Case: Muir Mills Co. Ltd., Kanpur Vs. Its Workmen

2. By an order dated April 25, 1955, the Government amended this issue by substituting therefore the following:3. It will be noticed that the issue as re-framed by the amendment indicated the manner in which the reduction in the wages of these workmen had been alleged to be made, viz., "discontinuing the payment of production and/of special bonus". To understand how the question of such a reduction arose and also the considerations which arise in deciding the question whether the reduction, if any, was wrongful and/or unjustifiable a few facts need to be mentioned: The appellant company is a textile mill employing in its Carding Department workmen known as Inter Tenters. Roving Tenters, Draw Frame Teneters and Slubbers. All these workmen are paid wages on piece rate basis. Before 1948 the rates in force per hank were -2/3/- for the Inter Tenters, -/2/3/- for the Slubbers and Draw Frame Tenters and -/2/5/- for the Roving Tenters. In addition to this these workmen were entitled to receive further emoluments if there production exceeded a certain norm. The rates for these further emoluments then in force were two annas per rupee of basic earnings of Rs. 15 to Rs. 25 per month and three annas per rupee for basic earnings above Rs. 25 per month. Apart from these emoluments payment was also made at 9 pies per hank if the production on any day was 7 hanks or more. Though both these additional emoluments were related to production the Tribunals below have described the first kind as production bonus and it will be convenient to adhere to that description here4. These two kinds of additional payments which the workmen would receive only if there production would reach and surpass certain standards had the result of increasing the total emoluments received by some of the workmen much above what they would be getting under the fixed rate per hank. The right to receive these additional emoluments had become a part of the terms of service of these workmen. With effect from 1-12-1948, however the appellant-company stopped the system of paying such additional employments but instead raised the fixed rate per hank to -/3/9/- for Inter Tenters, -/3/6/- for Slubbers and Draw Frame Tenters and -/4/9/-for Roving Tenters. This was done immediately after an order had been made by the Government under the provisions of S. 3 of the U. P. Industrial Disputes Act, 1947, laying down the standards of basic wages and dearness allowance for different industries in the Province.. Clause 2 of this order fixed the minimum basic wage for cotton and woolen textile industries in Kanpur and certain other areas at Rs. 30 per month. Clause 3 provided for payment of dear food allowance. Clause 5 provided that persons who are already employed on 30-11-1948, in any industrial textile concern shall receive wages at the increased rates mentioned therein. Clause 7 provided that "every employee of an industrial concern or undertaking to which this order applies, shall be paid wages including dear food allowance in accordance with the provisions of cls. (2), (3), (5) and (6)." There is a proviso to the clause which says that where the consolidated wage payable to an employee who was on the payroll of the concern or undertaking on November 30, 1948, is more than the consolidated wage payable in accordance with the provisions of the said clauses, the difference shall be paid to him as personal wage. Clause 8 defines "basic wages" as "consolidated wages payable to an employee on 30-11-1948, minus Dear Food allowance calculated according to the rates prevalent in the concern on the said date."6. The Appellate Tribunal thought it unnecessary to consider the question whether these bonuses had been actually taken into consideration while fixing new piece rates, being of opinion that if the Government order did not require or justify the employers including these bonuses in the calculation of the new rates the company would be bound in law to restore these bonuses even if they had actually taken them into consideration. It held that the Government order did not require or justify the employer including these bonuses in the calculation of the rates of wages for the purposes of the Government order. In the result the appellate tribunal agreed with the first tribunals decision that this system of granting production and incentive bonuses must be restored. In view of the fact however that for a long time after 1-12-1948, the workmen did not raise this question the appellate tribunal was of opinion that the restoration should be only with effect from 1-2-1954. As regards the rates at which these bonuses had to be calculated they also modified the directions given by the Tribunal.

Court's reasoning:
9. At first sight, this does seem to give a basis for an argument that the parties agreed before the Tribunal to treat the matter as a question of fact only and that the workmen did not want to raise any question that under the Government order these bonuses could not be included in the calculation of the rates. It is unnecessary however for us to examine the effect of such concession in view of what transpired before the appellate tribunal. From the judgment of that Tribunal we find that on behalf of the workmen it was stated that they had not conceded any such position in the lower tribunal and that their contention was that such bonuses had not and could not be taken into consideration. It is also clear from the judgment that in view of this the parties argued their appeal before the appellate tribunal on both these contentions, viz., whether the Government order in question allowed the employers to include the bonuses in question in the calculation of the new rates of basic wages in the case of the piece-rate workers like those concerned in this and if so, whether the employers have in fact taken these bonuses into account. It is clear that the contention that in view of the concession made on 27-8-1955, it was not open to the appellate tribunal to go into the question whether the Government order required or authorised the employers including the bonuses in the calculation of the new rates was abandoned before the tribunal below. When it was pointed out to Mr. Pathak that in view of this he should not be allowed to raise this contention Mr. Pathak fairly abandoned this contention here also7. It was faintly argued by Mr. Pathak that the fact that the workmen did not for a number of years raise any objection to the stoppage of the old system of production bonus and incentive bonus shows that they themselves understood the Government order to mean that these bonuses would be included in fixing the basic wages for the purpose of the order. Whether that was so or not it is unnecessary for us to consider, for when the only reasonable interpretation of the words used in the order is that these are not to be included, it matters little how, the employer or the workmen understood these words to mean18.We have therefore come to the conclusion that the Labour Appellate Tribunal was right in holding that the Government order did not require or justify the employer including the production and incentive bonuses in the calculation of the rates of the basic wage of the workers and consequently that the Government order did not have the effect of absolving the company from the duty of continuing to pay the production and incentive bonuses to workmen as before.