Case: Messrs. Shalimar Works Limited Vs. Their Workmen

2. There was a dispute between the company and its workmen on a number of matters and it was referred to the Sixth Industrial Tribunal for adjudication by the Government of West Bengal. Only two matters now survive out of the many referred to the Tribunal, namely, (1) profit sharing bonus and (2) reinstatement of 250 old workmen3. We shall first deal with the question of profit sharing bonus. It appears that the company had a profit sharing bonus scheme in force on the following lines. It provided that after making certain deductions, if the remaining profit was between Rs. 1,50,000 and Rs. 1,99,999, the workmen would be entitled to quarter of a months average basic pay as bonus. When the remaining profit was between Rs. 2.00 lacs and Rs.2,49,999 the bonus went up to half of a months average basic pay. When the remaining profit was between Rs. 2,50,000 and Rs. 2,99,999, the bonus was to be three quarters of a months average basic pay and when the remaining profit was Rs. 3 lacs or more the bonus was to equal one months basic pay. No bonus was to be paid if the profit was less than Rs. 1,50,000. There were provisions that the full bonus would be paid to a workman who had attended 275 days in a year (inclusive of holidays and leave with pay) while those with less attendance were to be paid proportionately with the condition that if the attendance of any workman was less than 100 days he would be entitled to no bonus. The workmen wanted this scheme to be revised and the main revision they desired was that the bonus should begin with a profit of Rs. 25,000 after the usual deductions when it would be one weeks wages and should go on increasing till it came to three months wages for profit above Rs. 1 lakh and up to Rs. 3 lacs; thereafter it should increase further at the rate of 21 days wages for each lakh over 3 lakhs. This was opposed by the company, though the company agreed to a change in the quantum of bonus when profit after deductions was Rs. 3 lakhs or above. In the scheme in force, the bonus was equal to one months basic pay when the profit was Rs. 3 lakhs or above, with no further increase whatsoever be the profits. The company agreed to revise this term and suggested that when profit was-(i) between Rs. 3 lakhs to Rs. 4 lakhs, bonus should be four weeks wages;(ii) above Rs. 4 lakhs up to Rs. 5 lakhs, bonus should be five weeks wages;4. The Industrial Tribunal did not accept fully the contentions of either party in this connection, though it varied the scheme in force in certain particulars. After the variation the scheme was as below:(i) from Rs. 80,000 to Rs. 1,99,999,bonus at the rate of one weeks average basic pay;(ii) from Rs 2.00 lakhs to Rs. 2,49,999,bonus at the rate of half of a months average basic pay;(iii) from Rs. 2.50 lakhs to Rs. 2,99,999,bonus at the rate of three-quarter of a months average basic pay;(iv) from Rs 3.00 lakhs to Rs 4.00 lakhs,bonus at the rate of four weeks average basic pay;(v) from above Rs. 4.00 lakhs up to Rs 5.00 lakhs,bonus at the rate of six weeks average basic pay; and5. For remaining profit after the usual deductions-The Industrial Tribunal also accepted 275 days attendance for earning full bonus and proportionate bonus when the attendance fell below 275 days and the minimum of 100 days attendance for earning any bonus at all. It also held that bonus for the years 1951 and 1952 should be paid at the existing rates while revised rates should be applied from the year 1953 onwards7. The Appellate Tribunal saw no reason to interfere with the award of the Industrial Tribunal in this respect and dismissed the appeals with one modification, namely, it added that if in any year it was found that the bonus worked out according to the award of the Industrial Tribunal was less than profit bonus, calculated according to the Full Bench formula evolved in Mill-Owners Association, Bombay v. Rashtriya Mill Mazdoor Sangh, Bombay, (1950) 2 Lab LJ 1247 (FB) (LATI-Bom), the workmen would be entitled to bonus under the formula; otherwise they would get bonus under the scheme as modified by the Industrial Tribunal.

Court's reasoning:
13. There is no doubt that strictly speaking the order of the company discharging its workmen on 6-4-1948, when a dispute was admittedly pending was a breach of S. 33; (see Punjab National Bank Ltd. v. Employees of the Bank, 1953 SCR 686  : (AIR 1953 SC 296  )). The remedy for such a breach is provided in S. 33-A and it can be availed of by an individual workman. If therefore it was felt by the workmen who were discharged on April 6, 1948, that there was breach of S. 33 by the company, they should have applied individually or collectively to the tribunal under S. 33-A. None of them did this. It is true that some kind of letter was written to the Assistant Labour Commissioner in November 1949, but that was also very late and nothing seems to have happened thereafter for almost another three years, till the first reference was made on 7-l0-1952. It is true that there is no limitation prescribed for reference of disputes to an Industrial Tribunal; even so it is only reasonable that disputes should be referred as soon as possible after they have arisen and after conciliation proceedings have failed particularly so when disputes relate to discharge of workmen wholesale, as in this case.The industry has to carry on and if for any reason there has been a wholesale discharge of workmen and closure of the industry followed by its reopening and fresh recruitment of labour, it is necessary that a dispute regarding reinstatement of a large number of workmen should be referred for adjudication within a reasonable time. We are of opinion that in this particular case the dispute was not referred for adjudication within a reasonable time as it was sent to the Industrial Tribunal more than four years after even re-employment of most of the old workmen. We have also pointed out that it was open to the workmen themselves even individually to apply under S. 33-A in this case; but neither that was done by the workmen nor was the matter referred for adjudication within a reasonable time.In these circumstances, we are of opinion that the tribunal would be justified in refusing the relief of reinstatement to avoid dislocation of the industry and that is the correct order to make. In addition, the reference in this case was vague inasmuch as the names of 250 workmen to be reinstated were not sent to the Industrial Tribunal and no list of these men was given to it till practically after the whole proceeding was over.Even the list then supplied was so bad that the Industrial Tribunal did not think it worthwhile to act upon it, and directed the company to give a notice to the strikers to ask for re-employment within a certain time. This the company had already done on July 5, 1948. That notice had gained considerable publicity, for the majority of the workmen did appear thereafter for re-employment by July 21. In the circumstances there was no reason for ordering reinstatement of any one on such a vague reference after such an unreasonable length of time.The defect, in the order of discharge of April 6, due to permission not having been obtained under S. 33 can in the circumstances of this case be ignored on the ground that the workmen who did not re-join in July 1948 were not interested in reinstatement:firstly, on account of the circumstances in which that order came to be made after an illegal and unjustified sit-down strike, secondly, because the workmen in their turn did not avail themselves of the remedy under S. 33-A which was open to them, and thirdly, because the reference was made after an unreasonable length of time and in a vague manner. We are therefore of opinion that the Appellate Tribunal should not have ordered the reinstatement of even the fifteen workmen in the circumstances as their case was exactly the same as the case of the hundred workmen, except in the matter of the withdrawal of the provident fund.