Case: Hindustan Hosiery Industries Vs. F. H. Lala And Another

2. It appears that the appellant is a partnership firm which was constituted and commenced production in April 1967. The firm manufacturers and sells nylon and hosiery goods such as socks,and the like. It is registered with the Maharashta State Directorate of Industries as a small scale industry, Prior to April 1967, all the partners of the appellant were partners of a firm known as M/s. Hindustan Hosiery Factory. That firm again was constituted and commenced business on and from 15th December, 1963, after the dissolution of India Hosiery Factory on 14th December, 1963, due to differences amongst the partners. On the same date, some other partners of India Hosiery Factory constituted another firm known as Stretchlon Private Ltd. While Stretcholon Private Ltd., continued to function. Hindustan Hosiery Factory was closed in August 1966 and the appellant constituted and commenced business in the name and style of Hindustan Hosiery Industries with effect from 17th April, 1967, on which date another firm also commenced business under the name and style of Hindustan Hosiery Mills. It appears that all these three firms, namely, Stretchlon Private Ltd., the appellant and the Hindustan Hosiery Mills are off shoots of the Indian Hosiery Factory with a complement of 800 workmen which was actually the pioneer in the industry.3. The Sabha contended before the Tribunal that the consolidated wages paid to the employees were extremely low. According to the Sabha, theworkmen got as low a wage as Rs. 2.50 per day and never higher than Rs. 3.50 per day. Theworkers, who, according to the Sabha, are skilled workers, earned between Rs. 6/er day. The Sabha, therefore, claimed a revision of the wages of both the categories.4. The appellant resisted the claim. According to the appellant, it is a new concern and has employed some of the workers of the Hindustan Hosiery Factory. The average daily wages of thejobs vary from Rs. 6/to Rs. 10/20 per day and are adequate. The work involved in the jobs is not of highly skilled nature. The appellant further contended that the company was only of two years standing and the wages paid by it are higher than those earned by employees of other concerns in the industry. Its financial position also cannot be assessed as it is hardly two years old. The demands are excessive and the appellant cannot bear the additional burden arising out of these demands.5. The appellant has in its employment about 250 workers. The Tribunal had before it as statement (Ext.filed by the appellant showing the number of employees receiving wages below Rs. 5/per day, another statement (Ext.with regard to the other employees and also the books filed by the appellant and observed that many of theed employees got as low a wage as Rs. 4.60 per day and Rupees 2.50 per day respectively. It, therefore, held that "on the face of it the wages provided for the workmen of the factory appear to be inadequate and low and even in aconcern such wages have to be raised". The appellant started its business on 17th April, 1967. The Tribunal found from the statement, Ext.filed by the Sabha regarding its financial position that the appellant "earned substantial profits in the period of 8 months in 1967 and in 1968". The Tribunal found that during the period of 20 months since April, 1967, the appellant has earned a profit of Rs. 1,51,000/in eight months of 1967 and Rs. 1,88,000/in 1968. These profits are after deduction of depreciation, interest and bonus. The Tribunal observed that the appellant having a capital of Rs. 2,28,000/in 1967 and Rs. 3,42,000/in 1968 was prosperous and its financial position was sound. The Tribunal also observed that "the wages paid to the employees on theate are very low and require revision."6. The appellant wanted the Tribunal to follow the wage scale of William Industries submitted by the appellant as per Ext.But the Tribunal in the absence of any details with regard to the financial position of that company or its profit making capacity, did not consider it appropriate to consider that as a comparable unit. The Sabha, on the other hand, contended that the appellant was more prosperous than stretchlon Private Ltd. and produced an award of the Industrial Court in the case of Stretchlon Private Ltd., dated 10th April, 1967, published in the Maharashtra Gazette of 11th May, 1967. It appears that the demand for increase of wages in the case of Stretchlon Private Ltd., was made in 1966 within three years of its functioning fromand before the Industrial Court in that case profit and loss accounts for the years65 were made available. It further appears that in the said award the Industrial Court took note of the position of three other smaller concerns, some of which were even running at a loss and still were paying wages higher than the Stretchlon Private Ltd. The Industrial Court therefore, awarded Rs. 5/per day "as a reasonable and fair minimum wage to the Stretchlon employees of the lowest category in the Consumers Price Index bracketAlthough the Sabha in this case has asked for different rates of basic wages for employees in five categories, the Tribunal directed that the first 13 categories being the lowest paid workers should receive Rs. 5/per day in the Index bracketThe next group serial Nos. 14 to 19 were givenwere given Rs. 7/per day, serial No. 22 Rs. 7.50 per day and serial No. 23 Rs. 8.50 per day in the aforesaid bracket. The Tribunal also granted for every rise of 10 points of part thereof, above the Index bracketdearness allowance at the rate of 10 paise per day. With regard to the claim for 50% rise inthe Tribunal only granted 30% in the Index bracketand the same dearness allowances as above. The Tribunal also granted the benefits retrospectively with effect from 1st February, 1969.

Court's reasoning:
9. It is well settled that no industry can be allowed to carry on its business, if it is unable to pay the minimum wage to its employees. The industry with which we are concerned is, however, not a scheduled industry in which the State Government has fixed any minimum wage under the Minimum Wages Act. The appellant submitted from certain Gazette Notifications the minimum rates of wages prescribed by the State Government in case of some eight different industries between the years 1969 and 1972 where the monthly wages have been fixed between Rs. 90/- and Rs. 128/- per month. The appellant submits that there is no justification whatsoever for allowing the present increase of wages without following any principle and even higher than the statutory minimum wage fixed in respect of other industries in the State.From an examination of the decision of this Court, it is clear that the floor level is the bare minimum wage or subsistence wage. In fixing this wage, Industrial Tribunals will have to consider the position from the point of view of the worker; the capacity of the employer to pay such a wage being irrelevant. The fair wage also must take note of the economic reality of the situation and the minimum needs of the worker having a fair-sized family with an eye to the preservation of his efficiency as a worker.17. Wage fixation is an important subject in any social welfare programme. Wage cannot be fixed in a vacuum and has necessarily to take note of so many factors from real life a worker lives, or is reasonably expected to live or to look forward to with hope and fervency in the entire social context. It is obvious that some principles have to be evolved from the conditions and circumstances of actual life.18. Piece-rate is what is paid by results or out-turn of work which is often described as a "task". There is greater consideration to quantity in fixing piece rates in some particular types of work in some industries with a guaranteed minimum. The same standard may not be appropriate in all types of piece work. With reference to particular work the importance of man rather than the machine employed may have to be dealt with differently. Even in piece rates it will be necessary to look around to find some correlation with time rates of the same or similar class of worker, for example, the contribution of the worker to the job, the nature of the work, the part played by the machine, the incentive to work and above all protection against any creation of industrial unrest because of the existence side by side of two categories of workers, particularly if there is no possibility of transfer of labour from one type of work to the other from time to time. Again there may be some work where special skill of the worker with or without machine may be necessary and that factor will have to be then considered. It will vary from industry to industry and from one process to another. No hard and fast rule can be laid down nor is it possible or helpful. The Tribunal, in an industrial adjudication, will have to see that piece-rates do not drive workers to fatigue to the limit of exhaustion and hence will keep an eye on the time factor in work. Then again a guaranteed minimum may also have to be provided so that for no fault of a diligent worker be does not stand to lose on any account. There may be a misty penumbra which has got to be pierced through upon all available materials on record and also on what the Tribunal in fairness, can lay its hands, with notice to the parties, can lay its hands, with notice to the parties, for the purpose of fixing the piece rates balancing all aspects. We have only indicated broadly the bare outlines of approach in a matter so involved and sensitive as wage fixation particularly when no one at the present time can shut ones eye to the rising spiral of prices of essential commodities. The central figure in the adjudication, however, is the wage earner who should have a fair deal in the bargain in a real sense as far as can be without at the same time ignoring the vital interest of the industry whose viability and prosperity are also the mainstay of labour. How the various competing claims have to be balanced in a given case should mainly be the function of an impartial adjudicator in an industrial proceeding unless the legislature chooses to adopt other appropriate means and methods. Article 136 of the Constitution does not create a right of appeal in favour of any person. It confers power on the Court which should not be so exercised as to convert the Court into a Court ofof the arguments raised by the appellant should be sufficient to persuade the Court to interpose relief in its favour on the facts and circumstances of this case. It is not quite correct to say that the Industrial Court has not followed the principles of wage-revision expounded by this Court. The Industrial Court has taken into account the prevailing minimum wage rates in the region, and the capacity of the appellant to bear the burden of the increased wages. Counsel for the appellants could not show to us that the wage rates fixed by the Industrial Court are unfair for the appellant or that it cannot bear the load of increased wages. The wages of the piece-rated workmen had to be increased in line with the increased wages of the time-rated workmen with the object of avoiding discrimination and heart-burning among workers and maintenance of industrial peace among them. Taking a comprehensive view of the facts and circumstances of the case, we are satisfied that no intervention is called for with the award.