Case: Messrs. Crown Aluminium Works Vs. Their Workmen

2. It appears that in 1947 the first Omnibus Engineering Tribunal was constituted to adjudicate upon the industrial disputes for the engineering industry in West Bengal and the matters referred to the tribunal includedinter aliadisputes in regard to basic wages, dearness allowance and leave. This tribunal gave a comprehensive award which was published on June 30, 1948. The appellant was a party to these adjudication proceedings and was governed by the said award. Soon thereafter industrial disputes again arose between the engineering industry and its employees and these were referred to another tribunal which in due course examined the disputes and pronounced its award. This award was published on September 21, 1950. By this award the dearness allowance fixed by the first tribunal was increased on the ground of rise in the cost of living index and the leave rules prescribed by the earlier award were modified in the light of the provisions of the Indian Factories Act, 1948. After the first award had come into force the appellant revised its facility bonus from time to time with the object of keeping pace with the rise in the cost of living index. The result was that several components which constituted the wages structure paid by the appellant to its workmen left no cause for grievance to the workmen. So they did not raise any dispute for increase in their dearness allowance and the appellant and its workmen were not parties to the second arbitration proceedings. Meanwhile, a minor industrial dispute arose between the appellant and its workmen and it was referred to the arbitration of Shri G. Palit by the Government of West Bengal by their order dated November 24, 1950. One of the points referred to the tribunal was in regard to the amount of increment which should be granted to workers in 1950 and the date from which it should be so granted. The appellant denied its liability to pay the increment on the ground that there was no wage structure which permitted such a claim. The appellant also urged before Shri Palit that its workers were on the whole handsomely remunerated. In this connection reliance was placed by the appellant on the payments made by the appellant to its workmen by way of special allowance and bonus, besides dearness allowance and standard wages. It would thus appear that the appellant resisted the claim of its workmen for the increment in wages on the ground that in the wage structure of the appellant additional components had been introduced which made ample provision for the rise in the cost of living, Shri Palit was, however, not impressed with this plea. He thought that by introducing these components in the wage structure the Managing Director "chose to hold the key in his own hands so that he can manipulate the quantum of benefit under this head and could adjust it to the output in the factory." Shri Palit, therefore, granted the workmens demands by allowing one anna per day increment though he frankly confessed that this was not based on any actual calculation. He accordingly directed the appellant to pay the arrears within one month of the award coming into operation to all workmen who were in the roll of the appellant at the end of 1950. Then Shri Palit addressed a word of caution to the appellant and said that it was necessary that the appellant should fix a wage structure as soon as practicable to secure durable peace in the factory. "It will be prudent", observed Shri Palit in his award, "for the company to have a hide bound wage structure instead of having so many flexible component parts of the wage which merely will create unrest." This in brief is the previous history of the dispute between the appellant and its workmen.3. On March 28, 1952, the appellant issued a notice to its workmen proposing to make certain modifications. The notice indicated that a reduction of the factory hours from 47 to 40 would be made, the facility bonus would be reduced by 3 as, per day and temporary dearness allowance for the salaried workers would be similarly reduced by 10% of the then current rates. The appellant pleaded in this notice that these economy measures had become necessary owing to the financialof the appellant and would come into effect on June 1, 1952. Thethese changes. A joint discussion was then arranged on June 2 and June 26, 1952. It appears that further economy measures were introduced for discussion between the parties by the notice dated May 30, 1952. These further economy measures related to the reduction of the facility bonus by a further amount of 6as. per day, withdrawal of two hours concession of special bonus and discharge of workers of the rolling mills department. The Union did not agree to any of these measures except the reduction of working hourse from 47 to 42 1/2 hours a week. Since joint consultations did not lead to any agreement, the appellant, by its notice dated June 27, 1952, intimated to the workers that the reduction of working hours and in the facility bonus and dearness allowance as notified on March 28, 1952, would be brought into operation from1st June 1952. The workers were also told that the two hours concession would be withdrawn from 1st July 1952, and the workers in the rolling mills departments would be discharged with effect from 1st August 1952. The workmen resisted these proposals and took the industrial dispute arising therefrom to the Labour Commissioner immediately. Thereafter a joint conference of the appellant and its workmen was held on 4th July 1952. The intervention of the Labour Commissioner was not effective as the proposals made by him to resolve the dispute between the parties amicably were not acceptable to the parties. The appellant thereupon discharges the workmen of the rolling mills department, 52 in number, with 14 days notice pay and retrenched other 227 workers of various categories as from 26th July 1952, with a similar notice pay. The Government of West Bengal found that conciliation was not possible and so the industrial dispute in question was referred to the Sixth Industrial Tribunal for adjudication.

Court's reasoning:
e question posed before us by Mr. Sen is : Can the wage structure fixed in a given industry be never revised to the prejudice of itsworkmen? Considered as a general question in the abstract it must be answered in favour of Mr. Sen.We do not think it would be correct to say that in no conceivable circumstances can the wage structure be revised to the prejudice of workmen. When we make this observation, we must add that even theoretically no wage structure can or should be revised to the prejudice of workmen if the structure in question falls in the category of the bare subsistence or the minimum wage. If the wage structure in question falls in a higher category then it would be open to the employer to claim its revision even to the prejudice of the workmen provided a case for such revision is made out on the merits to the satisfaction of the tribunal. In dealing with a claim for such revision, the tribunal may have to consider, as in the present case whether the employers financial difficulties could not be ad equately met by retrenchment in personnel already effected by the employer and sanctioned by the tribunal. The tribunal may also enquire whether the financial difficulties facing the employer are likely to be a short duration or are going to face the employer for a fairly long time. It is not necessary, and would indeed be very difficult, to state exhaustively all consideration which may be relevant in a given case. It would, however, be enough to observe that, after considering all the relevant facts, if the tribunal is satisfied that a case for reduction in the wage structure has been established then it would be open to the tribunal to accede to the request of the employer to make appropriate reduction in the wage structure, subject to such conditions as to time or otherwise that the tribunal may deem fit or expedient to impose. The tribunal must also keep in mind some important practical considerations. Substantial reduction in the wage structure is likely to lead to discontent among workmen and may result in disharmony between the employer and his employees; and that would never be for the benefit of the industry as a whole. On the other hand, in assessing the value or importance of possible discontent amongst workmen resulting from the reduction of vages, industrial tribunals will also have to take into account the fact that if any industry is burdened with a wage structure beyond its financial capacity, its very existence may be in jeopardy and that would ultimately lead to unemployment. It is thus clear that in all such cases all relevant considerations have to be carefully weighed and an attempt has to be made in each case to reach a conclusion which would be reasonable on the merits and would be fair and just to both the parties.It would be interesting to notice in this connection that all the tribunals that have dealt with the present dispute have consistently directed that existing wages should not be reduced to the prejudice of the workmen. In other words, though each tribunal attempted to constitute a wage structure in the light of materials furnished to it, a saving clause has been added every time protecting the interests of such workmen as were drawing higher wages before. Even so, it would not be right to hold that there is a rigid and inexorable convention that the wage structure once fixed by industrial tribunals can never be changed to the prejudice of workmen. In our opinion, therefore, the point raised by Mr. Sen must be answered in his favour subject to such relevant considerations and limitations as we have briefly indicated.12. Mr. Sen is, however, not right in contending that the final decision of the appellate tribunal is based solely or even chiefly on the alleged convention to which the appellate tribunal has referred. As we have already pointed out, the tribunal has also found that substantial retrenchment which has been sanctioned by both the tribunals would improve the financial position of the appellant. In the opinion of the appellate tribunal, the downward tendency in the cost of living index on which the appellant partly relied could not be considered in the present proceedings since no specific issue had been referred to the tribunal in that behalf. Besides, enough material had not been produced to show to what extent the cost of living index has fallen and whether this fall was temporary or had come to stay. The appellate tribunal, it appears, thought that the wages paid by the appellant to its workmen "are the irreducible minimum or may at best be in the region of fair wages with a small margin over the minimum wage".If in, reaching its final conclusions, the appellate tribunal has relied not only upon the alleged convention but also upon the other circumstances just mentioned it would not be fair to say that its conclusion is vitiated in law or is otherwise unsound. Normally, this Court would be slow to entertain an objection that some of the considerations which have weighted with the appellate tribunal in reaching its final decision are either invalid or are not borne out by sufficient evidence onus then consider the genesis of these payments. Prior to the new Factories Act, the appellants workmen worked on an average for 59 hours of work made up of the usual 54 hours of work and overtime. After the Factories Act came into force, the working hours had to be reduced but in order to compensate theworkers for reduction in their wages, the management added to the daily earnings of such workers the wages for two hours. The additional two hours wages thus awarded to the workers came to be known as to hours concession or special bonus. This bonus was introduced in August 1946. In April 1945, facility bonus had been introduced at 3 annas per day for workers getting basic wages equal to or less than 10 annas per day and 4 annas per day for workers whose basic wages were over 10 annas per day. It appears that this facility bonus was revised from time to time in the upward direction, and it used to be paid prior to June 1952 as a graduated scale linked to the basic wages in slabs varying from 6 annas to 12 annas per day. Besides, the appellant introduced food concession to workers employed prior to 1951. Thus the constitution of the wage structure in the appellants concern included dearness allowance, facility bonus and food concession. In dealing with the true nature of these payments it is necessary to take into account the appellants case as deposed to by the appellants Labour Officer and Assistant to the Manager, Shri Jaisuklal Shah. According to Shri Shah, the facility bonus was an additional allowance for the high cost of living very much on the same footing as dearness allowance. "Two hours allowance", said Shri Shah, "is referred to as special bonus or extra bonus. It was paidbecause the workers demandedand it was possible to pay it at that time". These statements lend considerable support to the workmens case that the payments in question constituted a part of the wage structure of the appellant. Indeed, even in the statement of the appellant before the industrial tribunal in the present proceedings, it is specifically averred in paragraph 2 that prior to June, 1952, the companys pay structure consisted of five items, viz., (1) basic wage, (2) dearness allowance, (3) special bonus or extra bonus (4) facility bonus or special allowance, and (5) food concession. The attitude adopted by the appellant before Shri Palit is also consistent with this pleading and with the evidence given by Shri Shah in the present proceedings. Before Shri Palit, the appellant had urged that there was no occasion to grant increment to its workmen because under the categories of several allowances the company had substantially constituted its wage structure to the benefit of the workmen. In this connection, it would also be material to point out that it was because these additional payments were made by the appellant to its workmen that the workmen did not raise any dispute and did not join the arbitration before the Second Engineering Tribunal.Besides, these payments have been made for some years and that also is a relevant factor to consider in dealing with the true character of these payments. If the Labour Appellate Tribunal took into account all these facts and held that the payments in question are not matters of bounty but that, in essence and in substance, they form part of the basic wage and dearness allowance payable to the workmen, we see no reason to interfere with its conclusion.It is not disputed before us that if this conclusion is right, the Labour Appellate Tribunal has properly revised the wage structure as constituted by the original tribunal and included the payments in question in appropriatewe have held that the modifications made by the appellate tribunal in favour of the existing workmen cannot be successfully challenged by the appellant, we do not think it necessary to consider whether wage structure which has been fixed by the appellate tribunal in regard to new entrants into the service of the appellant is justified or not.