Case: Workmen of Jessop and Company Limited Vs. Jessop and Company, Limited, and Others

Wanchoo, J.1. This is an appeal by special leave by the workmen of Jessop Co. Ltd., against the award of the fourth industrial tribunal, West Bengal. There was a dispute between the appellant-workmen and their employer who is respondent 1 in the present appeal about a number of matters, which were referred for adjudication to the tribunal. In the present appeal we are concerned only with some of the matters which were in dispute before the tribunal; and they are these :(1) Grades and scales of pay(2) Dearness allowance for subordinate staff.(3) Overtime allowance.(4) Retiring age.(5) Gratuity scheme.Besides, the appellants also challenge the date from which the award has been ordered to be brought into operation by the tribunal.2. The appellants wanted the existing scales of pay for clerks and subordinate staff to be substantially raised and in this connexion relied upon the scales of pay prevalent in Brooke Bond & Co., Ltd., Western India Match Company, Ltd., Imperial Tobacco Company, Ltd., and Volkart Brothers, Ltd. The tribunal however pointed out that there of these concerns on which the appellants relied were not comparable as they were not engineering concerns like respondent 1. It also pointed out that Volkart Brothers, Ltd., was mainly not an engineering concern, though it had some engineering business. The tribunal therefore mainly relied in this connexion on the award of the third engineering tribunal which dealt with the engineering industry in that part of the country and consequently made certain changes in the scales and grades of pay which were slightly more favourable to the appellants than the existing scales of pay.3. As to dearness allowance for the subordinate staff, the appellants claimed it at the rate of what is known as the Bengal Chamber of Commerce dearness allowance, which is meant for clerical staff at the head office and which the clerical staff in the present case getting. The tribunal however held that the Bengal Chamber of Commerce dearness allowance is not applicable to subordinate staff and following the awards of the three major engineering tribunals made certain changes in the dearness allowance in favour of the appellants, though it refused to grant the scale according to the Bengal Chamber of Commerce dearness allowance.As to overtime, the appellants claimed it at twice the ordinary rate of wages. The existing rate was one and a quarter of the basis rate of pay. The tribunal has allowed one and a half times the basic hourly wage for the workmen at the head office.As to retiring age, it appears that the present retirement age is 55 for clerical staff. The tribunal refused to increase the retirement age beyond 55.As to gratuity, the tribunal was of the opinion that the time was not ripe for providing for gratuity in addition to provident fund which was already existing in the respondent-company.Finally, the tribunal ordered that rates of pay and dearness allowance fixed by it shall be payable from 1 January, 1960. We shall now proceed with the points raised before us one by one.4. Regarding (1) - Grades of pay - It is well-settled that wages including wage - scales are fixed on region-cum-industry basis, and one of the reasons behind this principle is that concerns of more or less the same standing in the same industry should have as nearly as possible same wages so that they might stand on a par with one another in the matter of competition. Otherwise, if disparate rates of wages are fixed in a particular concern, which are much higher than the prevailing rates of wages in concerns of similar standing in the same industry, it will be put at a disadvantage when it comes to compete in the market in the sale of its product. It is for this reason that when scales of pay are being fixed that tribunals look at what are called comparable concerns in framing wage-structure. We are therefore of opinion that the tribunal was right in refusing to treat the four concerns on the wage-structure of which the appellants relied as comparable concerns for fixing the wage-structure in the respondent-company. As we have already pointed out, three of these concerns have nothing to do with engineering industry while the fourth, namely, Volkart Brothers, Ltd., is also not an engineering concern as such, though it has some engineering business. We are further of opinion that the tribunal was right in taking into account for purposes of comparison the scales of pay fixed by the third engineering tribunal in West Bengal, which dealt with the major engineering concerns in that region. In these circumstances we see no reason to differ from the tribunal in the matter of fixation of scales of wages in the respondent-company. As the award shows, these scales have been fixed after properly taking into account the scales fixed by the third engineering tribunal. It may be added that there were three engineering tribunals which fixed scales for the major engineering concerns in the region. The tribunals has taken into account the scales fixed by the three engineering tribunals in fixing the scales in the respondent-company. In these circumstance we see no reason to differ from the decision of the tribunal in the matter of fixation of scales of pay in the respondent-company.5. Regarding (2) - Dearness allowance. - Turning now to the dearness allowance for the subordinate staff, the claim of the appellants was that the subordinate staff should also be paid dearness allowance on the scale of the Bengal Chamber of Commerce dearness allowance. That scale is based on the cost of living index prepared by the periodical Capital for clerical staff and so far as the subordinate staff is concerned, there was a flat rate for it even in that scale. The tribunal was of the view that there was no reason why the Bengal Chamber of Commerce dearness allowance scale which is meant for clerical staff should be introduced in the case of subordinate staff at the head office. The tribunal again relied upon the awards of the three engineering tribunals and found that the first engineering tribunal had fixed the dearness allowance for those drawing wages up to Rs. 50 at Rs. 25. This was gradually increased by the second engineering tribunal and finally was fixed at Rs. 36 by the third engineering tribunal. But the tribunal found that the scale of dearness allowance for the head office staff remained constant at Rs. 42. It therefore ordered that the head office staff should get further sum of Rs. 11 as dearness allowance as that was the amount by which the dearness allowance for the factory staff had been raised during this period. It also held that as in the case of the engineering tribunal, the subordinate staff drawing up to Rs. 100 which was till then treated as one class should be divided into two classes, i.e. those drawing up to Rs. 50 and those drawing wages between Rs. 51 and Rs. 100. It fixed dearness allowance for the first category of staff at Rs. 53 and for the second at Rs. 63, i.e., and Rs. 10 more, which was in accord with the third engineering tribunal. Its final decision was that there was no reason to give the Bengal Chamber of Commerce dearness allowance to the subordinate staff at the head office. It ordered that the subordinate staff at the factory should continue to get the present dearness allowance as fixed in the third engineering award, and as for the subordinate staff at the head office it fixed Rs. 53 for those drawing up to Rs. 50 per mensem and Rs. 63 for those drawing wages between Rs. 51 and Rs. 100 per mensem. The tribunal has in our opinion gone into the question of dearness allowance with care and we see no reason to disagree with the reasons given by it for fixing the dearness allowance as it did. Finally the tribunal ordered that the new dearness allowance should come into force from 1 January 1960. The contention under this head must there fore fail.6. Regarding (3) - Overtime allowance. - Coming now to overtime, the contention of the appellants is that they should have been awarded overtime at the rate of ordinary wages, i.e., basic pay and dearness allowance, while the tribunal has awarded one and a half times the basic rate only. It is, however, usual to give overtime allowance on the basis of ordinary rate of wages which means basic wages plus dearness allowance (see S.59 of the Factories Act, no. 63 of 1948, and S.33 of the Mines Act, No. 35 of 1952). We think that the same system of allowing overtime at one and a half times the ordinary rate of wages, i.e., basic wages plus dearness allowance, should be followed for the head office also to bring it into line with the general pattern of overtime allowance. We therefore accept the contention and allow overtime allowance at one and a half times the ordinary rate of wages, i.e. basic wages plus dearness allowance., for the workmen at the head office.7. Regarding (4) - Retiring age. - The tribunal has rejected the demand for increasing the retirement age from 55 to 65 as claimed by the appellants. The reason given by the tribunal for this decision is that"the wage structure, the retiring benefits and the climate of the place, the prevailing system in other concerns of similar nature, all go to support that the age of retirement should not be increased."8. We feel however that the time has now come for increasing the age of retirement in the case of clerical staff and the subordinate staff. The question was considered by this court in Guest, Keen, Williams (private), Ltd. v. P. J. Sterling and others [1959 - II L.L.J. 405] and the considerations to be taken into account in fixing the date of retirement were there indicated. Bearing those considerations in mind we are of opinion that age of retirement for clerical staff and subordinate staff should be increased as a first step to 58. We do not think the wage-structure, the retiring benefits or the climate of that region is such that the age of retirement must be kept at 55; but taking into account the prevailing system in similar concerns to which the tribunal has referred we think that a beginning should be made to increase the age of retirement for clerical staff and subordinate staff other than those who are workers under the Factories Act to 58. We therefore accept this contention to this extent that the age of retirement for clerical staff and subordinate staff other than those who are workers under the Factories Act shall be raised to 58. This part of the decision will come into force from the date of this judgment.Regarding (5) - Gratuity. - As to gratuity scheme, the tribunal thought that it was not feasible at that stage to introduce a gratuity scheme in this company. We are however told that since then the company has introduced a gratuity scheme. Learned counsel for the appellants wants to urge that some features of the gratuity scheme introduced by the company require revision. That is however a matter which cannot be gone into in the present reference. In the circumstances, as the gratuity scheme has since been introduced. It is unnecessary to go into the matter any further.9. Lastly, we come to the question of the date from which the award should be introduced. The tribunal fixed this date as 1 January, 1960. The appellants claim that the award should have been given effect to at least from the date of reference which was made on 28 October, 1957. This Court generally does not interfere with the orders of the tribunal in the matter of fixing the date from which the award should come into force as that is a question which is mainly within the discretion of the tribunal. It is however urged on behalf of the appellants that there was more than two years delay between the date of reference and the award of the tribunal and that this was due to the action of the respondent-company and therefore the tribunal should have fixed on earlier date from which the award should come into force. We do not think that this is a case where there was any deliberate action on the part of the respondent-company to delay the decision of the reference, though it appears that at one stage the company had moved an application under Art. 226 of the Constitution before the High Court which resulted in the stay of proceedings for about six months. That in our opinion is not sufficient reason for us to differ from the tribunal as to the date from which the award should come into force. In the circumstance this contention must also fail.

Decision reasoning: 1[ds]4. Regarding (1)Grades of payed that wages including wagescales are fixed onbasis, and one of the reasons behind this principle is that concerns of more or less the same standing in the same industry should have as nearly as possible same wages so that they might stand on a par with one another in the matter of competition. Otherwise, if disparate rates of wages are fixed in a particular concern, which are much higher than the prevailing rates of wages in concerns of similar standing in the same industry, it will be put at a disadvantage when it comes to compete in the market in the sale of its product. It is for this reason that when scales of pay are being fixed that tribunals look at what are called comparable concerns in framingWe are therefore of opinion that the tribunal was right in refusing to treat the four concerns on theof which the appellants relied as comparable concerns for fixing theny. As we have already pointed out, three of these concerns have nothing to do with engineering industry while the fourth, namely, Volkart Brothers, Ltd., is also not an engineering concern as such, though it has some engineering business. We are further of opinion that the tribunal was right in taking into account for purposes of comparison the scales of pay fixed by the third engineering tribunal in West Bengal, which dealt with the major engineering concerns in that region. In these circumstances we see no reason to differ from the tribunal in the matter of fixation of scales of wages in theAs the award shows, these scales have been fixed after properly taking into account the scales fixed by the third engineering tribunal. It may be added that there were three engineering tribunals which fixed scales for the major engineering concerns in the region. The tribunals has taken into account the scales fixed by the three engineering tribunals in fixing the scales in theing now to the dearness allowance for the subordinate staff, the claim of the appellants was that the subordinate staff should also be paid dearness allowance on the scale of the Bengal Chamber of Commerce dearness allowance. That scale is based on the cost of living index prepared by the periodical Capital for clerical staff and so far as the subordinate staff is concerned, there was a flat rate for it even in that scale. The tribunal was of the view that there was no reason why the Bengal Chamber of Commerce dearness allowance scale which is meant for clerical staff should be introduced in the case of subordinate staff at the head office. The tribunal again relied upon the awards of the three engineering tribunals and found that the first engineering tribunal had fixed the dearness allowance for those drawing wages up to Rs. 50 at Rs. 25. This was gradually increased by the second engineering tribunal and finally was fixed at Rs. 36 by the third engineering tribunal. But the tribunal found that the scale of dearness allowance for the head office staff remained constant at Rs. 42. It therefore ordered that the head office staff should get further sum of Rs. 11 as dearness allowance as that was the amount by which the dearness allowance for the factory staff had been raised during this period. It also held that as in the case of the engineering tribunal, the subordinate staff drawing up to Rs. 100 which was till then treated as one class should be divided into two classes, i.e. those drawing up to Rs. 50 and those drawing wages between Rs. 51 and Rs. 100. It fixed dearness allowance for the first category of staff at Rs. 53 and for the second at Rs. 63, i.e., and Rs. 10 more, which was in accord with the third engineering tribunal. Its final decision was that there was no reason to give the Bengal Chamber of Commerce dearness allowance to the subordinate staff at the head office. It ordered that the subordinate staff at the factory should continue to get the present dearness allowance as fixed in the third engineering award, and as for the subordinate staff at the head office it fixed Rs. 53 for those drawing up to Rs. 50 per mensem and Rs. 63 for those drawing wages between Rs. 51 and Rs. 100 per mensem. The tribunal has in our opinion gone into the question of dearness allowance with care and we see no reason to disagree with the reasons given by it for fixing the dearness allowance as it did. Finally the tribunal ordered that the new dearness allowance should come into force from 1 January 1960. The contention under this head must there fore fail.6. Regarding (3)ng now to overtime, the contention of the appellants is that they should have been awarded overtime at the rate of ordinary wages, i.e., basic pay and dearness allowance, while the tribunal has awarded one and a half times the basic rate only. It is, however, usual to give overtime allowance on the basis of ordinary rate of wages which means basic wages plus dearness allowance (see S.59 of the Factories Act, no. 63 of 1948, and S.33 of the Mines Act, No. 35 of 1952). We think that the same system of allowing overtime at one and a half times the ordinary rate of wages, i.e., basic wages plus dearness allowance, should be followed for the head office also to bring it into line with the general pattern of overtime allowance. We therefore accept the contention and allow overtime allowance at one and a half times the ordinary rate of wages, i.e. basic wages plus dearness allowance., for the workmen at the head office.We feel however that the time has now come for increasing the age of retirement in the case of clerical staff and the subordinate staff. The question was considered by this court in Guest, Keen, Williams (private), Ltd. v. P. J. Sterling and others [1959II L.L.J. 405] and the considerations to be taken into account in fixing the date of retirement were there indicated. Bearing those considerations in mind we are of opinion that age of retirement for clerical staff and subordinate staff should be increased as a first step to 58. We do not think thethe retiring benefits or the climate of that region is such that the age of retirement must be kept at 55; but taking into account the prevailing system in similar concerns to which the tribunal has referred we think that a beginning should be made to increase the age of retirement for clerical staff and subordinate staff other than those who are workers under the Factories Act to 58. We therefore accept this contention to this extent that the age of retirement for clerical staff and subordinate staff other than those who are workers under the Factories Act shall be raised to 58. This part of the decision will come into force from the date of this judgment.Regarding (5)As to gratuity scheme, the tribunal thought that it was not feasible at that stage to introduce a gratuity scheme in this company. We are however told that since then the company has introduced a gratuity scheme.Learned counsel for the appellants wants to urge that some features of the gratuity scheme introduced by the company require revision.That is however a matter which cannot be gone into in the present reference. In the circumstances, as the gratuity scheme has since been introduced. It is unnecessary to go into the matter any further.9. Lastly, we come to the question of the date from which the award should be introduced. The tribunal fixed this date as 1 January, 1960. The appellants claim that the award should have been given effect to at least from the date of reference which was made on 28 October, 1957. This Court generally does not interfere with the orders of the tribunal in the matter of fixing the date from which the award should come into force as that is a question which is mainly within the discretion of the tribunal. It is however urged on behalf of the appellants that there was more than two years delay between the date of reference and the award of the tribunal and that this was due to the action of theand therefore the tribunal should have fixed on earlier date from which the award should come into force. We do not think that this is a case where there was any deliberate action on the part of theto delay the decision of the reference, though it appears that at one stage the company had moved an application under Art. 226 of the Constitution before the High Court which resulted in the stay of proceedings for about six months. That in our opinion is not sufficient reason for us to differ from the tribunal as to the date from which the award should come into force. In the circumstance this contention must also fail.