Case: Workmen of New Egerton Woollen Mills Vs. New Egerton Woollen Mills and Others

wage-scales in such a manner as to equalize with those of the Orient Carpet Manufacturers. It was also urged on their behalf that the increments awarded by the tribunal were not adequate and lastly that the award should have been brought into force from the date of the demand or at least from the date of the award. There is, in our view, considerable justification for the workmens first contention. Taking the dearness allowance payable by the two companies as on 1 November 1963, the date when the award was directed by the tribunal to come into force, the wage-scales as awarded by the tribunal fell short of those existing in the Orient Carpet Manufacturers on that day. A comparison of the two wage-scales clearly brings out the disparity between the two of them. Whereas in the Orient Carpet Manufacturers the maximum which an unskilled workman was entitled to get was Rs. 118.50, the maximum which an unskilled workman under the award can get is Rs. 88 only. Similarly, the maximum which all the other categories of workmen in Orient Carpet Manufacturers were entitled to are higher than those awarded by the tribunal. A glance at the minimum consolidated wages fixed by the Punjab Government by their said notification also shows that the wage-scales awarded by the tribunal are hardly better than those prescribed under the said notification. Since the tribunal accepted the Orient Carpet Manufacturers as the only comparable unit in the region it could not with any reason fix wage-scales at levels lower or less favourable than those existing in that company. There is, therefore, force in the workmens complaint that the revision made by the tribunal was neither fair nor adequate. Since there is no question of the company not having the requisite financial capacity, we propose to modify the wage-scles awarded by the tribunal so as at least to bring them in line with those in the Orient Carpet Manufacturers, on 1 November 1963. The scales of basis wages so modified by us would have to be follows :(1) Unskilled ... Rs. 30-2-60(2) Semiskilled (lower) ... Rs. 40-2-60-3-75(3) Semiskilled (higher) ... Rs. 45-2-65-4-105(4) Skilled (lower) ... Rs. 50-3-80-5-130(5) Skilled (higher) ... Rs. 70-7-120-6-180(6) Highly skilled ... Rs. 100-6-130-7-235There is no occasion for revising the rates of dearness allowance as dearness allowance is already linked with the index of cost of living and the tribunal has awarded Re. 1 for every rise or fall or two points in the said index as from 1 November 1963. The result of our modifying the wage-scales is that the workmen will be entitled to the following wage-scales including the dearness allowance :WAGES INCLUSIVE OF DEARNESS ALLOWANCESerial Class of Starting 10 years 15 years 20 years Number. workmen Rs. Rs. Rs. Rs.1. Unskilled (lower) ... 78.00 110.50 121.50 ...2. Semiskilled ... 88.00 121.50 136.50 ... (higher)3. Semiskilled ... 93.00 126.50 ... 173.50 (lower)4. Skilled ... 111.50 141.50 ... 198.50 (higher)5. Skilled ... 131.50 188.50 ... 248.50 (lower)6. Highly skilled ... 168.50 233.50 ... 329.00 (higher)8. We have not made any change in the scale fixed by the tribunal for the semiskilled (lower) at it practically corresponds with that in the Orient Carpet Manufacturers. Similarly, no change is made in the scale for the highly skilled for the same reason except that as in the Orient Carpet Manufacturers, we have increased the increment span of 5 years so as to make it correspond with that in the Orient Carpet Manufactures. A modification in the adjustments in the revised scales made by the tribunal is also, in our view, necessary. Equating a workman who has put in six years of service with another workman who has put in 10 or 15 years of service does not appear to be either fair or just particularly as the wage-scales prevailing in the company have been for the last several years low. The principle followed in making such adjustments is that generally they should be granted when wage-scales are fixed for the first time. But that does not mean that where they are previously in existence such adjustments cannot be granted even though the scale have been low for a number of years. In such a case justice requires that adjustments should be made even a second time. In view of the finding by the tribunal that there has been no revision in the wage-scales since 1955 and wage-scales have all along been fairly low we think the adjustments granted by the tribunal should be liberalized. We direct therefore, that while fitting the workmen in the wage-scales modified by us as above, one increment should be given to those workmen who have put in three years continuous service, two increments should be given to those who have put in six years continuous service and three increments should be given to those who have put in continuous service for ten years or more. Those who have reached the maximum or more than the maximum would not be entitled to any increment.As regards the date on which the award should come into force, industrial tribunals have treated the date of demand and the date of the award as two extreme points. The tribunals, however, have discretion to fix any intermediate date depending upon the circumstances of each case. As has been said more than once, this Court would be reluctant to interfere with the date fixed by the tribunal if it has been done in the proper exercise of its discretion. In the present case the tribunal felt that in fairness to both the parties the intermediate date, namely, 1 November 1963, when it passed its interim award was the proper date from which the award should come into operation. The ground for selecting this date was that according to the tribunal the prices of commodities began to rise steeply in this region from that date. That ground has not been controverted by any material to the contrary. Their can, therefore, barely be any ground for our interference.9.

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

Explanation:
1[ds]A number of decisions both of this Court as also of industrial tribunals have laid down that two principal factors which must weigh while fixing or revising wage-scales and grades are : how the wages prevailing in the establishment in question compare with those given to workmen of similar grade and scale by similar establishments in the same industry or in their absence in similar establishments in other industries in the region and what wage-scales the establishment in question can pay without any undue strain on its financiallatter question does not arise in the present case as the financial capacity of the company has, for the reasons afore-stated, not been disputed. In consideration the first question, the tribunal has first to ascertain whether there are comparable concerns in the same industry in the region. In doing so, it has to take into account the extent of business, the capital invested, the profits, the nature of business, the standing, the strength of labour force, the reserves, if any, the dividends paid, the future prospects of the business of concerns put forward before it as comparable and other relevant facts. Obviously, there can be no comparison between a small struggling unit and a large flourishing concern of long standing. Where there are no such comparable concerns in the same industry in the region the tribunal can look to concerns in other industries in the region for comparison but in that case such concerns should be as similar as possible and not disproportionately large or absolutelyseen earlier, though there are a large number of units in the same industry in Amritsar region there was none, which in size, resources or labour force, could properly compare with the respondent-company and the nearest which could be said to compare with it was the Orient Carpet Manufactures which at the material time had a labour force of about 1, 000 men as compared with about 3, 000 men employed in the respondent-company. The workmen in these circumstances contended and the tribunal accepted that the Orient Carpet Manufactures should be taken as a Comparable Concerns. Unfortunately, although it was found that there was no truly comparable concern in the same industry in the region no attempt was made to find out whether there were comparable concerns in the other industries in the region. The result was that the tribunal could fall back upon the Orient Carpet Manufactures only which the workmen had claimed to be the only comparableundoubtedly is correct. But that can hardly be the ground for the Orient Carpet Manufactures not being considered as a comparable concern. The reason is that the tribunal fixed the revised wage-scales on the basis of dearness allowance payable by the respondent-company on 1 November 1963 after taking into account the consolidated wage-scales payable by the Orient Carpent Manufacturers which included dearness allowance payable on that date. It is true that the dearness allowing being variable in the respondent-company the amounts of dearness allowance payable by the respondent-company would vary depending upon the rise or fall in the index of cost of living. But that difference alone would not preclude the Orient Carpent Manufactures being accepted as a comparable concern in view of the respondent-company being very much larger in every sense than the Orient Carpet Manufacturers. The contention urged on behalf of the company, therefor, cannot benumber of decisions both of this Court as also of industrial tribunals have laid down that two principal factors which must weigh while fixing or revising wage-scales and grades are : how the wages prevailing in the establishment in question compare with those given to workmen of similar grade and scale by similar establishments in the same industry or in their absence in similar establishments in other industries in the region and what wage-scales the establishment in question can pay without any undue strain on its financialer question does not arise in the present case as the financial capacity of the company has, for the reasons afore-stated, not been disputed. In consideration the first question, the tribunal has first to ascertain whether there are comparable concerns in the same industry in the region. In doing so, it has to take into account the extent of business, the capital invested, the profits, the nature of business, the standing, the strength of labour force, the reserves, if any, the dividends paid, the future prospects of the business of concerns put forward before it as comparable and other relevant facts. Obviously, there can be no comparison between a small struggling unit and a large flourishing concern of long standing. Where there are no such comparable concerns in the same industry in the region the tribunal can look to concerns in other industries in the region for comparison but in that case such concerns should be as similar as possible and not disproportionately large or absolutelydissimilar - of. French Motor Car Company, Ltd. v. Their workmen [1962 - I L.L.J. 744]; Williamsons (India) (Private), Ltd, v. Its workmen [1962 - I L.L.J. 302]; Novex Dry Cleaners v. Its workmen [1962 - I L.L.J. 271] and Kamani Metals and Alloys, Ltd. v. Their workmen [1967 - II L.L.J. 55].Asseen earlier, though there are a large number of units in the same industry in Amritsar region there was none, which in size, resources or labour force, could properly compare with the respondent-company and the nearest which could be said to compare with it was the Orient Carpet Manufactures which at the material time had a labour force of about 1, 000 men as compared with about 3, 000 men employed in the respondent-company. The workmen in these circumstances contended and the tribunal accepted that the Orient Carpet Manufactures should be taken as a Comparable Concerns. Unfortunately, although it was found that there was no truly comparable concern in the same industry in the region no attempt was made to find out whether there were comparable concerns in the other industries in the region. The result was that the tribunal could fall back upon the Orient Carpet Manufactures only which the workmen had claimed to be the only comparabley is correct. But that can hardly be the ground for the Orient Carpet Manufactures not being considered as a comparable concern. The reason is that the tribunal fixed the revised wage-scales on the basis of dearness allowance payable by the respondent-company on 1 November 1963 after taking into account the consolidated wage-scales payable by the Orient Carpent Manufacturers which included dearness allowance payable on that date. It is true that the dearness allowing being variable in the respondent-company the amounts of dearness allowance payable by the respondent-company would vary depending upon the rise or fall in the index of cost of living. But that difference alone would not preclude the Orient Carpent Manufactures being accepted as a comparable concern in view of the respondent-company being very much larger in every sense than the Orient Carpet Manufacturers. The contention urged on behalf of the company, therefor, cannot beis, in our view, considerable justification for the workmens first contention. Taking the dearness allowance payable by the two companies as on 1 November 1963, the date when the award was directed by the tribunal to come into force, the wage-scales as awarded by the tribunal fell short of those existing in the Orient Carpet Manufacturers on that day. A comparison of the two wage-scales clearly brings out the disparity between the two of them. Whereas in the Orient Carpet Manufacturers the maximum which an unskilled workman was entitled to get was Rs. 118.50, the maximum which an unskilled workman under the award can get is Rs. 88 only. Similarly, the maximum which all the other categories of workmen in Orient Carpet Manufacturers were entitled to are higher than those awarded by the tribunal. A glance at the minimum consolidated wages fixed by the Punjab Government by their said notification also shows that the wage-scales awarded by the tribunal are hardly better than those prescribed under the said notification. Since the tribunal accepted the Orient Carpet Manufacturers as the only comparable unit in the region it could not with any reason fix wage-scales at levels lower or less favourable than those existing in that company. There is, therefore, force in the workmens complaint that the revision made by the tribunal was neither fair nor adequate. Since there is no question of the company not having the requisite financial capacity, we propose to modify the wage-scles awarded by the tribunal so as at least to bring them in line with those in the Orient Carpet Manufacturers, on 1 November 1963. The scales of basis wages so modified by us would have to be followsUnskilled ... Rs. 30-2-60(2) Semiskilled (lower) ... Rs. 40-2-60-3-75(3) Semiskilled (higher) ... Rs. 45-2-65-4-105(4) Skilled (lower) ... Rs. 50-3-80-5-130(5) Skilled (higher) ... Rs. 70-7-120-6-180(6) Highly skilled ... Rs.is no occasion for revising the rates of dearness allowance as dearness allowance is already linked with the index of cost of living and the tribunal has awarded Re. 1 for every rise or fall or two points in the said index as from 1 November 1963. The result of our modifying the wage-scales is that the workmen will be entitled to the following wage-scales including the dearness allowanceINCLUSIVE OF DEARNESS ALLOWANCESerial Class of Starting 10 years 15 years 20 years Number. workmen Rs. Rs. Rs. Rs.1. Unskilled (lower) ... 78.00 110.50 121.50 ...2. Semiskilled ... 88.00 121.50 136.50 ... (higher)3. Semiskilled ... 93.00 126.50 ... 173.50 (lower)4. Skilled ... 111.50 141.50 ... 198.50 (higher)5. Skilled ... 131.50 188.50 ... 248.50 (lower)6. Highly skilled ... 168.50 233.50 ... 329.00have not made any change in the scale fixed by the tribunal for the semiskilled (lower) at it practically corresponds with that in the Orient Carpet Manufacturers. Similarly, no change is made in the scale for the highly skilled for the same reason except that as in the Orient Carpet Manufacturers, we have increased the increment span of 5 years so as to make it correspond with that in the Orient Carpet Manufactures. A modification in the adjustments in the revised scales made by the tribunal is also, in our view, necessary. Equating a workman who has put in six years of service with another workman who has put in 10 or 15 years of service does not appear to be either fair or just particularly as the wage-scales prevailing in the company have been for the last several years low. The principle followed in making such adjustments is that generally they should be granted when wage-scales are fixed for the first time. But that does not mean that where they are previously in existence such adjustments cannot be granted even though the scale have been low for a number of years. In such a case justice requires that adjustments should be made even a second time. In view of the finding by the tribunal that there has been no revision in the wage-scales since 1955 and wage-scales have all along been fairly low we think the adjustments granted by the tribunal should be liberalized. We direct therefore, that while fitting the workmen in the wage-scales modified by us as above, one increment should be given to those workmen who have put in three years continuous service, two increments should be given to those who have put in six years continuous service and three increments should be given to those who have put in continuous service for ten years or more. Those who have reached the maximum or more than the maximum would not be entitled to any increment.As regards the date on which the award should come into force, industrial tribunals have treated the date of demand and the date of the award as two extreme points. The tribunals, however, have discretion to fix any intermediate date depending upon the circumstances of each case. As has been said more than once, this Court would be reluctant to interfere with the date fixed by the tribunal if it has been done in the proper exercise of its discretion. In the present case the tribunal felt that in fairness to both the parties the intermediate date, namely, 1 November 1963, when it passed its interim award was the proper date from which the award should come into operation., in our view, considerable justification for the workmens first contention. Taking the dearness allowance payable by the two companies as on 1 November 1963, the date when the award was directed by the tribunal to come into force, the wage-scales as awarded by the tribunal fell short of those existing in the Orient Carpet Manufacturers on that day. A comparison of the two wage-scales clearly brings out the disparity between the two of them. Whereas in the Orient Carpet Manufacturers the maximum which an unskilled workman was entitled to get was Rs. 118.50, the maximum which an unskilled workman under the award can get is Rs. 88 only. Similarly, the maximum which all the other categories of workmen in Orient Carpet Manufacturers were entitled to are higher than those awarded by the tribunal. A glance at the minimum consolidated wages fixed by the Punjab Government by their said notification also shows that the wage-scales awarded by the tribunal are hardly better than those prescribed under the said notification. Since the tribunal accepted the Orient Carpet Manufacturers as the only comparable unit in the region it could not with any reason fix wage-scales at levels lower or less favourable than those existing in that company. There is, therefore, force in the workmens complaint that the revision made by the tribunal was neither fair nor adequate. Since there is no question of the company not having the requisite financial capacity, we propose to modify the wage-scles awarded by the tribunal so as at least to bring them in line with those in the Orient Carpet Manufacturers, on 1 November 1963. The scales of basis wages so modified by us would have to be followsd ... Rs. 30-2-60(2) Semiskilled (lower) ... Rs. 40-2-60-3-75(3) Semiskilled (higher) ... Rs. 45-2-65-4-105(4) Skilled (lower) ... Rs. 50-3-80-5-130(5) Skilled (higher) ... Rs. 70-7-120-6-180(6) Highly skilled ... Rs.is no occasion for revising the rates of dearness allowance as dearness allowance is already linked with the index of cost of living and the tribunal has awarded Re. 1 for every rise or fall or two points in the said index as from 1 November 1963. The result of our modifying the wage-scales is that the workmen will be entitled to the following wage-scales including the dearness allowanceE OF DEARNESS ALLOWANCESerial Class of Starting 10 years 15 years 20 years Number. workmen Rs. Rs. Rs. Rs.1. Unskilled (lower) ... 78.00 110.50 121.50 ...2. Semiskilled ... 88.00 121.50 136.50 ... (higher)3. Semiskilled ... 93.00 126.50 ... 173.50 (lower)4. Skilled ... 111.50 141.50 ... 198.50 (higher)5. Skilled ... 131.50 188.50 ... 248.50 (lower)6. Highly skilled ... 168.50 233.50 ... 329.00e not made any change in the scale fixed by the tribunal for the semiskilled (lower) at it practically corresponds with that in the Orient Carpet Manufacturers. Similarly, no change is made in the scale for the highly skilled for the same reason except that as in the Orient Carpet Manufacturers, we have increased the increment span of 5 years so as to make it correspond with that in the Orient Carpet Manufactures. A modification in the adjustments in the revised scales made by the tribunal is also, in our view, necessary. Equating a workman who has put in six years of service with another workman who has put in 10 or 15 years of service does not appear to be either fair or just particularly as the wage-scales prevailing in the company have been for the last several years low. The principle followed in making such adjustments is that generally they should be granted when wage-scales are fixed for the first time. But that does not mean that where they are previously in existence such adjustments cannot be granted even though the scale have been low for a number of years. In such a case justice requires that adjustments should be made even a second time. In view of the finding by the tribunal that there has been no revision in the wage-scales since 1955 and wage-scales have all along been fairly low we think the adjustments granted by the tribunal should be liberalized. We direct therefore, that while fitting the workmen in the wage-scales modified by us as above, one increment should be given to those workmen who have put in three years continuous service, two increments should be given to those who have put in six years continuous service and three increments should be given to those who have put in continuous service for ten years or more. Those who have reached the maximum or more than the maximum would not be entitled to any increment.As regards the date on which the award should come into force, industrial tribunals have treated the date of demand and the date of the award as two extreme points. The tribunals, however, have discretion to fix any intermediate date depending upon the circumstances of each case. As has been said more than once, this Court would be reluctant to interfere with the date fixed by the tribunal if it has been done in the proper exercise of its discretion. In the present case the tribunal felt that in fairness to both the parties the intermediate date, namely, 1 November 1963, when it passed its interim award was the proper date from which the award should come into operation.