Case: Unichem Laboratories Ltd Vs. The Workmen

1. These three appeals, by special leave, arise out of the award, dated April 15, 1971, of the Industrial Tribunal, Maharashtra, Bombay in Reference (I.T. Nos. 20 and 105 of 1969 and 70 of 1970)3. We will now state the circumstances under which the reference came to be made to the Tribunal5. In addition to the basic wages, referred to above the employees were getting dearness allowance, which in the case of operatives was equal to 80% of the revised textile scale of dearness allowance and in the case of operatives was equal to 80% of the revised textile scale of dearness allowance and in the case of clerical and subordinate staff 100% of the revised textile scale of dearness allowanceThough the award prescribed to the clerical and subordinate staff the same rate of dearness allowance of the operatives plus a fixed amount, as referred to above, the company continued to give them dearness allowance, equal to 100% of the revised textile scale of dearness allowance. This was also supplemented with the fixed amount depending upon the slab of the salary9. The above basic scales in respect of all the categories were again supplemented by dearness allowance as provided for in the award passed in Reference (I.T. No. 402 of 1963). The company had also an incentive bonus scheme, by virtue of which a large number of operatives were getting on an average an additional sum of Rs. 28 per month. The company further revised from about November 1, 1969, the wage scales of drivers and watchmen as follows :Drivers ... Rs. 70-6-100-9-145-12-205-E.B-15-25010. The above was the pattern of the wage structure and dearness allowance for the operatives and the clerical and subordinate staff12. They also demanded that the above scheme of dearness allowance was to have retrospective effect from August 1, 1967. In the same demand the unions required that the workmen should be granted one months wages for every year of service as gratuity in case of resignation, dismissal, discharge, death or termination of service for any reason. By this demand the unions required modification of the then existing pattern of payment of dearness allowance at 95% of revised textile scale of dearness allowance to operatives and 100% of revised textile scale of dearness allowance plus Rs. 7.50 to Rs. 25 paid to the clerical and other staff. The company did not agree to the demand and in consequence by order dated January 14, 1969, the Government of Maharashtra referred for adjudication to the Industrial Tribunal the demands. This reference was registered as Reference (I.T. No. 20 of 1969)16. The appellant resisted the claims made for revision of dearness allowance and wage scales as well as the modifications sought for in the gratuity scheme. The appellant also wanted the Tribunal to uphold the notice of change given by it under S.9A of the Industrial Disputes Act in respect of the incentive bonus scheme. In particular the appellant contended that it was not a comparable concern with the units referred to by the unions and that any modification in the scale of dearness allowance and wages would be beyond its financial capacity. The appellant also relied on the coming into force of the Drugs (Price Control) Order, 1970, with effect from May 16, 1970. According to the appellant the wages and dearness allowance paid by it to the workmen were far higher than what were paid by other units in the region. The company also referred to the various awards wherein it had been held that it could not be compared with an international company having branches in Bombay or with foreign concerns though incorporated in India. The wage scales had been fixed by settlement dated June 24, 1966, and that nothing has happened since the date of settlement to justify a revision of wage scales and dearness allowance. The appellant further urged before Tribunal that the double linking of dearness allowance, as required by the unions had never been adopted for the pharmaceutical units in the Bombay region. According to the appellant, the revision effect regarding the incentive bonus scheme was justified and the amount of Rs. 2 offered per point was much more than the prevailing rate of Rs. 71.43 per point. It also opposed the revision of the then existing gratuity scheme as demanded by the unions. According to the appellant the gratuity scheme which was in force had been introduced by a consent award in 196317. The appellant filed copies of balance sheets and profit and loss accounts from 1962-63 to 1969-70 and various other charts in support of its plea that it will not be able to bear the additional financial burden that would result if the wage scales and dearness allowance are revised as per the demands made by the unions18. It will be seen from the facts mentioned above that the main controversy between the parties related to the revision of wage structure and dearness allowance. As the demands of the workmen related to regrouping in different grades, the operatives and the clerical and subordinate staff, and as this involved a very radical change in the then existing pattern of grades, the Tribunal felt that the opinion of an expert should be obtained on the advisability of the reclassification. In this regard both the unions and the appellant filed a joint application on December 22, 1970 requesting the Tribunal to appoint Sri N. L. Gadkari, retired Chief Inspector of Factories, Maharashtra State as an assessor. They also prayed that the points mentioned in the application be referred for the opinion of the assessor. The assessor submitted his report on February 22, 1971, in which he recommended the continuance of the then existing grades26. The Tribunal did not accept the large demand made by the unions for a general adjustment in increments of the employees. Nevertheless, in view of the revision of the scales of wages, it gave certain directions so that the employees may be fitted in the appropriate revised wage scales.

Reasoning: 27. The parties very hotly contested the question of dearness allowance as well as the pattern to be adopted. As there were different systems of dearness allowance for the operatives and the clerical and subordinate staff, the unions desired that the common scheme of dearness allowance on a slab system should be adopted. The Tribunal having regard to the decisions of this Court in Greaves Cotton and Co. and others v. Their Workmen, [1964 - I L.L.J. 342]; (1964) 5 S.C.R. 362, and Bengal Chemical & Pharmaceutical Works Ltd. v. Its Workmen, [1969 - I L.L.J. 751]; (1969) 2 S.C.R. 113, held that there was no justification for having two systems of dearness allowance, one for the operatives and the other for the members of the clerical and subordinate staff. Accordingly, the Tribunal held that all the employees should get the same dearness allowance irrespective of the fact whether they were operatives or members of the clerical and subordinate staff.