WANCHOO, - (1.) THE following Judgment of the court wasdelivered by:
(2.) THESE nine appeals by special leave arise out ofthe awards of the Industrial tribunal, Bombay and will bedealt with together. There were disputes between the fourappellants--companies and the respondents, their workmen,which were referred for adjudication to the IndustrialTribunal by nine reference-orders on various dates betweenApril to December 1959. The main dispute which gave rise tothe references was with respect to wages, dearness allowanceand gratuity. The references included other items also butwe are not concerned in the present appeals with thoseitems. Of the four companies who are the appellants beforeus, Greaves Cotton and Co., is the first company and itsmain activity is to invest money in manufacturing concerns.The second company is Greaves Cotton and Crompton ParkinsonPrivate Limited and its main business is distribution of theproducts of a manufacturing concern known as CromptonParkinson (Works) India Limited and service and repair tothe said products at its workshop. The third company isKonyon Greaves Private Limited and its main business is tomanufacture high grade interstranded ropes for the textileindustry. The last company is Ruston and Hornsby (India)Private Limited and its main business is to manufacture oilengines and pumps. The last three companies are controlledby the first company, namely Greaves Cotton and Co., in oneway or the other and that is how the main dispute relatingto wages and dearness allowance was dealt with together bythe tribunal. There were two references each with respectto the first three companies and three references withrespect to Ruston and Hornsby Private Limited; and that ishow there are nine appeals before us. There were nineawards, though the main award dealing with the main disputerelating to wages and dearness allowance was common. It appears that wages and dearness allowance prevalent inthe four companies had been continuing since 1950 when thelast award was made between the parties. It may also bestated that there was no .serious dispute before theTribunal as to the financial capacity of the companies andfurther, as the first company controls the other threecompanies, the wages and dearness allowance are the same sofar as the clerical and subordinate staff are concerned.The same appears to be the case with respect to factory-workmen. The tribunal dealt with clerical and subordinate staffseparately from the factory-workmen. So far as the clericaland subordinate staff are concerned, the tribunal, after acomparison of wages and dearness allowance prevalent in thefour companies with wagesand dearness allowance prevalent in comparable concernsrevised them. Further it provided bow the clerical andsubordinate staff would be fitted in the new scales aftermaking certain adjustments and in that connection it gaveone to three extra increments depending upon length ofservice between 1950 to 1959. Finally, it ordered that theaward would have effect from 1/04/1959, which was a weekbefore the first reference was made with respect to thefirst company. The tribunal then dealt with the case of thefactory-workmen and prescribed certain rates of wages.Further it gave the same dearness allowance to the factory-workmen as to the clerical and subordinate staff anddirected adjustments also on the same basis. Finally itconsidered the question of gratuity and the main provisionin that respect was that the maximum gratuity allowablewould be upto 20 months and a provision. was also made tothe effect that if an employee was dismissed or dischargedfor misconduct which caused financial loss to the employer,gratuity to the extent of that loss only will not be paid tothe employee concerned. The main attack of the appellants is on the award as regardswages and dearness allowance. It is urged that theindustry-cum-region formula, which is the basis for fixationof wages and dearness allowance has not been properlyapplied by the tribunal and it had been carried away by therecommendations of the tripartite conference which suggestedneed based minimum wages. It is also urged that whatevercomparison was made was with concerns which were notcomparable and the wages awarded were even higher than thoseprevalent in any comparable concern. It is also urged thatthe tribunal did not consider the total effect of theincrease it was granting in basic wage and dearnessallowance together as it should have done, for the purposeof finding out whether the total pay packet in theappellants' concerns can bear comparison with the total paypacket of the concerns with which the tribunal had comparedthe appellants' concerns. In this connection it is urgedthat in flyingscales of wages the tribunal increased the maximum and theminimum and the annual rate of increment and decreased thespan of years in which the maximum would be reached.Adjustments made by the tribunal are also attacked and so isthe order making the award enforceable from 1/04/1959.As to the factory workmen it is urged that the tribunal madeno attempt to make a comparison with wages prevalent even inwhat it considered to be comparable concerns. Lastly it isurged that the tribunal created a new category of factoryworkmen called higher unskilled which was not demanded andwhich in any case did not exist in any comparable concern. The first question therefore which falls for decision iswhether the tribunal went wrong in not following theindustry-cum-region principle and in leaning on therecommendations of the Tripartite Conference. It is truethat the tribunal begins its award with a reference to therecommendations of the Tripartite Conference wherein theneed-based minimum wage was evolved. It is urged that thisdisposed the tribunal to pitch wage-scales too high. It ishowever clear from the award that though the tribunaldiscussed the recommendations of the Tripartite Conferenceat some length, when it actually came to make the award itdid not follow those recommendations. The reason why itreferred to those recommendations was that the respondents-workmen based their claim on them and wanted that theTribunal should fix wagescales accordingly. But theTribunal's conclusion was that it was not feasible to do so,though looking at the financial stability of the appellants,emoluments needed upgrading. It then went on to considerthe wages prevalent in comparable concerns and finally fixedwages for the appellants on the basis of wages prevalent insuch concerns. Though therefore the recommendations of theTripartite Conference are referred to in the tribunal'saward, its final decision is not based on them and what theTribunal has done is to make comparisons with what itconsidered comparable concerns so far as clerical andsubordinate staff are concerned. We are therefore not prepared tosay that reference to the recommendations of the TripartiteConference in the opening part of the award was irrelevantand therefore the rest of the award must be held to bevitiated on that ground alone.
(3.) THE main contention of the appellants however is that thetribunal has gone wrong in applying the industry-cum-regionformula which is the basis for fixing wages and dearness andhas made comparison with concerns which are not comparable.It is also urged that the tribunal has relied more on theregion aspect of the industry-cum-region formula and not onthe industry aspect when dealing with clerical andsubordinate staff and in this it went wrong. Reference inthis connection is made to two decisions of this court,namely, Workmen of Hindusthan Motors v. HindusthanMotors(',) and French Motor Car Company v. THEir Workman (2) and it is emphasis that the principles laid down inHindusthan Motors' case(') were more applicable to thepresent case than the principles laid down in the FrenchMotor Car Co.'s case(2). In the Hindusthan Motors case(1),this court observed that it was ordinarily desirable to haveas much uniformity as possible in the wage-scales ofdifferent concerns of the same industry working in the sameregion, as this puts similar industries more or less on anequal footing in their production struggle. This courttherefore applied the wage-scales awarded by the Third MajorEngineering tribunal in Bengal in the case of HindusthanMotors also. It is urged that the tribunal should havetaken into account comparable concerns in the same industryand provided wage-scales on the same lines so that, so faras manufacturing concerns in the present appeals areconcerned, there will be equality in the matter ofcompetition. In the French Motor Car Co.'s case(2) howeverthis court held so far as clerical staff and subordinatestaff are concerned that it may be possible to take intoaccounteven those concerns which are engaged in different lines ofbusiness for the work of clerical and subordinate staff ismore or less the same in all kinds of concerns. We are ofopinion that there is no inconsistency as urged in theprinciples laid down in these two cases. As we have alreadysaid the basis of fixation of wages and dearness allowanceis industry-cum-region. Where there are a large number ofindustrial concerns of the same kind in the same region itwould be proper to put greater emphasis on the industry partof the industry-cum-region principle as that would put allconcerns on a more or less equal footing in the matter ofproduction costs and therefore in the matter of competitionin the market and this will equally apply to clerical andsubordinate staff whose wages and dearness allowance also gointo calculation of production costs. But where the numberof comparable concerns is small in a particular region andtherefore the competition aspect is not of the sameimportance, the region part of the industry-cum-regionformula assumes greater importance particularly withreference to clerical and subordinate staff and this waswhat was emphasised in the French Motor Car Co.'s case()where that company was already paying the highest wages inthe particular line of business and therefore comparison hadto be made with as similar concerns as possible in differentlines of business for the purpose of fixing wage-scales anddearness allowance. THE principle therefore which emergesfrom these two decisions is that in applying the industry-cum-region formula for fixing wage scales the tribunalshould lay stress on the industry part of the formula ifthere are a large number of concerns in the same regioncarrying on the same industry; in such a case in order thatproduction cost may not be unequal and there may be equalcompetition, wages should generally be fixed on the basis ofthe comparable industries, namely, industries of the samekind. But where the number of industries of the same kindin a particular region is small it is the region part of theindustry-cum-region formula whichassumes importance particularly in the case of clerical andsubordinate staff, for, as pointed out in the French MotorCar Co.'s case,(' there is not much difference in the workof this class of employees in different industries. In thepresent cases it does appear that the tribunal has leanedmore on the region part of the industry-cum-region formulaand less on the industry part. But we think that it cannotbe said that the tribunal was wrong in doing so for tworeasons. In the first place these four companies are notengaged in the same line of industry; but on account ofcertain circumstances, namely, that Greaves Cotton and Co.is the controlling company of the other three, it has beenusual to keep the same scales for clerical and subordinatestaff in all these concerns. In the second place, it is notclear, as was clear in the Hindusthan Motors case(' thatthere are a large number of comparable concerns in the sameregion. As a matter of fact the main company out of thesefour is Greaves Cotton and Co. Limited, which is in the mainan investment and financial company and the tribunal wastherefore right in taking for comparison such companies aswould stand comparison with the main company in the presentappeals (namely, Greaves Cotton and Co). Both parties filed scales of wages prevalent in what theyconsidered to be comparable concerns and it is clear fromthe documents filed that some of the comparable concernswere the same in the documents filed by the two parties. Onthe whole therefore we do not think the tribunal was wrongin putting emphasis on the region aspect of theindustry-cum-region formula in the present case insofar asclerical and subordinate staff was concerned., for the fourcompanies before us do not belong to the same industry andGreaves Cotton and Co. controls the other three.Considering therefore the standing of the main company(namely, Greaves Cotton and Co. Ltd.), it was not improperfor the tribunal in the present cases to rely on thecomparable concernswhich were cited on behalf of the respondents, some of whichwere common with the comparable concerns cited on behalf ofthe appellants. What the tribunal lid thereafter was toconsider the minimum for various categories of clerical andsubordinate staff prevalent in these comparable concerns andthe maximum prevalent therein at-id also the annualincrements and the span of years in which. the maximum wouldbe reached. The tribunal then went on to fix scales forvarious categories of clerical and subordinate staff of theappellants which were in-between the scales found in variousconcerns. Further, as the financial capacity of theappellants was not disputed, the tribunal pitched thesescales nearer the highest scales taking into account thefact that for nine years after 1950 there had been noincrease in wage scales. We do not think therefore that thewage sales fixed by the tribunal, learning as it did, on theregion aspect of the industry-cum-region formula, for theclerical and subordinate staff can be successfully assailedby the appellants. It has however been urged that the tribunal overlookedconsidering what would be the total wage packet includingbasic wages and dearness allowance and that has made thetotal wages (i.e. basic wage and dearness allowance) fixedby the tribunal much higher in the case of the appellantsthan in comparable concerns which it took into account. Itis true that the tribunal has not specifically consideredwhat the total wage packet would be on the basis of thescales of wages and dearness allowance fixed by it as itshould have done; but considering that wage scales fixed areless than the highest in the comparable concerns though morethan the lowest, it cannot be said that the total wagepacket in the case of the appellants would 'be necessarilyhigher than in the case of the other comparable concerns.This will be clear when we deal with the dearness allowancewhich has been fixed by the tribunal, for it will appearthat the dearness allowance fixed is more or less on thesame lines, i.e. less thanthe highest but more than the lowest in other comparableconcerns. On this basis it cannot be said that the totalwage packet fixed in these concerns would be the highest inthe region. Though therefore the tribunal has notspecifically considered this aspect of the matter which itshould have done its decision cannot be successfullyassailed on the ground that the total wage packet fixed isthe highest in the region. ;