Case: Workmen Of Shri Bajrang Jute Mills Ltd Vs. Employers Of Shri Bajrang Jute Mills Ltd

due weight to its recommendations as such recommendations would have been in conformity with the principle of industry-cum-region, a principle binding the tribunals. It would be difficult in that event for any unit in the industry in that region to propound a grievance that its capacity to pay was not taken into account as the scales so framed would have been determined after taking into consideration scales prevailing in comparable units, whether in that industry or other industries in that region depending on whether in a particular area the accent was on the industry part or the region part of the principle of industry-cum-region. The Board, therefore, ought to have selected comparable units each of the regions where the jute mills are situate and after their examination arrive at common wage-scales for each of those regions instead of grouping together 20 mills from West Bengal and 9 mills from the other region and treating them as constituting a cross-section representing the industry.The position in which a Tribunal called upon to fix wage-scales would be placed would not be an enviable one for it would find itself in an embarrassing situation where it had either to accept the wage-scales fixed by the Board though they were fixed in contravention of the principle of industry-cum-region, or discard them and proceed to fix them on its own on the principle of industry-cum-region, a principle which, as the industrial law stands today, it is bound to follow.43. We have already pointed out that the Wage Board has taken the view that the wage level in the entire jute industry should be uniform throughout the country. It has also stated that the wage structure for the jute industry in West Bengal has to be devised having regard to the pattern of wage-structure existing in the cotton textile industry in that area. It is on this basis, and after comparison of the wage structure prevailing in the cotton textile industry in that area, that the Wage Board has come to the conclusion that the minimum monthly emoluments of a workers in West Bengal must be fixed at Rs. 81/- taking in the basic wages the Wage Board increment and the variable dearness allowance. The standardised basic wages enumerated in Appendix XI has been made applicable to all the jute mills outside West Bengal also, including the respondent mill. We have already referred to the recommendation of the Wage Board in para 7.65 (c) that the respondent jute mill should adopt the standardised basic wages fixed in Appendix XI, in a phased manner. Over and above that basic wage, the Wage Board has given an increase of Rs. 8.33 per month, as Wage Board increment and a variable dearness allowance of Rs. 32.50 per month. Though it had been pressed by the jute mills outside West Bengal, that they had to pay higher freight charges on coal, batching oil etc., and that mill stores and electricity charges were higher from them, the Wage Board insisted that the wage level in the jute industry should be uniform throughout the country. The result of the Wage Boards recommendations, if they are to be given effect to by the respondent mill, will be that as against the minimum monthly wage of Rs. 52.17 that was being paid by the respondent there is a very sharp rise in its wage bill. The claim of the respondent that the recurring expenditure for implementation of the recommendation of the Wage Board is over Rs. 3,75,000/- and that it has not the financial capacity to bear this burden, has been accepted by the Industrial Tribunal and that finding has not been challenged before us by the appellant. The respondent mill, which has only 120 looms, has been compared with the two big mills in Andhra Pradesh, viz., Nellimarla and Chitavalsa, having 326 and 500 looms respectively, as also with very large mills in West Bengal, some of whose loom capacity is more than 2000. That clearly shows that all mills, small as well as large, economic a well as uneconomic, have been clubbed together and treated alike by the Wage Board. In considering the capacity, the Wage Board has taken 20 jute mills in West Bengal as representing a fair cross-section of the industry in that region and it has taken 9 reporting mills outside West Bengal for this purpose. Three mills selected in Andhra Pradesh were the Nellimarla, Chitavalsa and the respondent mills. We have already shown the large disparity that exists between the mills in West Bengal as also between the Nellimarla and Chitavalsa and the respondent mill. We have also referred to the decisions of this Court that to compare wage scale comparable establishments in the region should be taken into account and that a small struggling concern should not be compared with a large, flourishing one. But this is exactly what has happened, when the Wage Board treated alike the respondent mill not only with Nellimarla and Chitavalsa jute mills but also with some of the very big and prosperous mills in West Bengal.44. The various aspects, dealt with above, establish that the essential pre-requisite of deciding the wage structure, viz.,to consider the capacity of the industry to pay on the principles laid down by this Court, is absent in the recommendations of the Wage Board and that mendations of the Wage Board and that introduces a fatal infirmity in its decision.45. The question of bonus does not arise for our consideration as the respondent has stated that the management has entered into a settlement with its workmen and that they will be entitled for bonus only if the net profits exceed Rs. 75,000/-. It has further been stated that there is no available surplus to warrant the payment of bonus. These statements have not been controverted on behalf of the appellant.46. To conclude, the award of the Industrial Tribunal that the demand of the workmen for implementation of the recommendations of the Wage Board is not justified, is correct.

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

Explanation:
0[ds]The reasons for the heavy concentration in West Bengal of jutemills are stated to be factors like abundant supply of raw material, proximity of coal fields in Ranigunge, navigability of the Hooghly and the availability of the required type of labour in the neighbourhood. So far as jute mills at other places in India are concerned, in para 3.6 of the Report it is stated that small jutem ills have come up in other States, including Andhra Pradesh, but the total loomage of all such mills outside West Bengal is only 3,242 looms, and the mills are distributed in various places.Having decided that the wage level in the Jute Industry should be uniform throughout the country, the Wage Board, in para 7.52 decides that the total minimum wage in West Bengal should be fixed at Rs. 81/- per month, consisting of (i) basic wage; (ii) Wage Board increment; and (iii) variable dearness allowance. The Wage Board further, in para 7.56, states that in addition to basis wages, all categories of workers should be paid an increase of Rs. 8.33 per month inclusive of interim relief of Rs. 3.42 already granted by it and accepted by the Central Government. This increment of Rs. 8.33 per month is desired to be shown as a separate item under the heading Wage Board increment in the case of all categories of workers and that increment should be treated as part of the basic wages for all purposes like bonus, provident fund etc.On the basis of these calculations, in para 7.58 the Wage Board fixes the total monthly minimum wage payable at Rs. 81/- comprised of (a) Rs. 40.17 basic wage; (b) Rs. 8.33 Wage Board increment; and (c) Rs. 32.50 being variable dearness allowance. In para 7.59, the Wage Board states that the standardised basic wages of various categories of workers of a jute mill for a month of 26 days or 208 hours are enumerated in Appendix XI to the Report.31. When considering the wage structure for the mills outside West Bengal, in para 7.65 (a) the Wage Board states that the basic wages of all categories of workers in the jute mills mentioned by it, outside West Bengal, which includes the respondent mill, should be the same as those in jute mills in West Bengal mentioned in Appendix XI. Therefore, it is clear that the minimum basic wage fixed for the mills in West Bengal has been applied to all the mills outside West Bengal, including the respondent. But so far as the respondent mill is concerned, the Wage Board, in the same paragraph, gives a direction that the standardised basic wages mentioned in Appendix XI of the Report is to be adopted in a phased manner as follows :During the first 24 months from the date on which the recommendations of the Board will be effective Basic wages of all categories of workers should be 20 per cent less than the standardised wages shown in Appendix XI. During the next 12 months Basic wages of all categories of workers should be 10 per cent less than the standardised wages shown in Appendix XI. During the next 12 months Basic wages of all categories of workers should be 5 per cent less than standardised wages shown in Appendix XI ThereafterBasic wages of all categories of workers should be the same as standardised wages shown in Appendix XI. 32. In paragraph 7.66 the Wage Board directs that all categories of workers in jute mils situated outside West Bengal should also be paid the Wage Board increment of Rs. 8.33 per month, inclusive of interim relief of Rs. 3.42 already granted.We have fairly exhaustively dealt with the various matters considered by the Wage Board in its Report. It is no doubt true that the Wage Board has gone elaborately in the matter of fixing of the wage structure in the jute industry. We have earlier referred to the various principles laid down by this Court which should govern the fixing of wages and dearness allowance. The Board itself states that it was fixing a fair wage for thethe various matters dealt with by the Wage Board and the manner of approach made by it as referred to above, we are satisfied that no attempt has been made by the Wage Board to divide the industry into classes.It is also clear that no cross-section of such classes has been taken for investigation to decide what burden the units in each class can bear.38. The approach of the Wage Board to determine uniform wage scales for the entire industry must suffer from an inherent weakness. Conditions, such as easy access to raw materials, transport, nearness of markets for disposal of the manufactured product, availability of labour, the type of market whether within or outside the country for which the manufactured articles are intended and diverse other factors must vary from region to region. Likewise, economic conditions affecting the consumer prices must and do differ as is well known, from region to region, depending largely upon whether a particular region is self-sufficient or not in the elemental needs of its citizens and these in turn are bound to affect living standards. It would therefore be too artificial and unrealistic an approach to be oblivious of these differences and to attempt to group together all establishments and factories and device common wage-scales applicable to all of them disregarding the peculiar features of the industry in a particular region. Favourable conditions prevailing in one region would place industrial concerns there in a position better than those in other regions where such conditions do not occur. Similarly, in regions where consumer prices are lower, labour would be better off than in the rest of the regions where the living index is higher; yet, the wage scales would be the same in all the regions. Uniformity of wage-scales, irrespective of differences in conditions would place both the employees and the employers in regions where such favourable conditions prevail in an unfairly advantageous position over the employees and employers in the other regions. Instead of attaining harmony there would as a result arise inevitably a feeling of discrimination. Though, as stated by this Court in Express Newspapers Case, 1959 SCR 12   = (AIR 1958 SC 578  ), it may not be possible or even necessary for a Wage Board to scrutinise all the establishments separately and it would be enough to take a representative cross-section of the industry for assessment, the cross-section to be a truly representative one and capable of giving a true picture of the conditions of both the industry and labour must be one from each region where establishments of the industry in question are situate.Another difficulty in accepting the Wage Boards recommendations arises from the fact that the Board equated the cotton textile industry in West Bengal with the jute industry there and finding the wage-scales in the jute industry lower than those in the cotton textile industry the Board raised the scales in the jute industry so as to bring them to the level of the cotton textile industry. Having so done, the next step which the Wage Board took was to raise also the wage-scales in mills outside West Bengal to bring them in line with the scales proposed by it for the mills in West Bengal. This process gave rise to two infirmities : (i) that the Board treated cotton textile concerns in West Bengal as comparable to those in jute industry; and (ii) it treated the jute mills in West Bengal as comparable to those outside, although conditions in the different regions where they were situate were obviously different. This meant that the Board gave a go-by to the well established principle of industry-cum-region consistently applied by Industrial Tribunals whenever wage-scales had to be determined.41. Such a disharmony in the approach to the problem of determination of wages scales by a Wage Board on the one hand and an Industrial Tribunal on the other must inevitably occur because whereas the attempt of a Board would be to uniformise wage scales for the entire industry, though it is spread over different parts of the country where conditions can rarely be expected to be similar or the same, the concern of a Tribunal would principally be to determine equitably the wage scales of a single unit with which it is for the time being concerned. The difficulty would be all the more felt by such a Tribunal where it is faced with the dilemma whether or not it should follow the Boards recommendations arrived at on principles different from (as in the present case) those consistently followed in industrial adjudication. One should have thought that this difficulty would have been realised before the recommendations of the Wage Board were accepted by Government.42. The difficulty referred to above arising from the difference in the functions of the two bodies could well have been obviated if the Wage Board instead of laying down uniform scales for the entire industry, irrespective of where its several units were situate and of the different conditions prevailing in various areas, had considered the units in each area separately and determined the wage-scales for each such area by taking from that area a representative cross-section of the industry where possible or where that was not possible by taking comparable units from other industries within that area, thus following the principle of industry-cum-region. It is true that in doing so uniformity of wage-scales for the entire industry would not have been attained. But in a vast country like ours, where conditions differ often radically from region to region and even the index of living differs within a fairly wide range, such a target cannot always be just or equitable. If the wage-scales had been determined by the Board in the manner aforesaid, even though the Board is not a statutory body and consequently its decisions are of a recommendatory character, it would be possible for industrial tribunals to give due weight to its recommendations as such recommendations would have been in conformity with the principle of industry-cum-region, a principle binding the tribunals. It would be difficult in that event for any unit in the industry in that region to propound a grievance that its capacity to pay was not taken into account as the scales so framed would have been determined after taking into consideration scales prevailing in comparable units, whether in that industry or other industries in that region depending on whether in a particular area the accent was on the industry part or the region part of the principle of industry-cum-region. The Board, therefore, ought to have selected comparable units each of the regions where the jute mills are situate and after their examination arrive at common wage-scales for each of those regions instead of grouping together 20 mills from West Bengal and 9 mills from the other region and treating them as constituting a cross-section representing the industry.The position in which a Tribunal called upon to fix wage-scales would be placed would not be an enviable one for it would find itself in an embarrassing situation where it had either to accept the wage-scales fixed by the Board though they were fixed in contravention of the principle of industry-cum-region, or discard them and proceed to fix them on its own on the principle of industry-cum-region, a principle which, as the industrial law stands today, it is bound to follow.43. We have already pointed out that the Wage Board has taken the view that the wage level in the entire jute industry should be uniform throughout the country. It has also stated that the wage structure for the jute industry in West Bengal has to be devised having regard to the pattern of wage-structure existing in the cotton textile industry in that area. It is on this basis, and after comparison of the wage structure prevailing in the cotton textile industry in that area, that the Wage Board has come to the conclusion that the minimum monthly emoluments of a workers in West Bengal must be fixed at Rs. 81/- taking in the basic wages the Wage Board increment and the variable dearness allowance. The standardised basic wages enumerated in Appendix XI has been made applicable to all the jute mills outside West Bengal also, including the respondent mill. We have already referred to the recommendation of the Wage Board in para 7.65 (c) that the respondent jute mill should adopt the standardised basic wages fixed in Appendix XI, in a phased manner. Over and above that basic wage, the Wage Board has given an increase of Rs. 8.33 per month, as Wage Board increment and a variable dearness allowance of Rs. 32.50 per month. Though it had been pressed by the jute mills outside West Bengal, that they had to pay higher freight charges on coal, batching oil etc., and that mill stores and electricity charges were higher from them, the Wage Board insisted that the wage level in the jute industry should be uniform throughout the country. The result of the Wage Boards recommendations, if they are to be given effect to by the respondent mill, will be that as against the minimum monthly wage of Rs. 52.17 that was being paid by the respondent there is a very sharp rise in its wage bill. The claim of the respondent that the recurring expenditure for implementation of the recommendation of the Wage Board is over Rs. 3,75,000/- and that it has not the financial capacity to bear this burden, has been accepted by the Industrial Tribunal and that finding has not been challenged before us by the appellant. The respondent mill, which has only 120 looms, has been compared with the two big mills in Andhra Pradesh, viz., Nellimarla and Chitavalsa, having 326 and 500 looms respectively, as also with very large mills in West Bengal, some of whose loom capacity is more than 2000. That clearly shows that all mills, small as well as large, economic a well as uneconomic, have been clubbed together and treated alike by the Wage Board. In considering the capacity, the Wage Board has taken 20 jute mills in West Bengal as representing a fair cross-section of the industry in that region and it has taken 9 reporting mills outside West Bengal for this purpose. Three mills selected in Andhra Pradesh were the Nellimarla, Chitavalsa and the respondent mills. We have already shown the large disparity that exists between the mills in West Bengal as also between the Nellimarla and Chitavalsa and the respondent mill. We have also referred to the decisions of this Court that to compare wage scale comparable establishments in the region should be taken into account and that a small struggling concern should not be compared with a large, flourishing one. But this is exactly what has happened, when the Wage Board treated alike the respondent mill not only with Nellimarla and Chitavalsa jute mills but also with some of the very big and prosperous mills in West Bengal.44. The various aspects, dealt with above, establish that the essential pre-requisite of deciding the wage structure, viz.,to consider the capacity of the industry to pay on the principles laid down by this Court, is absent in the recommendations of the Wage Board and that mendations of the Wage Board and that introduces a fatal infirmity in its decision.45. The question of bonus does not arise for our consideration as the respondent has stated that the management has entered into a settlement with its workmen and that they will be entitled for bonus only if the net profits exceed Rs. 75,000/-. It has further been stated that there is no available surplus to warrant the payment of bonus. These statements have not been controverted on behalf of the appellant.46. To conclude, the award of the Industrial Tribunal that the demand of the workmen for implementation of the recommendations of the Wage Board is not justified, is correct.