Case: Tata Chemicals Ltd Vs. Its Workmen

a highly integrated chemical complex based on the solar evaporation of sea water in India is the largest solar salt producing concern in the country. The statistics also show that production of soda ash in diverse forms by the appellant Company for the relevant years is considerably higher than the combined production of soda ash of Dharangadhra Chemicals and Saurashtra Chemicals-the two other concerns in the Saurashtra region. The statistics also establish that there is no other heavy Chemicals Concern in the region which can be favorably compared to the appellant Company in so far as the nature, and extent of business, capital outlay, percentage of gross and net profits, strength of labour force, reserves, dividends on Equity Share prospects of future business are concerned. As in Chart (Exh. 13(26) show s that the percentage of wages in the appellant Company is the lowest amongst the seven companies listed therein. Considering all the relevant factors which are to be born in mind in fixing the Dearness Allowance, it is evident that the appellant Company holds a unique position in heavy chemicals in the region. It is in these circumstances that the Industrial Tribunal was constrained to turn to similar industries in Gujarat and found in the light of the aforesaid guiding factors that Sarabhai Chemicals, Baroda was the nearest similar industry which could legitimately serve as a comparable concern. The statistics also establish that besides Sarabhai Chemicals, Baroda, Anil Starch, Ahmedabad, Alembic Chemicals Works, Baroda, Attul Products, Bulsar and Ahmadabad Manufacturing and Calico Printing Co. Ltd. which are included in the list of heavy chemical factories covered by the Wage Board were paying 100% of Textile Dearness Allowance to it s workmen. It is also evident from Exhibit 23 that the total pay packet paid to Mithapur , workers was much less as compared to the total pay packet of the workers in other chemical and pharmaceutical companies alluded to in Exhibit 23 . The material on the-record also makes it abundantly clear that the appellant Company has been making huge profits over the years and its financial position is so stable that it could not only give Variable Dearness Allowance on the basis of what was being paid to the workmen in the Textile Industry but could pay even higher allowance as was being paid to its workmen in the Head Office at Bombay. The Tribunal was, therefore, justified in linking the Dearness-Allowance in , question to t he Textile Dearness Allowance paid to the industrial workers at Ahmedabad which is based on the Report of Family Living Survey among industrial Workers at Ahmedabad, 1958-59, complied as a result of the joint investigation carried on in a rational and scientific manner by several institutions viz. Labour Bureau, Ministry of Labour &Employment. Government of India, clinical Advisory Committee on Cost of Living Index Numbers consisting of representatives of the Ministry of Labour &Employment, Food and Agriculture Finance, Planning Commission, the National Sample Survey Directorate, the Department of Statics (C.S.O), the Indian Statistical Institute and the Reserve Bank of India etc. leading to the construction of Consumer Price Index Number for the working class which was accepted as reliable by this Court in Ahemedabad Mill Owners Association etc. v. The Textile Labour Association.([1966] 1 S.C.R. 382.) We are, therefore, of the opinion that not withstanding the implementation of he recommendations of the Wage Board, there was nothing wrong a )out the linking of the scheme of the Dearness Allowance with the Ahmedabad Cost of Living Index , Number known as Textile Dearness Allowance as before the revision in 1974. Re: Question No. 5: This takes us to determination of the last question. The decision of this Court in Bengal Chemical and Pharmaceutical works Ltd. and Its Workmen &Anr ([1969] 1 L.L.J. 751, 758) no doubt shows that in , fixing wages and Dearness Allowance, the Industry cum-region formula is inter alia to be kept in view. At the same time, it has to be borne in mind that there can be no comparison between a small struggling concern and a large flourishing unit. It follows therefore, that when there is a large disparity between the two concerns engaged in the same line of business in a region with which the industrial Court is dealing is not safe to fix the same wage structure for the large flourishing concern of long standing as obtains in a small struggling concern. (See French Motor Car Company Ltd. and Their Workmen([1962] 2 L.L.J. 744.). It cannot also be lost sight of that with the march of time, the narrow concept of Industry-cum -Region is fast charging and too much importance cannot be attached to region. The modem trends in industrial law seem to lay greater accent on the similarity of industry rather than on the region. It was observed by this Court in Workmen of New Egerton Woollen Mills and New Egerton Woollen Mills &Ors.([1969] 2 L.L.J. 782.) that where there are no 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 concern should be as similar as possible and not disproportionately large or absolutely dissimilar. On the parity of reasoning, it is reasonable to conclude that where there are no comparable concerns engaged in similar industry in t he region, it is permissible for the Industrial Tribunal or Court to look to such similar industries or industries as nearly similar as possible in adjoining or other region in the State having similar economic conditions.As in the instant case there was no comparable concern engaged in the line of business similar to that of the appellant Company in the Saurashtra region, the Industrial Tribunal did not in our opinion, commit any error in taking into consideration for the purpose of comparison the Dearness Allowance paid by Sarabhai Chemicals and other concerns of the like or approximately Eke magnitude in other parts of the State of Gujarat.15.

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

Explanation:
0[ds]The legal position emerging from the aforementioned provisions of the Act being clear, we now proceed to tackle the questions set out above.As the first two questions are inseparably linked up, we propose to deal with them together. Although, prima facie there seems to be considerable force in the Sanghs stand that paras 2.3, 3.1, 3.2 and 3.3 of the aforesaid agreement of December 14, 1973 arrived at between the Employees Union and the appellant Company related only to the special pay and did not cover the Sanghs demand for Variable Dearness Allowance linked to the Ahmedabad cost of living index, we do not consider it necessary ;to go into this question, as the said agreement not having been arrived at during the course of a conciliation proceeding, it could not, according to section 18(1) of the Act bind any one other than the parties thereto. A fortlori, the fact that the Employees Union which hod been duly recognised under the Code of Discipline arrived at the aforesaid agreement with the appellant Company would not operate as a legal impediment in the way of the Sangh (which was not a party to the agreement)to raise a demand or dispute with regard to the Variable Dearness Allowance linked to Ahmedabad cost of living index or affect the validity of the reference by the Government or the jurisdiction of the Industrial Tribunal to go into the dispute. The conclusion that a minority union can validly raise an industrial dispute gains support from section 2(k) of the Act which does not restrict the ambit of the definition of industrial dispute to a dispute between an employer and a recognised majority union but takes within its wide sweep, any dispute or difference between employer and workmen including a minority union of workmen which is connected with employment or terms of employment or conditions of labour of workmen as well as the observations made by this Court in M/s. Dharampal Premchand v. M/s. Dharampal Premchand (Saughandhi) ([1965] 3 S.C.R.394)It may also be relevant to mention in this connection that both the counsel for the Employees Union and the counsel for the appellant Company admitted before the Industrial Tribunal that the aforesaid agreement had been terminated by two months notice (See p. 39 of the Industrial Tribunals Award). We have, therefore, no hesitation in holding that neither the Sangh was precluded from raising the demand or the dispute, nor was the Government debarred from making the reference nor was the Industrial Tribunals competence to go into the dispute and make the award affected in any manner. The first two questions are decidedQuestion No. 3:-This question is no longer res integra. In Jhagrakhan Collieries (P) Ltd. v. Shri G. C. Agarwal, Presiding Officer, Central Government Industrial Tribunal-cum-Labolur Court, Jabalpur &Ors. (supra) Sarkaria, J. speaking for the Bench observed that"an implied agreement by acquiescence, or by conduct such as acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party, being outside the purview of the Act, is not binding on such a worker either under subsection (1) or under sub-section (3) of section 18. It follows, therefore,  that even if 99% of the workers have impliedly accepted the agreement arrived at by drawing V.D.A. under it, will not-whatever its effect under the general law-put an end to the dispute before the Labour Court and make it functus officio under thethe theory of implied agreement by acquiescence sought to be built up on behalf of the appellant on the basis of the acceptance of the benefits flowing from the agreement even by the workmen who were not signatories to the settlement is of no avail to the appellant Company and cannot operate as an estoppel against the Sangh or its members.Re: Question No. 4: It is a matter of common knowledge that the spiral of prices has been constantly rising, and the basket of goods and services has been costing more and more day after day since the outbreak of the Second World War in September, 1939. It is equally well known and indeed is not disputed that in the relevant years the prices of essential commodities and cost of living have been comparatively higher at Mithapur that at other places in the districts like Jamnagar, Dharangadhra, Porbandar, Bhavnagar etc. and the appellant Company ha d not been maintaining uniform standard of Dearness Allowance, and had been paying higher Dearness Allowance to the workmen in its Head Office at Bombay than to its workmen at Mithapur. The statistics extracted from various annual reports etc. exhibited in the case particularly Exhibit 13(6) go to show that the appellant Company which, was established more th in 40 years ago besides being a highly integrated chemical complex based on the solar evaporation of sea water in India is the largest solar salt producing concern in the country. The statistics also show that production of soda ash in diverse forms by the appellant Company for the relevant years is considerably higher than the combined production of soda ash of Dharangadhra Chemicals and Saurashtra Chemicals-the two other concerns in the Saurashtra region. The statistics also establish that there is no other heavy Chemicals Concern in the region which can be favorably compared to the appellant Company in so far as the nature, and extent of business, capital outlay, percentage of gross and net profits, strength of labour force, reserves, dividends on Equity Share prospects of future business are concerned. As in Chart (Exh. 13(26) show s that the percentage of wages in the appellant Company is the lowest amongst the seven companies listed therein. Considering all the relevant factors which are to be born in mind in fixing the Dearness Allowance, it is evident that the appellant Company holds a unique position in heavy chemicals in the region. It is in these circumstances that the Industrial Tribunal was constrained to turn to similar industries in Gujarat and found in the light of the aforesaid guiding factors that Sarabhai Chemicals, Baroda was the nearest similar industry which could legitimately serve as a comparable concern. The statistics also establish that besides Sarabhai Chemicals, Baroda, Anil Starch, Ahmedabad, Alembic Chemicals Works, Baroda, Attul Products, Bulsar and Ahmadabad Manufacturing and Calico Printing Co. Ltd. which are included in the list of heavy chemical factories covered by the Wage Board were paying 100% of Textile Dearness Allowance to it s workmen. It is also evident from Exhibit 23 that the total pay packet paid to Mithapur , workers was much less as compared to the total pay packet of the workers in other chemical and pharmaceutical companies alluded to in Exhibit 23 . The material on the-record also makes it abundantly clear that the appellant Company has been making huge profits over the years and its financial position is so stable that it could not only give Variable Dearness Allowance on the basis of what was being paid to the workmen in the Textile Industry but could pay even higher allowance as was being paid to its workmen in the Head Office at Bombay. The Tribunal was, therefore, justified in linking the Dearness-Allowance in , question to t he Textile Dearness Allowance paid to the industrial workers at Ahmedabad which is based on the Report of Family Living Survey among industrial Workers at Ahmedabad, 1958-59, complied as a result of the joint investigation carried on in a rational and scientific manner by several institutions viz. Labour Bureau, Ministry of Labour &Employment. Government of India, clinical Advisory Committee on Cost of Living Index Numbers consisting of representatives of the Ministry of Labour &Employment, Food and Agriculture Finance, Planning Commission, the National Sample Survey Directorate, the Department of Statics (C.S.O), the Indian Statistical Institute and the Reserve Bank of India etc. leading to the construction of Consumer Price Index Number for the working class which was accepted as reliable by this Court in Ahemedabad Mill Owners Association etc. v. The Textile Labour Association.([1966] 1 S.C.R. 382.) We are, therefore, of the opinion that not withstanding the implementation of he recommendations of the Wage Board, there was nothing wrong a )out the linking of the scheme of the Dearness Allowance with the Ahmedabad Cost of Living Index , Number known as Textile Dearness Allowance as before the revision in 1974. Re: Question No. 5: This takes us to determination of the last question. The decision of this Court in Bengal Chemical and Pharmaceutical works Ltd. and Its Workmen &Anr ([1969] 1 L.L.J. 751, 758) no doubt shows that in , fixing wages and Dearness Allowance, the Industry cum-region formula is inter alia to be kept in view. At the same time, it has to be borne in mind that there can be no comparison between a small struggling concern and a large flourishing unit. It follows therefore, that when there is a large disparity between the two concerns engaged in the same line of business in a region with which the industrial Court is dealing is not safe to fix the same wage structure for the large flourishing concern of long standing as obtains in a small struggling concern. (See French Motor Car Company Ltd. and Their Workmen([1962] 2 L.L.J. 744.). It cannot also be lost sight of that with the march of time, the narrow concept of Industry-cum -Region is fast charging and too much importance cannot be attached to region. The modem trends in industrial law seem to lay greater accent on the similarity of industry rather than on the region. It was observed by this Court in Workmen of New Egerton Woollen Mills and New Egerton Woollen Mills &Ors.([1969] 2 L.L.J. 782.) that where there are no 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 concern should be as similar as possible and not disproportionately large or absolutely dissimilar. On the parity of reasoning, it is reasonable to conclude that where there are no comparable concerns engaged in similar industry in t he region, it is permissible for the Industrial Tribunal or Court to look to such similar industries or industries as nearly similar as possible in adjoining or other region in the State having similar economic conditions.As in the instant case there was no comparable concern engaged in the line of business similar to that of the appellant Company in the Saurashtra region, the Industrial Tribunal did not in our opinion, commit any error in taking into consideration for the purpose of comparison the Dearness Allowance paid by Sarabhai Chemicals and other concerns of the like or approximately Eke magnitude in other parts of the State of Gujarat.