Case: Kamani Metals &amp; Alloys Ltd Vs. Their Workmen

The Company is the appellant before us. The reference was occasioned by a demand raised by the Union on February 25, 1960 in relation to wage scales and classifications, dearness allowance, production bonus, permanency for daily-rated workmen and grades and scales of pay, dearness allowance and abolition of marriage-clause for monthly paid employees. At first a reference was made to a Conciliation Board by the Government on September 8, 1962. The conciliation was frustrated for some reasons and on December 14, 1962, the Bombay Government acting under S. 10 (1) (d) ofthe Industrial Disputes Act, 1947 referred the dispute to the Tribunal for adjudication. By the Award now under appeal, some points were decided in favour of the Company and some others in favour of the workmen. The workmen have not appealed and the Company has also confined this appeal to some of the points decided against it.

Court's reasoning:
5. In dealing with these contentions we shall begin by considering one contention which, if accepted, will cut at the very root of the case for revision of wages. It has, however, no merit. The submission is that there is no change of circumstances justifying a revision of wages and pay scales or dearness allowance. It can hardly be maintained that wages fixed as far back do not need revision, when, as everyone knows, commodity prices have soared high, the general level of wages has gone up and in some industries there have been two or three revisions already and in some others. Wage Boards have been appointed to revise or fix wages. We can take judicial notice of these facts. In this Company no revision has taken place and the demand is, therefore, notis not a proper approach. The observations no doubt lay down the principal guide lines but they are not intended to operate with the rigidity of a statutory enactment. The Court has indicated what lines of inquiry are likely to lead to the discovery of correct data for the fixation of fair wages in the sense explained above. In this task all the relevant considerations must enter but fruitless inquiries into matters of no particular importance to a case are hardly to be insisted upon because rather than prove of assistance, they might well frustrate the very object in view. Each case requires to be considered on its own facts. In the case before us, all relevant circumstances have, in our opinion, entered the determination, and it has not been shown to us that any other circumstance could or should have been considered.The next part of the inquiry involved the application of the principle of industry-cum-region. This principle is that fixation or revision of scales of wages, pays or dearness allowance must not be out of tune with the wages, etc., prevalent in the industry or the region. This is always desirable so that unfair competition may not result between an establishment and another and diversity in wages in the region may not lead to industrial unrest. In attempting to compare one unit with another care must be taken that units differently placed or circumstanced are not considered as guides, without making adequate allowance for the differences. The same is true when the regional level of wages are considered and compared. In general words, comparable units may be compared but not units which are dissimilar. While disparity in wages in industrial concerns similarly placed leads to discontent, attempting to level up wages without making sufficient allowances for difference, leads toare, of course, not expected to go into the matter over again in the appeal. An appeal against an award brought by special leave is not an appeal as of right. It is not intended to be appeal on every ground of fact and of law unless this Court considers it fit to examine the matter from any special angle. Before a party can claim redress, it must show that the award is defective by reason of an excess of jurisdiction or of a substantial error in applying the low or some settled principle or of some gross and palpable error occasioning substantial injustice. An industrial adjudication by reason that it is an award cannot be assailed because some other person would have given different award or that elaborate reasons have not been given. We have considered the comparative charts carefully and on the whole, we are satisfied that the scales of wages as fixed by this Award when compared with those existing in Indian Smelting, when they are high, are not so high as to merit special comment or interference. Sometimes they are lower. It remains, however, to consider the case from the angle of the scales of wages existing in Kamani Engineering Corporation.14. In dealing with the scales of pay in comparison with those existing in Kamani Engineering Corporation the Tribunal observed that higher wages were being fixed in the Kamani Metals and Alloys because the yield from incentive bonus in the Kamani Engineering Corporation was between 20 to 30 per cent of the wages and the dearness allowance whereas in this Company it was abnormally low. Mr. Gokhale contended that the yield from incentive bonus is an irrelevant factor to take into account and observed that if persons could get higher wages by not earning incentive bonus, the result might be a disincentive to work at all. Speaking generally, his objection is right to certain extent. But it is not right in the circumstances of this case. The company has since 1949 introduced a scheme of wage incentive. There is no straight piece-rate system under which the worker is paid a fixed amount for each unit of out-put. There is a fixation of average production for a whole group and not for the individual worker. The target in the melting section is fixed at 5000 cwt. And 1.5 per cent on every additional 300 cwt. is fixed as bonus. Other sections have different targets and different percentages. A similar scheme also exists in the Kamani Engineering Corporation. What has happened is that Tribunal in fixing scales of wages in the reference from Kamani Engineering fixed lower rates because it was of the opinion that quite a substantial sum was earned in that establishment by way of incentive bonus. When the Tribunal came to decide the present reference it recalled that lower wages were fixed in the Kamani Engineering Corporation case because of the yield from incentive bonus. It, therefore ascertained the yield in the Kamani Metals and Alloys and finding it low fixed the wages at the proper level unaffected by considerations of incentive bonus. This really means that proper wages were fixed in the Kamani Metals and Alloys without being influenced in any way by the yield from incentive bonus although in the wage of Kamani Engineering Corporation lower wages were fixed because the yield from incentive bonus was very high. In these circumstances, we are of the opinion that the wages in the present case have not really been influenced by considerations of yield from incentive bonus whatever may be said of Kamani Engineeringobjection has no force. In the charter of demands the workmen had claimed retrospective revision from July 1, 1951. The matter was referred to the Board of Conciliation on September 8, 1962. When conciliation was frustrated because of the arrest of some of the workers of the Union under the Defence of India Rules, the present reference was made to the Tribunal. The Tribunal could have easily chosen September 8, l962 but chose an intermediate date to be fair to both sides. In our judgment, the choice of October 1, 1962 by the Tribunal cannot be characterised as either illegal or unfair. The question of incentive bonus revision was not mooted before us and the direction that incentive bonus should be calculated on the new scale from 1st January 1964 is more in favour of the employers than the workmen and no grievance can be made about it.17. This brings us to the question of the monthly-rated workers. Most of the points which we have discussed in relation to the daily-rated workmen are common. We have seen the scales which have been fixed and compared them with the rates obtaining in Indian Smelting and the Kamani Engineering and other concerns and are satisfied that they have not been put so high as to merit interference at ouris true, that the Tribunal has not only fixed the new scales for those categories of monthly-paid employees who were named in the Order of Reference but has also provided that those scales shall apply to clerks in the A. B. C and D Grades. It is, however, clear that even the monthly-paid employees mentioned by name belong to one category or anther in the Grades A to D. It would have been highly invidious if some persons in the Grades were to receive more pay than the others in the same Grade. The Award, therefore, treats the Reference as referring to the 4 Grades although only some of the class who go by special designations in each Grade have been mentioned. the intention, however, was to have a general revision of the scales of payment to all workers paid monthly and the Tribunal was, therefore, right in not reading the Reference as restricted to only a few classes. By doing so the Tribunal has avoided further industrial unrest and disputes and has really given effect to the underlying object of theappears that the case of Kamani Engineering was treated as a special case because the incentive bonus there was yielding a third of the total earnings of the workmen and it was considered that if the dearness allowance was also raised then a very great burden would be thrown upon the employer by reason of the incentive bonus. We cannot, therefore, use the precedent of the award in the Kamani Engineering Corporation because of these special facts. We are satisfied that in many other companies dearness allowance has been ordered to be calculated in the same manner as has been done by this Award and we see no reason, therefore, toare the fundamental principles which have to be borne in mind. The first, however, is a general inquiry into the structure of wages which it may not be necessary to examine elaborately each time because that inquiry is generally made independently of individual cases. The data is usually compiled by labour conferences and experts. The other two matters, of course, require attention.These principles have been stated in more than one case of this Court. The Company, however, relies upon Novex Dry Cleaners v. Its WorkmenLab LJ 271 (SC). The principles laid down in that case have been accurately summarized in thet in fixing a fair wage the capacity of the industry to bear the burden of the said wage scale is a very relevant and very important factor. Before comparing the establishment in question with other establishments engaged in the same trade in the region, it would be obviously necessary for the industrial tribunal to compare the establishment in respect of their standing the extent of the labour force employed by them the extent of their respective customers and what is more important, a comparative study should be made of the profits and losses incurred by them for some years before the date of the award. It is well known that in fixing the wage structure on a fair basis, an attempt is generally made in assessing the additional liability imposed on the employer by the new wage structure and trying to anticipate whether the employer would be able to meet it for a reasonably long period in future.Where the award simply fixed the wage scales on the assumption that the establishment in question was comparable to the other two establishments in the same region without considering the aspects mentioned above, it must be set aside. In the consequence, the industrial tribunal was directed to reconsider the question of fixation of wage scales in the light of the principles mentioned supra.* * * * *The Company has a capital of Rs. 40,00,000. Its sales in62 increased from Rs. 1,81,18,873 to Rs. 2,31,50,485 and its profits inwere of the order of Rs. 28 lakhs, excluding Rs. 5 1/2 lakhs for depreciation and Rs.2 lakhs for managing agency commission. The burden of the increased wage bill will not be more than 1/10th of its net profits, to say nothing of some other savings by way of reduction ofThe tribunal held that the burden could be borne and we agree. One part of the inquiry, namely, the capacity to pay the increased wage bill wasdealing, therefore, with only one comparable concern it was open to take into consideration the conditions existing in engineering concerns, particularly those in Kamani Engineering Corporation, which belongs to the same group and there is thus affinity between them.13. We were taken through the comparative charts showing the scales of the wages in these concerns and pointed out the differences particularly those operating to the disadvantage of the appellant Company. That some differences are bound to be there because of many imponderables that go into the fixation of wages, goes without saying. Weare, of course, not expected to go into the matter over again in the appeal. An appeal against an award brought by special leave is not an appeal as of right. It is not intended to be appeal on every ground of fact and of law unless this Court considers it fit to examine the matter from any special angle. Before a party can claim redress, it must show that the award is defective by reason of an excess of jurisdiction or of a substantial error in applying the low or some settled principle or of some gross and palpable error occasioning substantial injustice. An industrial adjudication by reason that it is an award cannot be assailed because some other person would have given different award or that elaborate reasons have not been given. We have considered the comparative charts carefully and on the whole, we are satisfied that the scales of wages as fixed by this Award when compared with those existing in Indian Smelting, when they are high, are not so high as to merit special comment or interference. Sometimes they are lower. It remains, however, to consider the case from the angle of the scales of wages existing in Kamani Engineering Corporation.