Case: Karam Chand Thapar and Bros. Limited, and Others Vs. Their Workmen

2. In the first order of reference made by the Government of West Bengal on 9 May, 1955 only Karam Chand Thapar & Bros. Ltd., was mentioned as the employer. In this reference fourteen matters, some of which will be referred to in detail later, between Karam Chand Thapar & Bros., Ltd., and their workmen were referred for adjudication. The order of reference was amended on 22 September, 1955 by adding 28 companies mentioned in a schedule and described as the associate companies of Karam Chand Thapar & Bros., Ltd., as the employers.3. The second order of reference was made on 18 July 1955. There also Karam Chand Thapar & Bros., Ltd., was originally named as the employer and two items were referred to adjudication in these wordsThis order of reference was amended by an order of the Government of West Bengal on 11 April, 1956. By this order of 11 April, 1956, 37 limited companies including the 28 companies (which had been made parties to the first order of reference in September, 1953) were mentioned as employers. So that in the second order of reference as it ultimately stood the employers were described as Karam Chand Thapar & Bros., Ltd., and companies mentioned as their associate companies.The third order of reference was made on 6 February 1956. Karam Chand Thapar & Bros., Ltd., and 37 companies were mentioned as the employers. These 37 companies were identical with 37 companies mentioned in the second order of reference and out of these the name of one United Collieries, Ltd., was deleted later on. Two matters in dispute were referred in this third order of reference. They wereQuantum of bonus for the yearof theemployers a preliminary objection was raised denying the jurisdictionthe tribunal todecide whether thewere workmen ofKaram Chand Thapar & Bros., Ltd., or one morees mentioned as associate companies. The tribunal rejected this objection and held on a considerationce that thewere all workmen of Karam Chand Thapar & Bros., Ltd., the managing agents, and not the workmener companies. The tribunal then considered the different matters in dispute and gave its award in respect of each. Against this decisional these five appeals have been field on the strength of special leave granted by thisof 1962) being by the employers and two (C.A. Nos. 102 and 103 of 1962) being

Reasoning:
Sri Sastri has very rightly not raised before us the objection that was raised beforethe tribunal toits jurisdiction to decide this question. It is obvious that the contentionen that Karam Chand Thapar & Bros., Ltd., was their employer formed the basis of all their claims and as this contention was seriously contested, except as regards 18 persons, by this company and also the companies under its management, the matter had necessarily to be decided by theIn our opinion, this argument is wholly unwarranted.The company admittedly functions as the managing agents of 3036 associated companies mentioned in the references. It is further admitted that the company did originally act as the managing agentser six companies also. It appears however that prior to the date of reference the company had in form given up its managing agency as regards those six concerns, viz., Indian City Properties, Ltd., Jagatjit Cotton Textiles Mills, Ltd., Karam Chand Thapar & Bros., Ltd., Karam Chand Thapar & Bros. (Coal Sales), Ltd., Modern Agencies Mills, Ltd., Produce Exchange Corporation, Ltd., and Sri Sitaram Sugar Mills, Ltd. The company had its head office at 5, Royal Exchange Place,It appears from Ex. 30 that this head office was shifted on 23 January, 1960 to its new premises, at Thaper House, 25, Brabourne Road,It is interesting to notice that in this document which is a copy of an advertisement published in the daily Amrita Bazar Patrika about the shifting to the new premises, the language is "from 23 January, 1960 our head office is shifting to its new premises, Thaper House, 25, Brabourne Road,Then follow the names of 36 concerns mentioned in the reference and some others followed by the name "Karam Chand Thapar & Bros. (Private), Ltd."It is not disputed that the workmen before us work in this building. Their case is that they are employees of Karam Chand Thapar & Bros. (Private), Ltd., at this heads case as also the caseed companies is that only eighteenen are the companys workmen and the remaining 378 working in this building are not the companys employees. It is said that 255m are common employees of different groupsed companies, while 123 are the exclusive employees of different concerns.It is difficult to see how as regards those who are said to be common employees of different groups of concerns it can even be seriously argued that they are the employees of anye concerns. It is true that the mere fact that Karam Chand Thapar & Bros. appointed these men would not be sufficient to show that Karam Chand Thapar & Bros., Ltd., are their employers. For under the termsmanaging agency agreement the managing agents are empowered to make appointmentsed concerns. We have however the additional important fact that the allotmentthese common employeesto particular concerns is wholly in the handscompany, Karam Chand Thapar & Bros., Ltd. The tribunal has recorded a definite finding that the company used to transfer employees from one concern to the other or from one group of concerns to the other. There is nothing before us that would justify us in interfering with this finding of fact. On the contrary, the several appointment letters to which Sri Sastri drew our attention do indicate that the managing agents keep in their hands the right to employthese common employeesfor doing the work of one membergroup or another just as they thought fit and proper. It appears also that there is one provident fund scheme controlled by the company through a board a trustees selected by the company for all these employees. These and other circumstance which have been mentioned in detail by the tribunal fully justify the tribunals conclusion that these persons, said to be common employees of different concerns, are really the employeescompany, Karam Chand Thapar & Bros.,In the present case the tribunal thinks that the terms used in the new appointment letters were a mere device to conceal the real state of affairs. The tribunal has discussed in detail the evidence of witnesses showing that even in the casee persons said to be employees of particular concerns only, the serviceses were transferred from one concern to another at the directionthe managing agentsand that every such person was "completely in the controlny in the matter of making his service available to anye concerns at any moment." We are satisfied that there is ample evidence on the recordthe tribunals decisionand there is nothing that would justify us in interfering with it.SriSastri also drew our attention to the fact that for sixes Karam Chand Thapar & Bros. had ceased to be managingagents. Apart from the fact that according to the tribunal this cessation of managing agency is only in form and that in fact the company has continued to manage these six concerns also, we do not see how this question is at all relevant if as in our opinion; the tribunal has rightly found that the employees are the workmen of Karam Chand Thapar & Bros., Ltd. The fact that this company ceased to manage one or more companies, formerly under its managing agency, cannot in law affect the status of employees.7. We are therefore of opinion that the decisionthe tribunal that theworkmen were workmenof Karam Chand Thapar & Bros., Ltd.,s, andnot the workmener companies, cannot be successfullys case was that, having regard to the nature of duties of peons and sweepers, it was not practicable to observe the same hours for them as for otheremployees. It has been rightly pointed out that for a proper workingce it is necessary that sweepers and peons should start their work sometime before other employees come and should stay on for some time after the other employees depart. The tribunal has recognized this position and has ordered that it will be open to the company to direct these subordinate staff to attend officebefore the normal time to be regulated by a system of rotation subject to overtime wages being paid at the rates fixed by the award. For working beyondp.m. on week days andp.m. on Saturday, also the tribunal has ordered that these employees should be entitled to overtime payment. In our opinion, these directions are just and proper.Issue3 was with respect to the companys holding up annual increment in seventeen cases.The tribunal refused relief as regards some; as regards the test it directed that their pay should be fixed in their next stage in the scale with effect from 1 April, 1953 and the company should pay them the arrears in wages arising from the deficiency for not giving the annual increment. Thesole point raised by Sri Sastri was that to give annual increment or not was at the absolute discretioncompany, and so the withholding of increments on 1 April, 1963 in considerationthe fact thatthese employees had their pay fixed under the previous award with effect from 12 September, 1952 and thereby secured an increase in their wages, is fullyjustified. We are unable to find any support in principle or authority for the submission that granting or withholding of annual increments is at the absolute discretionthe employer andtherefore find no reason to interfere withthe tribunals decisions main criticism against the award is that the tribunal has given the workmen more than theirof theworkmen, Sri Chatterjee denied this and expressed his willingness to have the award modified by giving the workmen the two grades A and B as claimed byri at first was agreeable to this suggestion but ultimately admitted that theas granted by the award were less favourable than what had beenclaimed. In view of this we think his attack against the award in the matter ofmust be rejected.The tribunal has give detailed directions as regards the adjustment of employees on the old B grade and the old A grade in the new grade A as awarded by it. It has however given no directions as regards the adjustmentay of employees on the old grades C and D in the new grades B and C which respectively replaced them. The workmen in their appeal have prayed for proper directions for adjustment, similar to those given by the tribunal in respectthe new grades B andC. It appears to us to be necessary to direct that employees on the old grade C and the old grade D should be fitted intothe new grades B andC at the next higher scale of pay. We do not think we shall be justified in making any further directions in the matter.On an examinationer we are of opinion that the tribunal is on the whole justified in its conclusion that "the company is in the path of steady prosperity and it would be fair and appropriate to increase the rate of dearness allowance."The tribunal has rejected the workmens claim to the rate of dearness allowance as under the Bengal Chamber of Commerce but has awarded it at the rate of 100 per cent for Rs. 100, 50 per cent on the next Rs. 100 and 25 per cent on the remaining salary for the clerical staff. For the subordinate staff the tribunal has increased the old rate of dearness allowance from Rs. 45 to Rs. 48.The workmen in their appeal contend that the Bengal Chamber of Commerce rate of dearness allowance should have beenallowed. Dealing with this question the tribunal has pointed out that almost all the constituent membersthe Bengal Chamber of Commercehave had long experience in industrial field, having started their business in India many years before the commencementnt century. There is therefore no reasonable basis for asking companies like Karam Chand Thapar & Bros., Ltd., which was started only about 35 years ago, to bear the burdenthe dearness allowancepaid by membersBengal chamber of commerce. Though therefore it is true that the clerical staff of memberse Bengal Chamber of Commerceand the clerical staff of this company are drawn from the same social class having similar conditions of living and living standards, we think there is considerable weight in the reason given by the tribunal for awarding dearness allowance at somewhat lesser rates thanBengal Chamber of Commercerates.The objections by the company as well as the workmen to the award on the issue of dearness allowance must therefore fail.14.The sixth matter in dispute mentioned is the first order of reference was leave and leavethink there is considerable force in this contention. In the award as it stands, an employee who has served for say, even for one year, would be entitled to leave for a period up to six months in the case of protected illness. It is true that this will be without pay. But the companys difficulty would be that it would not be able to engage new men on permanent basis in place of such employees. It appears to us that the workmen who had served the company for less than five years can be generally said not to have become so much partp.m. on week days and2 p.m. onOn the one hand we think that on principle overtime allowance should have relation to the total wage packet, viz., basic wage plus dearness allowance, and that there is no reason to interfere withthe tribunals decisionon this point; on the other hand we do not find anything to justify raising it to more than 1.25 the wages as granted by the tribunal on a considerationthe company asalso the practice prevalent in other concerns in the neighbourhood.16.The claim for bonus was disallowed by the tribunal. The workmen in their appeal have challenged the correctness of this part