Case: Workmen Represented By Secretary Vs. Management Of Reptakos Brett.And Co. Ltd. And Anr

2. The Reptakos Brett and Co. Ltd. (hereinafter called the `Company) is engaged in the manufacture of pharmaceutical and dietetic speciality products and is having three units, two at Bombay and one at Madras. The Madras factory, with which we are concerned, was set-up in the year 1959. The Company on its own provided slab system of Dearness Allowance (DA) which means the DA paid to the workmen was linked to cost of living index as well as the basic wage. The said double-linked DA Scheme was included in various settlements between the Company and the workmen and remained operative for about thirty years. The question for our consideration is whether the Company is entitled to re-structure the DA Scheme by abolishing the slab system and substituting the same by the Scheme prejudicial to the workmen on the ground that the slab system has resulted in over-neutralisation thereby landing the workmen in the high-wage island.3. The first settlement between the Company and the workmen was entered into on August 11, 1964. While accepting the double-linked DA it further provided variable DA limited to the cost of living index upto 5.41-5.50. Further relief was given to the workmen in the settlement dated July 18, 1969 when the limit on the variable DA was removed. The Company revised the rates of DA on August 7, 1971. Thereafter, two more settlements were entered into on July 4, 1974, and January 4, 1979, respectively. Slab system with variable DA continued to be the basic constituent of the wage-structure in the Company from its inception.4. The position which emerges is that in the year 1959 the Company on its own introduced slab system of DA. In 1964 in addition, variable DA to the limited extent was introduced but the said limit was removed in the 1969 settlement. The said DA scheme was reiterated in the 1979 settlement. It is thus obvious that the slab system of DA introduced by the Company in the year 1959 and its progressive modifications by various settlements over a period of almost thirty years, has been consciously accepted by the parties and it has become a basic feature of the wage structure in the Company.5. The workmen raised several demands in the year 1983 which were referred for adjudication to the Industrial Tribunal, Madras. The Company in turn made counter demands which were also referred to the said Tribunal. One of the issues before the Tribunal was as under :-``Whether the demand of the Management for restructuring of the dearness allowance scheme is justified, if so, to frame a scheme ?The Tribunal decided the above issue in favour of the Company and by its award dated October 14, 1987 abolished the existing slab system of DA and directed that in future dearness allowance in the Company, be linked only to the cost of living index at 33 paise per point over 100 points of the Madras City Cost of Living Index 1936 base. The Tribunal disposed of the two References by a common award. The Company as well as the workmen filed separate writ petitions before the Madras High Court challenging the award of the Tribunal. While the two writ petitions were pending the parties filed a joint memorandum dated June 13, 1988, before the High Court in the following terms:``In view of the settlement dated 13.5.1988 entered into between the parties, a copy of which is enclosed, both the parties are not pressing their respective writ petitions except with regard to the issue relating to restructuring of dearness allowance.6. The learned Single Judge of the High Court upheld the findings of the Tribunal on the sole surviving issue and dismissed the writ petition of the workmen. The writ appeal filed by the workmen was also dismissed by the High Court by its judgment dated September 14, 1989. The present appeal by special leave is against the award of the Tribunal as upheld by the High Court.

Court's reasoning:
24. We are of the view that it would not be safe to accept the findings of the Appellate Tribunal in Buckingham case as the basis for fixing the wage structure to the prejudice of the workmen. This Court in Standard Vacuum case (supra) has further held that in Bombay the minimum wage in the year 1940 was Rs. 50 to Rs. 55/-. On that finding it is not possible to accept that the minimum wage in the year 1936 in Madras region was Rs. 26/28. So far as the Good Pastor Press case is concerned the question of determining the minimum wage in pre-war 1936 was not before the Appellate Tribunal. It only mentioned the fact that Rs. 26/- was held to be so by some of the subordinate tribunals. There was no discussion at all on this point. The tribunals reliance on this case was wholly misplaced.25. In any case we are of the opinion that purchasing power of todays wage cannot be judged by making calculations which are solely based on 30/40 years old wage structure. The only reasonable way to determine the category of wage structure is to evaluate each component of the category concerned in the light of the prevailing prices. There has been sky-rocking rise in the prices and the inflation chart is going up so fast that the only way to do justice to the labour is to determine the money value of various components of the minimum wage in the context of today.We agree with Mr. Ramamurthy that the DA scheme - which had stood the test of time for almost thirty years and had been approved by various settlements between the parties - has been unjustifiably abolished by the Courts below and as such the award of the Tribunal and the High Court Judgments are unsustainable.From the above finding it was sought to be shown that the Company has proved to the satisfaction of the Tribunal that financially it was not in a position to bear the burden of the existing DA scheme. We do not agree with the learned counsel. The Tribunal gave the above finding in the reference made on behalf of the workmen asking for bonus increase and various other monetary benefits. While rejecting the demands of the workmen the Tribunal gave the above finding which related to the additional burden accruing in the event of acceptance of the workers demands. The Tribunal nowhere considered the financial position of the company vis-a-vis the existing DA scheme. The Company neither pleaded nor argued before the Tribunal that its financial position had so much deteriorated that it was not possible for it to bear the burden of the slab system of DA. The Tribunal has not dealt with this aspect of the matter while considering the demand of the Company for restructuring the DA scheme.Mr. Nariman reminded us of the limits on our jurisdiction under Article 136 of the Constitution of India and relying upon Shaw Wallace and Co. Ltd. v. Workmen, (1978)2 SCC 45 and The Statesman Ltd. v. Workmen, (1976)3 SCR 228 contended that so long as there is ``some basis, some material to validate the award the ``jurisdiction under Article 136 stands repelled. The Tribunal and the High Court, in this case, has acted in total oblivion of the legal position as propounded by this Court in various judgments referred to by us. Manifest injustice has been caused to the workmen by the award under appeal. We see no force in the contention of the learned counsel.36. In view of the above discussion we are of the view that the Tribunal was not justified in abolishing the slab system of DA which was operating in the Company for almost thirty years.