Case: Pfizer (P) Ltd. Bombay Vs. The Workmen

2. The appellant is a Company incorporated under the Indian Companies Act,1913. It has its registered office at Bombay and it runs a factory in which it manufactures life saving drugs, such as antibiotics and antitubercular drugs, and vitamin products. The appellants factory was working a multiplicity of shifts with different times. It, however, found that this working did not fully utilise the machinery installed in the factory. The utilisation of the raw product received by the appellants factory in Bombay from its factory at Chandigarh was also not satisfactory and as a result of inadequate production, the appellant was not able to meet adequately the demand for its products from the market. That is why the appellant came to the conclusion that there was need to introduce three shifts in order to have extensive production of better quality products. The appellant felt that if it was able to produce its products on a much large scale, it would be able to undertake export of the said products, and in any event, larger production would enable the appellant to meet its competitors in the trade. Besides, the preparation of the well-known antitubercular drug Para Amino Salicylic Acid (P.A.S.) which the appellant had developed in its research laboratory after carrying out laboratory and pilot plant experiments in 1960-61, needed the working of the relevant section on a three-shift basis because its production was a continuous process and as a result of the investigation made by its expert, the appellant came to the conclusion that the quality of the product would be very much improved if the section working in the production of the said drug was to work continuously. That was an additional reason why the appellant wanted to introduce 3 shifts in its factory. It thought that if the chemical and pharmaceutical departments were to work in three shifts the other subsidiary sections would also have to work in three shifts in order to cope with the production. That, in brief, is the basis on which the appellant wanted to introduce three shifts in its factory; and so, it gave notice of change to the respondents, and after the conciliation efforts failed, it moved the Maharashtra Government to refer these disputes to the Industrial Tribunal for its adjudication.3. The demand for three shifts was stoutly resisted by the respondents. They urged that for several years past, in the appellants factory the respondents have received the benefit of 5-days week and that has now become a term of their employment: the introduction of three shifts would inevitably convert the 5- days week into a 6-days week; and that would he a retrograde step highly prejudicial to the interests of the employees. They conceded that in case the needs of the factory required, they would be willing to work on two Saturdays every month, provided they were paid proper over-time wages for that work; but they disputed the appellants claim that there was a case for introducing such a drastic change as three shifts. Besides, the respondents contended that the inevitable consequence of the three shifts would be addition to the work-load of the respondents, and according to them, the proposal made by the appellant in that behalf was a complete departure from the pattern prevailing in the pharmaceutical industry in the region. The respondents also disputed the appellants claim that the production of P.A.S. was a continuous process. They were, however, prepared to agree that all the manufacturing departments should be run on a two shift basis, avoiding the third shift altogether with suitable adjustments in time.4. The Tribunal considered the documentary and oral evidence adduced by the parties before it in support of their respective contentions and held that the appellant had not made out a case for the introduction of three shifts. It found that the effect of the documentary evidence produced was to show that the pharmaceutical factories in Greater Bombay worked one and in some cases, two shifts, though in a few cases, there were three shifts only in the section manufacturing chemicals and not pharmaceuticals. It agreed that the departments like Watch and Ward and maintenance were, in some companies, working three shifts, but that was so even in the appellants factory. The Tribunal also held that the working arrangement which would result from the introduction of three shifts would not only be inconvenient to the bulk of the employees, but would involve the abolition of the 5-days week system, and it thought that, on principle, compelling the employees to work at night would be prejudicial to their interests and may not even help the production of better quality product. In regard to the appellants claim that the production of P. A. S. involved a continuous process, the Tribunal observed that the evidence produced by the appellant did not show that in the present state of manufacture by it of P. A. S. it would be convenient to have three shifts so that the product can be produced according to specifications without too many rejections. In fact, the Tribunal was not satisfied that the production of this drug required continuous working in 3 shifts. On these findings, the Tribunal rejected the appellants case for the introduction of 3 shifts. In rejecting this claim, the Tribunal observed that in order to give some relief to the appellant and to enable it to produce its product in larger quantity, it was reducing the number of holidays; and that being so, there was hardly any case for increasing the working hours.5. It, however, appears that while the dispute was pending before the Tribunal, an interim arrangement was allowed by it in regard to three shifts in the P. A. S. department. Under this arrangement, the appellant was authorised to introduce a third shift in that department and rotate up to two employees now engaged in the other shifts in the night shift. In its award, the Tribunal has ordered that this interim arrangement should continue for a year after the award becomes enforceable and then the question may be considered. It has also ordered that the two workers who will work in the night shift by rotation should be paid @10% over their basic wages and dearness allowance for the days on which they are required to work in the third shift.6. Then as to the holidays, the Tribunal took the view that the number of holidays under the Negotiable Instruments Act which the appellant was allowing to its employees was unreasonably high. It compared holidays allowed by other concerns and came to the conclusion that 10 days holidays in a year would he reasonable and just. In the result, the appellants claim for reduction of holidays succeeded, while its claim in regard to the introduction of 3 shifts failed.7. Before dealing with the points raised by the parties in these appeals it would be convenient to indicate the present working arrangements in the factory of the appellant and the changes which would be introduced in the said working arrangements if three shifts are allowed. The factory of the appellant employs 821 workmen, 235 of whom are girl employees; and since S. 66 (1) (b) of the Factories Act prohibits the employment of women in any factory, except between the hours of 6 A.M. and 7 P.M., the problem posed by the proposal to introduce three shifts involves the rotation in the 3 shifts only of male workmen and that is a factor which has to be borne in mind in dealing with the present dispute.8. The statement filed by the appellant (Ext. C-l) shows that there are four departments in the appellants factory. The first department which works 6-days week on a three shift basis deals with P. A. S. Watch and Ward, Maintenance and Hydrazine. Each of the three shifts is spread over 8 hours; there is a lunch break for half an hour and there are two tea breaks of ten minutes each. These breaks are common in all the departments of the factory. The actual working time in the first department is 7 hrs. 10mts. per day which means 43 hrs. per week. The total number of employees in this department is 125. The P. A. S. section of this department, for instance, works in 3 shifts: 0700-1500, 1500-2300, 2300-700, and in these 3 shifts, the number of workmen employed is 10, 8 and 2 respectively.9. The second department works 5 days in a week on a one shift basis. The actual working time in this department is 8.25 hrs. per day which means 42.5 hrs. per week. This department is concerned with the production of ointment, mixing, injection, orals, INA, INAH, protinex and protin Hydrolisate. The last two departments of this department work 5 days in a week. The total number of employees in this department is 75 out of whom 18 are girls and 57 are boys.10. The third department which works 5 days in a week on a 2 shift basis, deals with packing, filling washing, tablet and capsules. The actual working time in this department is 8.25 hrs. per day which totals up to 42.5 hrs. per week . The two shifts are between 0800-1715 and 2145-0700. The total number of employees in this department in the day shift is 339, out of whom 134 are boys and 205 are girls, whereas the total number of employees in the night shift is 117 boys.11. The fourth department which works 5 days in a week on one shift basis consists of research and development, quality control, factory office, stores and despatch godown. Its actual working time is 8.25hrs. per day which means 42.05 hrs. per week. The total number of employees in this department is 165, 14 of whom are girls and 151 are boys.12. Now, as a result of the 3 shifts which the appellant proposes to introduce by its notice of change, there would be substantial change in the working arrangements in Groups II and III. There would be no change in shift working hours or work spread over in the first department. It may be that the number of its employees may increase. After 3 shifts are introduced, the second and third departments would he combined for the purpose of rotating the male workmen in the night shift. The timings for the three shifts which are proposed for these two departments combined are 7.20 A.M. to 3.20 P.M. 3.20 P.M. to 11.20 P.M. and 11.20 P.M to 7.20 A.M. The break for lunch and the break for two teas will continue. The result of the introduction of the 3 shifts would be, the working hours will increase by 1 1/4, the net increase in the working timings being 55 minute per week. As soon as the 3 shifts are introduced, the appellant expects that those working in the existing first shift would be placed in the new first shift and those working at present on the night shift will be placed on the second shift. The appellant proposes to increase the number of its employees in the second shift which it could not do at present because of difficulties in rotation. In the night shift about 30 to 50 employees would be engaged and night shift work would be rotated among the male employees with greater frequency. This, of course, will mean the employment of some additional hands which the appellant proposes to do. In regard to the fourth department, the present timings of 8.00 A.M. to 5.15 P.M. would be changed to 9.00 A.M. to 5.00 P.M. 6 days per week. This would result in increase in working hours by 1 1/4, the net increase in working timings being 55 mts. per week. That is the nature of the working arrangements which would evolve on the introduction of 3 shift system in the appellants factory. The week will cease to be 5 day week but will become 6-day week, and the working hours will increase by 1 1/4, the net increase in working timings being 55 mts. per week.13. In dealing with the merits of the dispute in the present appeals, it is essential to bear in mind that in the face of the present national emergency, the complexion of the problem has completely changed. The whole economy of the country is now being put on a war basis and inevitably, industrial production must be geared up to meet the requirements of the nation. There can be no doubt that at present, capital, labour and industrial adjudication alike must be sensitive, and responsive, to the paramount requirement of the community which is faced with a grave danger so, all legitimate efforts made by the employer to produce more and more of the goods required for the community must receive the co-operation of the employees of course, on reasonable terms. Both the learned Attorney-General and Mr. Sule conceded that at the time when this Court is dealing with the problem raised by these appeals, it would be necessary to decide the issues in the light of the peremptory and paramount requirement of the Nation at this hour. There can be little doubt that if the Tribunal had been dealing with the present dispute at this time, it would have adopted an entirely different approach.

Court's reasoning:
This grievance is, however, not well-founded because it appears from the record that the appellant was willing to pay for night work and was prepared to consider extra payment for third shift, but the respondents were not agreeable to consider that proposal because they were, on principle, opposed to the introduction of threethe grievance that the respondents would be wholly denied the overtime wages to which they would be entitled under the present arrangements loses much of its validity. We have already noticed that the maximum working hours under the present system in the factory of the appellant is 43 per week and it ranges between 42.05 to 43 hrs. and in no case, can the working hours be increased beyond 48. In fact, as we have already set out, according to the plan which the appellant wants to introduce, there would be an additional load of 1 1/4 working hours, the net additional working load being of the order of 55 mts. per week. In considering the question about the pattern of working arrangements in the pharmaceutical industry in the region, these facts cannot be ignored.It appears that in most of these factories, security and maintenance departments work three shifts. In Sandoz India Ltd., Thana, the pharma plant works 3 shifts. Similarly, in Raptakos Brett and Co. Pvt. Ltd., the Dextrose Maltose section works 3 shifts. In Merck Sharp and Dohme of India Ltd., Chemical manufacturing process goes on under 3 shifts. Similarly, in Parke Davis India Ltd. Chemical Product Operators work 3 shifts besides boiler serang, watchmen and electricians. Sarabhai Chemical, Baroda, have some departments working 3 shifts. Alembic, Baroda, have some departments working 3 shifts. Hindusthan Anti-biotic Poona have some departments working 3 shifts. Glaxo, Thana works 3 shifts. Lederle, Bulsar, works 3 shifts. It is true that the Tribunal was not prepared to consider any concerns situated outside Greater Bombay, but in dealing with the larger issue as to whether it would be permissible to introduce 3 shifts at least in respect of the chemical sections of the pharmaceutical industry, the Tribunal should not have adopted this rigid attitude. Therefore, on the material placed before us, it is clear that the chemical sections of the pharmaceutical factories do work 3 shifts and this would have a direct bearing on the appellants case in regard to P.A.S. section of its factory. Besides, as we have already observed, in dealing with the question about 3 shifts which would inevitably lead to more production, the background of the imperative necessity of today cannot at all bedo not see how this statement can materially affect the main point made by Dr. Joshi that the relevant processes beginning with precipitation which take 20 hrs. must be continuously attended to. It is true that the respondents attempted to contradict Dr. Joshis Statement by examining Mr. Pillai who was working in the P.A.S. department under Mr. Moeller. But Mr. Pillai is obviously not a technical man and it would be futile to suggest that the statements made by him should be preferred to those made by Dr. Joshi. Besides, it is significant that when he was cross-examined, he virtually conceded that the six important processes would take at least 18 1/2 hours and that itself would make it necessary to introduce three shifts. In this connection, we ought to add that the statements made by Dr. Joshi in regard to the time occupied by each process are supported by the contemporaneous record kept by the laboratory workers.This record was produced by Dr. Joshi and it was shown to Mr. Pillai who virtually refused to look at it. Therefore, in our opinion, the Tribunal was in error in holding that Dr. Joshis evidence did not establish the appellants case that the process of producing P.A.S. is a continuous process and in order to improve its quality and to avoid rejection of a large percentage of the product it is necessary that three shifts must be introduced in the session dealing with it. In fact the finding made by the Tribunal in this behalf shows that the Tribunal did not really consider seriously the value of Dr. Joshis evidence and was prepared to accept Mr. Pillais statements though they are plainly partisan statements made by a person without any technical knowledge. Therefore, there can be no doubt whatever that the appellant is entitled to start 3 shifts in the P.A.S. section and produce P.A.S. in larger quantities and of a better quality.At Chandigarh, there are no sufficient production facilities, and, besides, it is a different type of manufacturing unit. Thus, the material available to the appellants factory in Bombay from its sister factory in Chandigarh cannot be promptly dealt with, because the pharmaceutical section is working only in one shift.20. Mr. Treharne has also stated that a large number of orders are outstanding because the production capacity in Bombay is not adequate; and that means that the appellant is continually losing business through its lack of production facility and is unable to meet the demand of needy patients. This factor also adversely affects the appellants position vis-a-vis its competitors; and the witness added that the appellant sometimes finds that it is unable to quote for substantial Government and hospital tenders. Under these circumstances, particularly at the present time when the need for production of beneficent drugs is so great, it is difficult to resist the appellants claim that it should he allowed to introduce 3 shifts in order to produce more drugs and thus meet the requirements of the community. If the two departments are allowed to work 3 shifts. it would not be reasonable to hold that the department dealing in packing, filling, washing, tablet and capsules should not keep pace. The activities of these departments are integrated, and if the object in allowing the appellant to start 3 shifts in its manufacturing departments both chemical and pharmaceutical, is to encourage and enable it to produce more goods, then that object would be assisted if the subsidiary department is also allowed to work 3 shifts. Therefore, we are inclined to take the view that the claim of the appellant to introduce 3 shifts cannot today becan be no doubt that industrial employees are entitled to look forward to a 5-day week and work only by day. Two days rest at the end of every week would afford adequate opportunities to the employees to take part in cultural and recreational activities and would tend to make their work for the remaining 5-days more satisfactory and efficient. Similarly, working at night may, on theoretical grounds, not he desirable. But these are goals which may be reached after we attain an adequately high level in our national economy and industrial development. In the context of today, it would be unreasonable to approach this problem in a purely doctrinaire spirit. If, today, an employer desires to produce more goods which would meet the requirements of the community and is prepared to compensate the employees for the additional work involved in the process, industrial adjudication would be reluctant to discourage the employer and would assist both capital and labour to devise ways to co-operate with each other and produce more. Therefore, the academic arguments urged by Mr. Sule cannot be treated as effective for the purpose of deciding the present appeals.We do not propose to express any definite opinion on this theoretical controversy. As this Court has repeatedly observed, in dealing with industrial adjudication, it would be undesirable to reach conclusions purely on doctrinaire or theoretical considerations. Besides, as we have already emphasised, the adoption of such a theoretical or doctrinaire approach has, in the context of today, lost some of its validity. Therefore, we do not think the Tribunal was right in coming to the conclusion that the appellants claim for the introduction of 3 shifts should be rejected on the ground that it would involve the respondents working at night.25. Incidentally, we may add that from the record, it appears that the appellant is an enlightened employer and that the terms and conditions of service offered by it to the respondents are, on the whole, very fair. It also appears that in the factory itself, the appellant makes efforts to create conditions which would be conducive to the efficient working of the respondents. Miss Kolpe who has been examined by the respondents has stated that aseptic conditions are maintained in sterile areas and the room has to be kept in sterile condition. The workmen assigned to the job spray the rooms with certain chemicals. They do swabbing of machines, walls, windows, and some other workmen have to apply denatured spirit to machine parts before the said machines are used. Cleaning of the cabinet and machines parts has also to be done. It is true that a grievance was made on behalf of the respondents that there are no exhaust fans working in the night shift and that as a result, body itch may be caused if M. A. P. and postassium carbonate are handled barehanded. The appellants explanation was that the workers are given hand gloves and when complaints were made about body itch, the medical survey pointed out that they were not justified. We trust that when the appellant starts 3 shifts, it will take all reasonable precautions to make the conditions of work for the respondents healthy and conducive to the efficient discharge of their duties.26. There is one more minor point which still remains to be considered. It was urged before the Tribunal on behalf of the respondents that the time-table of factory working hours which the appellant proposes to introduce after bringing into force the three shift system would begin at 7.20 in the morning and that would cause inconvenience to the girl employees, and in support of this plea, two girl employees were examined. Miss Desai stated that she stays at Thana and if she had to join duty at 7.20 A.M., she would have to start earlier than 5 A.M. from her house. According to her, there is another girl employee of the factory who stays at Thana. Miss Rodriguies, who also supported the plea of inconvenience, stated that if the work were to begin at 7.20 A.M., she would not be able to get sleep because after she returns home she has to do tutions in order to help her family, and that means she cannot go to bed before midnight. Evidence was also led to show that in the locality where the factory is situated, if the girls were to go early in the morning, they stood the risk of being molested by bad characters. We are not impressed by this evidence. In considering the plea of inconvenience raised by the respondents, it would not be reasonable to rely upon stray cases of girl employees who stay away from Bombay, as, for instance, at Thana, or whose unfortunate economic condition compels them to work after factory hours. On the whole, it can be stated without any hesitation that 7.20 A.M. is not an unduly early hour for work in Bombay. Besides, it is relevant to remember that this hour has been taken as a starting hour having regard to the convenience of transport available in the locality. The Factory Manager, Mr. Pillai whom the appellant examined, has stated that he prepared a summary of the bus and train timings and came to the conclusion that 7.20 A.M. would be convenient to all the workmen. Therefore we do not think the ground of inconvenience on which the Tribunal has relied in rejecting the appellants case for 3 shifts, can be sustained.27. In this connection, we may incidentally refer to the fact that the Standing Order 10(1) (a) of the Standing Orders framed by the appellant clearly provides that more than one shift may be worked in any department or a section of a department at the discretion of the Manager; and it adds that in such cases, workmen shall be liable to he transferred from one shift to another. There is no doubt that the Standing Orders sanctioned by The Industrial Employment (Standing Orders) Act, l946 (No. 20 of 1946) constitute statutory terms and conditions of service between the employer and his employees, and so, it is open to the appellant to suggest that when the respondents took up their employment with it, they know that more shifts than one can be started by the management in its discretion. It is quite true that though the relevant Standing Order enables the appellant to introduce more shifts than one, if a dispute is raised by the employees in that behalf and is referred for industrial adjudication, the Industrial Tribunal may have to consider the reasonableness of the change proposed to be made by the management. It is obvious that additional shifts may result in additional workload being imposed on the employees, and in that sense, may constitute a change in the conditions of service. Therefore, it would be open to the Industrial Tribunal to examine the reasonableness of the change proposed to be made. But in dealing with this question, it would not be irrelevant to bear in mind the fact that more than one shift was contemplated by the Standing Order. In this connection, we would not be prepared to uphold the extreme stand taken by both the parties. We cannot hold that because the standing order contemplates the adoption of more than one shift, it is entirely and absolutely in the discretion of the management to make the change without due scrutiny by industrial adjudication, and so, the extreme stand taken by the appellant cannot be upheld; similarly, we cannot accept the contention that because the introduction of 3 shifts would mark a departure from the pattern prevailing in the pharmaceutical industry, the chance cannot be permitted. After all, the question must be considered in the light of relevant facts adduced before the Court, and in doing so, the importance and the necessity of more production must be borne in mind. We are therefore, satisfied that the Tribunal was in error in rejecting the appellants case for the introduction of three shifts.28. As we have already pointed out, the appellant was always willing to consider the question of paying additional amounts to the respondents either by way of increase in wages or by way of compensation in consequence of the change proposed to be made in the working structure of the factory. In fact, we were told that though the Tribunal has ordered that the appellant should pay to the night workers 10% over their basic wages and dearness allowance for the days on which they are required to work in the third shift, the appellant is paying 12% and it is similarly paying 8% to those who work in the second shift. Therefore, it cannot be said that the appellant was not prepared to submit to an order in regard to the additional adequate payment which should be made to the employees consequent upon the introduction of the third shift. Since this matter cannot be decided by us in appeal, we direct that the case should be sent back to the Tribunal which dealt with this dispute for its decision on this question. The Tribunal should allow the parries to lead evidence if they so desire, should hear them and should decide what additional payment should be made to the employees either by way of increase in the wages or by way of compensation, or otherwise in consequence of the change in the working time table of the factory resulting from the introduction of the third shift. The 3 shifts will come into operation after this issue has been finally decided by the Tribunal. Until then, the interim arrangement sanctioned by the award will continue. We trust the Tribunal will deal with the issue remitted to it as expeditiously as possible.29. That takes us to the appeal preferred by the respondents in respect of the reduction of holidays made by the award. We have already seen that the appellant gives to its employees all the public holidays under the Negotiable Instruments Act. In the relevant year, the number of such public holidays was 27. The Tribunal has taken the view that the number of public holidays thus allowed is unreasonably high and has ordered that they should be reduced to 10.There is some force in this latter contention. It is true that the Tribunal made a drastic reduction in the number of holidays partly because he refused the appellant permission to add to the working hours.30. In dealing with the question of paid holidays, it may be relevant to remember that the holidays declared under the Negotiable Instruments Act are usually applicable to Government institutions only and they have certain financial and statutory implications envisaged by the Act itself. The commercial establishments and factories do not usually adopt these holidays and so, it would not be reasonable to insist that the appellant is bound to grant holidays as sanctioned by the Negotiable Instruments Act. Besides, it is now generally accepted that there are too many public holidays in our country and that when the need for industrial production is urgent and paramount, it may be advisable to reduce the number of such holidays in industrial concerns. In dealing with the present appeals, the need for more production which has weighed in our minds in considering the question of 3 shifts, cannot be ignored. It is true that the Maharashtra Government seems to have adopted a very liberal policy in the matter of public holidays. In 1961, for instance, the said Government had declared 28 public holidays out of which 3 happened to fall on Sundays. It may be noticed that other State Governments have shown a tendency to reduce these holidays. U.P., for instance, had 18 public holidays, Andhra Pradesh had 17, Mysore 15 and Madras 14 in 1961. According to the Government of India, the number of public holidays is generally limited to 16. It is obvious that this question does not admit of a categorical answer one way or the other. It has to be decided on an ad hoc basis, bearing in mind all the relevant facts. Having considered all the relevant facts in the present case, we are disposed to think that the number of public holidays which are granted by the appellant to the respondents should be reduced from those sanctioned under the Negotiable Instruments Act to 16 every year.