Case: Workmen Of Orient Paper Mills Ltd.Brajrajnagar Vs. M/S. Orient Paper Mills Ltd

of The Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka v. Its Workmen, 1959 SCR 925 = (AIR 1959 SC 967 ). The Company is paying profit bonus equivalent to three months basic wage of each workman. The demand made by the workmen was for bonus equivalent to six months wages, and the argument was that, if the Tribunal had worked out the surplus available on the correct basis, that surplus would have certainly justified grant of profit bonus @ six months wages.14. This argument fails, because it appears to us that the demand, as put forward before the Tribunal for bonus equivalent to six months wages, was, in fact, never made by the workmen on the basis that the surplus calculated under the Full Bench Formula would justify bonus being granted at that rate. The Tribunal, in this connection, has quoted the pleading of the workmen in their written statement before it. The pleading makes it clear that the claim or six months wages was not based on the Full Bench Formula, but on the ground that certain clerical staff was being paid bonus which, in effect, amounted to about six months basic wages because the bonus was calculated in their case by taking into account the consolidated wages, including dearness allowance, while in the case of the workmen, the dearness allowance element of the wages was being ignored and bonus was calculated only by taking into account basic wages. We agree with this interpretation of the pleadings of the workmen. Further, there is one very significant circumstance, viz., that this dispute was raised by the workmen before the expiry of the year 1962-68. Initially, there was an attempt that the dispute be referred to the Industrial Tribunal underSection10 (2) of the Act on the basis of an agreed enumeration of subjects of dispute drawn up by the workmen and the Company together. That reference underSection10 (2) of the Act, however failed due to some technical defect. The reference was ultimately made by the Government underSection10 (1) of the Act, but it was made in the same form in which the parties had agreed to refer it. The reference was made by the Government on the 4th October 1962. At that time, the year 1962-68 was still running and the accounts for that year could not possibly have been closed and made available. The balance-sheet and the profit and loss account of that year could only be prepared after the closure of the year on 31st March, 1963. In fact, the reference included a dispute even for the year 1963-64 which year had not even started running.On the face of it, at the time of the reference there could be no question of applying the Full Bench Formula for calculation of surplus, because there were no completed accounts for the two years 1962-63 and 1963-64. This circumstance makes it clear that the claim for higher bonus Could not, at the time of reference, have been based on the availability of surplus according to the Full Bench Formula.The Tribunal was, therefore, quite correct in not trying to work out the surplus according to the Full Bench Formula and in awarding bonus on that basis. In this connection, learned Counsel for the workmen urged that, at least by the time when the Award was give the completed accounts for the year 1962-63 were available; but it seems to us that this circumstance is of no assistance The award had to cover the year 1963-64 also and at least for that year the accounts could not possibly have been completed, as that year was still running when the award was given by the Tribunal on the 11th January, 1964.Further, the Tribunal was expected to decide the dispute only as referred to it and, at the time of reference at least, there was not and there could possibly not be a claim for higher bonus on the basis of the application of the Full Bench Formula.15. The claim was, in fact, based on the circumstance that, according to the workmen, the bonus in their case was being calculated as equivalent to three months basic wages, while, in the case of some clerical staff, the calculation was made on the basis of their consolidated wages consisting of basic wages and dearness allowance. The argument is incorrect. In the case of even the lowest paid clerical staff, to whom dearness allowance is separately payable, the bonus is only calculated on the basis of basic wages, and the dearness allowance is ignored. There is some clerical staff which does not get any dearness allowance at all and it is only in those cases that the bonus is worked out on the basis of the total wages paid. In such cases, the calculation is still on the basis of basic wage, because it cannot be assumed that their wage is a consolidated wage consisting of the two elements of basic wage and dearness allowance lumped together. In fact, the principle which is being applied is the simple one of calculating the bonus payable @ three months basic wage in each case and in no case is the dearness allowance taken into account. There is, therefore, no discrimination or inequality as urged on behalf of the workmen.16. Finally, it was urged that even the casual and Badli workers should be allowed bonus on the same basis as the permanent workers. The Tribunal rejected this demand on the ground that, under the Agreement of 1959, the workmen and the Company had agreed specifically to exclude these classes of workers in regard to payment of bonus. We are unable to hold that the Tribunal committed any error of law, requiring interference by us, in basing its decision on the principle contained in the earlier Agreement of the parties and in holding that there was no justification to introduce a new element of payment of bonus to casual and Badli workers at this stage. The claim in this respect also fails.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In the light of these views which were brought to the notice of the Tribunal, the Tribunal proceeded to consider the minimum wages paid by three Collieries, Orient Colliery, the Colliery and Himgiri-Rampur Colliery, the Rourkela Steel Plant, the Cement Factory at Rajgangpur and the Indian Aluminium Company, Hirakud which the Tribunal found were situated not very far away from the place where the Company had its factory. The Tribunal mentioned that, according to the Coal Award, the minimum wage in the Collieries at the then existing Price Index was Rs. 93-7-0; in the Cement Factory Rs. 96.88; in the Steel Plant Rs. 95/- and in the Aluminum Company Rs. 97.84 nP. The Tribunal then also took into, account the minimum wages being paid by other Paper Mills situated outside the region and thereafter recorded its ownthe basis of this finding of fact, the Tribunal held that, if the minimum wage in the Company is to be fixed more on the basis of the minimum wage prevailing in other industries in that region which. in its opinion, would be appropriate under the circumstances of the case, then a revision was really necessary. We think that the criticism of learned counsel for the workmen that the Tribunal committed an error at this stage in merely, holding that the facts found by it justified a revision and in not proceeding to fix minimum wages on the basis of the other industries in the region, is fully justified. It is to be noted that there is no mention in the award of the Tribunal that the Company at any stage put forward the case that the Collieries, the Steel Plant, the Cement Factory, and the Aluminium Company were concerns which were not comparable with the Company. In fact, in the course of arguments before us, we asked learned Counsel for the Company to point out whether such a plea was taken at any stage by the Company and whether evidence was led to show that these concerns were not comparable with the Company, Learned Counsel had to admit that no specific plea was taken by the Company in this behalf and at least no evidence at all was led to show that these concerns are not comparable with the Company. The workmen in their written statement had relied on the wage structure in these concerns obviously on the basis that they were comparable, Since the Company never took the plea that they were not comparable, no occasion arose for the workmen to give evidence of the concerns being comparable. In fact, the Tribunal also accepted them as being comparable and that is why, in its conclusion, the Tribunal held that, in its opinion, it would be appropriate under the circumstances of the case to fix the minimum wage in the Company on the basis of the minimum wage prevailing in other industries in that region. By the expression "other industries in the region" the Tribunal was obviously referring to these concerns. Having come to this view it is clear that, to give full effect to the principle laid down by this Court in the case of French Motor Car Co. (1963) Supp 2 SCR 16 = (AIR 1963 SC 1327  ) (supra), the Tribunal should have proceeded to fix the minimum wage in the Company on the basis of the average minimum wage prevailing in these concerns. We have already quoted the figures of the minimum wage prevailing in these concerns.On their basis, it appears to us that there will be full justification for fixing the minimum wage in the Company at Rs. 95/- per mensem which is about the average of the wages prevailing in all those concerns. In this connection, we may take notice of the fact that, in the written statement of the workmen, the minimum wages prevailing in these concerns were shown at figures lower than those mentioned by the Tribunal; but it appears that those lower figures were given, because the wages mentioned in the written statement were based on a lower Price Index. The Tribunal considered the minimum wages in these concerns on the basis of the prevailing Price Index of 441 at Sambalpur taking 100 as the basic Price Index for the year 1939 Even when fixing the minimum wage for the Company on the basis of the alternative calculation made by the Tribunal, the Tribunal has proceeded on the assumption that the minimum wage is being fixed for the Price Index No. 441 prevailing at the time of the award taking 100 as the basic index for the year 1939. In these circumstances, we think that the minimum wage in the Company should have been fixed by the Tribunal at Rs. 95/- per mensem, following the principle laid down by this Court in the case of French Motor Car Co. (1963) Supp 2 SCR 16 = (AIR 1963 SC 1327  ), (supra). The Tribunal should not have proceeded to make the alternative calculation on some other basis so as to arrive at a lower figure of Rs. 73/- p. m. as the wage covering the basic wage and the dearness allowance, in addition to Rs. 11/- p. m. payable as production bonus.5. Learned counsel for the Company urged before us that the principle of fix action of wages on the basis of comparison in the region laid down in the French Motor Car Co.s case, (1963) Supp 2 SCR 16 = (AIR 1963 SC 1327  ) (supra) is not rigid, and it is not necessary that the minimum wage in the Company must be fixed at the average level of wages in the other comparable industries in the region. According to him note should be taken of the fact that, at least in the paper industry in this area, the other concerns are paying much lower wages. This point has to be rejected straightway in view of the finding that those concerns are very small and not comparable with the Company. It was also urged that, in fixing the minimum wage, the wages payable in the paper industry in other parts of the country should also be kept view. We do not think that such a consideration should be taken into account when applying the principle of fixing the minimum wage primarily on the basis of comparison between different industries in the same region.Finally, it was argued that other amenities being provided by the Company should also be taken into account when fixing the minimum wage. In this case, however, there is nothing to show that the Company is providing any such amenities which are different from the amenities that are being provided by those concerns in the region which are being compared with the Company for the purpose of fixation of the minimum wage. Consequently, we do not think that there is any justification for departing from the figure of Rs. 95/- which is the average minimum wage payable by those industries.The claim was, in fact, based on the circumstance that, according to the workmen, the bonus in their case was being calculated as equivalent to three months basic wages, while, in the case of some clerical staff, the calculation was made on the basis of their consolidated wages consisting of basic wages and dearness allowance. The argument is incorrect. In the case of even the lowest paid clerical staff, to whom dearness allowance is separately payable, the bonus is only calculated on the basis of basic wages, and the dearness allowance is ignored. There is some clerical staff which does not get any dearness allowance at all and it is only in those cases that the bonus is worked out on the basis of the total wages paid. In such cases, the calculation is still on the basis of basic wage, because it cannot be assumed that their wage is a consolidated wage consisting of the two elements of basic wage and dearness allowance lumped together. In fact, the principle which is being applied is the simple one of calculating the bonus payable @ three months basic wage in each case and in no case is the dearness allowance taken into account. There is, therefore, no discrimination or inequality as urged on behalf of the workmen.16. Finally, it was urged that even the casual and Badli workers should be allowed bonus on the same basis as the permanent workers. The Tribunal rejected this demand on the ground that, under the Agreement of 1959, the workmen and the Company had agreed specifically to exclude these classes of workers in regard to payment of bonus. We are unable to hold that the Tribunal committed any error of law, requiring interference by us, in basing its decision on the principle contained in the earlier Agreement of the parties and in holding that there was no justification to introduce a new element of payment of bonus to casual and Badli workers at this stage. The claim in this respect also fails.