixation of dearness allowance on equitable basis. In fact, the Union had provided and furnished to the Tribunal with a formula which would have met the requirements of the reference. But, surprisingly the Tribunal did not even refer to it, nor did it care to consider the same. In our opinion, Mr. Vazes award is no award. In fact, to say the least, it discloses a total lack of perspective and rational approach in the matter. If the same is given effect to, it leads to a wholly perverse situation, if not disastrous to the interests of the workmen. The learned member misunderstood the reference when he thought that the sole object of the reference was to give the same basic wages and other terms and conditions as in the case of M/s. Hindustan Ferodo. That was not the case.It is true that the concerned workmen of the Appellant Company must get an equivalentwhich a similarly situated work men in M/s. Hindustan Ferodo Ltd. would get. What is the meaning of the words "similarly situated workmen" How would onea scale of dearness allowance in comparison to the scale of another concern which is accepted as the criteria applicable to the case. There cannot be a mathematical equation unless in both the concerns the basic wages and all other conditions of service are identical. Therefore, what was expected of Mr. Vaze was rationalisation and fixation of scale of dearness allowance on the basis of a similar scale as found in M/s. Hindustan Ferodo Ltd. In that he had to take into account the span of service of each category of workmen and the slab system, in both the concerns. How would one equate the dearness allowance at the minimum and at the maximum levels, the two extreme points, is the crucial point. Parity as to be achieved within these two limits and in that it should be more or less similar to one another. Mr. Vaze missed this approach altogether.Mr. Menon has demonstrated how this mathematical equation based on the common condition/rider has resulted in such apparent distortions is the wage packets between two employees both getting the same basic wages. It is elementary that workmen drawing the same basic wages should get the same dearness allowance. But if Mr. Vazes formula is accepted, in number of case where the basic wages is the same, the dearness allowance differs. For example in number of cases where the basic wage of the workmen is Rs. 1,155/per month, if Mr. Vazes formula is applied, the totaldiffer, varying to the extent of over Rs. 1,000/per month. For example, in the case of one G.L. Bang, whose basic salary is Rs.he is equated with a person drawing basic wages at Rs. 513/in M/s. Hindustan Ferodo Ltd. and if dearness allowance is calculated at that rate, his total emoluments come to Rs. 2,960.80. But in the case of another employee by name L.N. Daga, his basic wages again is Rs.but he is equated with a person drawing Rs. 160/in M/s. Hindustan Ferodo Ltd. and dearness allowance, if calculated on that rate, his total emoluments come to Rs. 1,778.50. Similarly, in the case of a person by name S. Raman, whose basic wages is Rs.he is equated with a person drawing Rs. 496/in M/s. Hindustan Ferodo Ltd. and the total emoluments of his come to Rs. 2,760.20. But in the case of another employee by name S. Ramalingam, whose basic wages is the same as that of S. Raman, he is equated with the person drawing a sum of Rs. 96/in M/s. Hindustan Ferodo Ltd. and on that basis hiswould come to Rs. 3,367.The Union has, in fact, cited the case of about 36 employees and how in the case of each of them who are drawing the same basic wages would get different dearness allowance if Mr. Vazes scheme is to be applied.14. Since the reference to Mr. Vaze was by virtue of a consent order dated July 29, 1988, we have made it clear to both the parties that it is not possible for them tothe earlier awards. Similarly it is also not open to the parties to contend that M/s. Hindustan Ferodo Ltd. was not a concern comparable to the appellants. In fact, both theand also theand thereafter the learned Single Judge, all had come to the conclusion that in 1976 M/s. Hindustan Ferodo Ltd. was a concern comparable to the appellants. Similarly, the Industrial Tribunal was required tothe scale of dearness allowance and in fixing the pay scale, the Industrial Tribunal was required to ensurethat the totalof the Appellants workmen (consisting of basic pay, D.A. plus production bonus plus all allowances should be more or) less similar to the total(consisting of basic pay + D.A. + Production Bonus + all other allowances) of workmen in the equivalent category of M/s. Hindustan Ferodo Ltd. from time to time. It envisages neither refixation of basic wages, nor did it envisage alteration of any of the service conditions of the workmen of the Appellant Company.When the Tambe Award was before the learned Single Judge, he had only set aside that part of the award which related to fixation of dearness allowance. Otherwise, all other findings recorded in the award passed by M/s. Tambe had been confirmed by the learned Judge and there is no appeal against the same. Thereafter when Mr. Rane accepted the broad approach of Mr. Tambe and fixed the dearness allowance, the learned Single Judge confirmed the said approach and dismissed the writ petition. But, it is significant to note if Mr. Rane could not think of any other solution than confirming theit as done mainly because the Company had failed to assist the Tribunal. That position continues even in the present case, and there has been no assistance from the Company as far as Mr. Vaze was concerned. Though, the appellants had filed a formal objection to Mr. Vazes award the same has not been pressed before us and Mr. Srikrishna has categorically stated that the appellant Company would accept Mr. Vazes recommendation whether it is satisfactory or not. On the other hand, the Union has rightly objected to this award as the same is wholly unsustainable.16. During the course of the hearing before the earlier Bench to which one of us (Suresh, J.) was a party, efforts were made to work out an amicable solution and in that process Mr. menon and Mr. Srikrishna sat together, tried their best to resolve the matter on an agreed formula. In fact, some of those formulas were handed over to the Court and by and large the reaction of the Bench was that the Union was more than charitable in its approach. But the appellant Company was not willing to accept any such solution. The continuance of the dispute was obviously more in the interests of the Company than that of the workmen. During all these fourteen years of litigation, the Company took shelter under various interim orders passed from time to time. They paid the basic wages and half the dearness allowance on anbasis. They could withhold contributions of provident fund and other superannuation benefits on the unpaid dearness allowance. They would not declare production bonus, all on the basic that the matter is pending in the Court. In fact, Mr. Srikrishna submitted that if Mr. Vazes award was not satisfactory, the matter again be remanded back, a submission which we will have no hesitation to reject. It is neither fair nor proper that this litigation should be allowed to continue any further. Mr. Menon points out that during all these years, the total number of workmen has come down from 75 to 20. Today there are 12 peons, one sweeper, 6 clerks and 1 tale operator. Some are dead and some are retrenched. The Companys insistence on not agreeing to any reasonable formula in patently unjust. Despite the fact that the Company had not genuinely assisted any of the Tribunals, in this behalf we are of the opinion that we can ourselves arrive at a reasonableargument is wholly untenable. This would at once exclude all dearness allowance paid by M/s. Hindustan Ferodo Ltd. over and above basic wages of Rs.paid at the end of the eight year for a cashier who has to wait for another fourteen years to get the maximum salary, while in thethat maximum is reached in the eight year itself. To deprive him to his maximum dearness allowance merely because in M/s. Hindustan Ferodo Ltd. at the eight year of service, a Cashier is paid much less, is highly irrational, if not patently unjust. So also in the case of all other categories of workmen. Thus, if Mr. Vazes award is to be accepted, it will materially alter the service conditions of the workmen of thefor which there can be no justification whatsoever.In this connection, it must be appreciated that the respondent Union, in fact, submitted a revised dearness allowance scheme which would retain the slab system and at the same time would make the total pay packet of a workman of thecomparable to the workman of M/s. Hindustan Ferodo Ltd. in equivalent categories as nearest as possible. The Industrial Tribunal unreasonably declined to take that into account. After hearing the advocates on either side and taking into account the merits of the dearness allowance scheme submitted by the Union, we consider that the proposed dearness allowance scheme as submitted by the Union was the most reasonable one and was most satisfactory. The said dearness allowance scheme at C.L.I. 1296 is as follows:"Basic Salary Fixed D.A. Variable D.A. Variable D.A.for every orpoints 10 pointsrise or fall rise or fall upto CLI 3300 aboveCLI 3301Rs. 1 to 100 160% (Plus) 5% (plus) 4% (plus)Rs. 101 to 200 80% (Plus) 2% (plus) 1.5% (plus)Rs. 201 and above 40% 0.75% 0.75%"On the basis of this, the Union prepared a detailed Chart showing the total wages that may be calculated. We have seen the said Chart at pages 242 to 249 in the paper book at Vol. IV. In fact, the said Chart shows that though at the initial stage at CLI 1296 in the case of certain categories of workmen the Company may have to pay a slightly higher amount than M/s. Hindustan Ferodo Ltd. But at later stage as the CLI increases from time to time, the Company pays much less than what M/s. Hindustan Ferodo Ltd. would pay to such workmen. One fails to understand as to why this cannot be accepted by the Company. This has the advantage of not interfering with the span of serviceand also theminimum and maximum payable with regard to basic wages in the case of each category of workmen.22. Thehad submitted that for the purpose of equating the two wages packets, it is necessary to take into account the fact that the workmen of the Appellant company workhours per month more than the number of hours put in by the workmen of M/s. Hindustan Ferodo Ltd. Mr. Vaze rejected this submission on an erroneous ground that both the workmen are paid monthly rated wages and not hourly rates wages. Mr. Vaze ought to have known that there can be no wages packet without any relation to the working hours. In a year, the workmen of theput in approximately 37 more than the number of days/hours put in by the workmen of M/s. Hindustan Ferodo Ltd. For the purpose of comparing the two wage structures, that was a very relevant component which could not have been ignored at all. It is not that such a factor is unknown to such a Tribunal in any fixation of wage structure. If this component is taken into account, on the scheme proposed by the Union as set out above, it is the workmen who suffer greater loss than the management. A look at the chart would clearly show that by and large the workmen would get less than the workmen in M/s. Hindustan Ferodo Ltd. would get throughout. But since the Union is prepared to accept this, we cannot appreciate why the management wants to reject unless their object is to defeat the legitimate claim of theare, therefore, not inclined to attach any importance to this item. Even otherwise, we are of the opinion that even if this item is included in theit would not make any great difference, as far as the totalis concerned, inasmuch as under the proposed scheme the workers get much less than what their counterpart would get in M/s. Hindustan Ferodo Ltd. The personal pay would not eventhe loss they are willing to bear.The third objection relates to the medical reimbursement. In fact this is no allowance, forming part of theof the workmen. It is not an amount uniformly paid as a part of themonth after month. It is a contingent payment. This is only a reimbursement of actual medical expenses incurred during the sickness and the same is paid against the medical certificates, bills etc. but subject to 4 per cent of the basic wages. We cannot understand as to how the Company says that this should be included in the basic wages as such.