Case: Workmen Of The Bharat Petroleum Corporation Ltd. (Refiningd Vs. Bharat Petroleum Corporation Ltd. And Another

1. The workmen of the Bharat Petroleum Corporation Limited, Bombay raised an Industrial dispute with regard to the retirement age of the clerical staff employed in the Refinery Division of the Bharat Petroleum Corporation Limited at Bombay. The demand of the workmen was that the retirement age of the clerical staff of the Refinery Division at Bombay must be raised from 55 years to 60 years in keeping with the trend in the Bombay region. The Company resisted the demand on the ground that in all similar oil companies, the retirement age of the clerical staff engaged in the Refinery Division had never been fixed at 60 years. Before the Industrial Tribunal, Maharashtra at Bombay to whom the dispute was referred for adjudication, neither party led any oral evidence. The workmen relied upon several decisions of this Court to establish that the trend of industry in Bombay was to fix the retirement age of the clerical staff at 60 years, while the company contended itself by filing a statement showing the age of retirement of the clerical staff employed in various oil companies. The Industrial Tribunal found as a fact that the wage scale of the company were not much better than the wage scales of other comparable concerns. The Industrial Tribunal also noticed that the age of retirement of the clerical staff of the company in its Marketing Division both at Bombay and other places was fixed at 58 years. The Industrial Tribunal, therefore, held that there was no valid reason why the retirement age of the clerical staff employed in the Refinery Division should not be raised at least to 58 years. But having regard to the circumstances that the clerical staff did employed in the Refinery Division had already been granted, under a settlement, the benefits of Provident Fund and Gratuity and having further regard to the fact the while the number of members of the clerical staff employed in the Refinery Division was 148 only, there were as many as 1095 workmen in thecategory, who would also surely raise a dispute to revise their retirement age, the Industrial Tribunal thought that in the interest of industrial harmony, it would be proper to raise the retirement age of the clerical staff to 58 years only and not to 60 years. The workmen have preferred this appeal under Art. 136 of the Constitution. As before the Industrial Tribunal, so too before us, the workmen relied on the trend in the Bombay region while the company relied on the position in other oil companies.

Court's reasoning:
14. Shri Pai invited our attention to the circumstance that in other refineries elsewhere in India, the retirement age of clerical staff has generally been fixed at 58. But we are primarily concerned with the trend in the Bombay region. In matters of this nature, greater importance must naturally be given to the regional factor. That was why in the Dunlop case, (supra) emphasis was laid on the "prevailing conditions, particularly in than region", in the Imperial Chemical Industries case (supra), the trend in the Bombay region was considered the most vital factor and in the Burmah Shell case (supra), it was stressed that in fixing the age of superannuation, the most important factor that had to be taken into consideration was the trend in the particular area. We may add here that in applying the region-cum-industry formula, the emphasis to be placed on region or industry depends upon varying factors. In Greaves Cotton and Co. Ltd. v. Their Workmen [1964-I L.L.J. 342], this court observed that where the number of industries of the sane kind in a particular region was small, it was the region aspect of the industry-cum-region formula which assumed importance particularly in the case of clerical and subordinate staff. Reference was made to Workmen of Hindustan Motors v. Hindustan Motors [1962-II L.L.J. 352] and French Motor Card Company v. Their Workmen [1962-II L.L.J. 744] and it was saidthere are large number of industrial concerns of the same kind in the same region, it would be proper to put greater emphasis on the industry part of the industry-cum-region principle as that would put all concerns on a more or less equal footing in the matter of production costs and therefore, in the matter of competition in the market and this will equally apply to clerical and subordinate staff whose wages and dearness allowance also go into calculation of production costs. But where the number of comparable concerns is small in a particular region and therefore, the competition aspect is not of the same importance, the region part of the industry-cum-region formula assumes greater importance particularly with reference to clerical and subordinate staff and this was what was emphasized in than French Motor Car Company case, where the company was already paying the highest wages in the particular line of business and therefore comparison had to be made with as similar concerns as possible in different lines of business for the purpose of fixing wage-scales and dearness allowance. The principle therefore which emerges from these two decisions is that in applying the industry-cum-region formula for fixing wage scales the tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind. But where the number of industries of the same kind in a particular region is small, it is the region part of the industry-cum-region formula which assumes importance particularly in the case of clerical and subordinate staff, for as pointed out in the French Motor Car Company case there is not much difference in the work of this class of employees in differentFrench Motor Car Co. v. Their Workmen, (supra), an argument was advanced that the appellant company was paying the highest wage scales in a particular line of business in which it was engaged and there was, therefore, no justification for increasing the wage scales by comparison with wage scales in other lines of business. This argument was rejected with the following observationsare of opinion that this argument cannot be accepted, for it would then mean that if a concern is paying the highest wages in a particular line of business, there can be no increase in wages in that concern whatever may be the economic conditions prevailing at the time of dispute. It seems to us, therefore, that where a concern is paying the highest wages in a particular line of business, there should be greater emphasis on the region part of the industry-cum-region principle, though it would be the duty of the industrial court to see that for purposes of compression such other industries in them region are taken into account as are as nearly similar to the concern before it as possible. Though, therefore, in a case where a particular concern is already paying the highest wages in its own line of business, the industrial courts would be justifies in looking at wages paid in that region in other lines on business, it should take care to see that the concerns from other lines of business taken into account are such as are as nearly similar as possible, to the line of business carried on by concern beforeWorkmen of Orient Paper Mills Ltd. v. Orient Paper Mills Ltd. [1969-II L.L.J. 398], this court relying on the French Motor Car Company case held that where two other paper industries in the region are of recent origin and their profits were smaller, it was the duty of take Industrial Tribunal not to compare the appellant-company with those companies, but to compare the same with other industries in the region, three of which were collieries, two cement companies, one a steel plant and one aluminium factory.15. These decisions make it clear that where there are no comparable industries in the region, the regional aspect of the region-cum-industry formula must be given precedence. That was what was done in the Dunlop Rubber Co. (supra) the Imperial Chemical Industries (supra) and the Burmah Shell Oil Co. cases (supra). Rightly, therefore, the Tribunal did not rest its conclusion on this factor.16. Shri Pai informed us that even in the case of the clerical staff of the Marketing Division, there is no longer any pension scheme for those that have joined the Corporation after nationalisation. This again was not one of the grounds on which the Tribunal rested its conclusion and we wish to say no more about it, as we do not want to jeopardise any claim that the workmen may have on that basis or any answer that the Management may have in that regard.