KHALID - (1.) THIS appeal, by special leave, is directed against the award of the Industrial Tribunal in IT No. 531 of 1975, dated 27/10/1980. The appellants are the monthly-rated workmen at Wadala Factory of the Indian Hume Pipe Company Ltd., Bombay and the respondent the Company mentioned above. We will briefly refer to the history of the demands of the workmen in this Company to appreciate how the dispute involved in this appeal originated. The respondent (hereinafter referred to as the Company) is an Engineering concern owning sixty factories spread throughout India. In Bombay, it has a factory at Wadala and head office at Bellard Estate. In this appeal, we are concerned with the monthly rated workmen at the Wadala Factory. In this factory there are about 375 daily rated workers and 80 monthly rated clerical and subordinate staff. The total labour strength all over India is about 3000 daily rated workers and 1000 monthly rated clerical and subordinate staff. In the year 1950, there was an industrial dispute pertaining to the pay scales and dearness allowance of the workmen in this factory. An award was passed in this dispute by the concerned Industrial Tribunal in reference No. IT 82 of 1950. By this award pay. scales and fixed dearness allowance were introduced w.e.f. 1-7-1950, with the consumer price index in Bombay at 312 points in 1950. In 1957, the index rose by 55 points and stood at 367 points. There was another industrial dispute in 1958 in reference IT No. 77 of 1958 resulting in the award published on the 21/05/1959, introducing the slab system of D.A. w.e.f 1-2-1958. THIS award was not challenged by the Company at any time. In 1964, the labour sought revision in the pay scales for the monthly rated clerical and subordinate staff, as a consequence, of which reference IT No. 47 of 1964 was made resulting in an award published on 30-12-1965, which provided marginal increase in the basic pay scales, mainly on the ground that the slab system was working satisfactorily.
(2.) IN this Company the daily rated operatives were getting the old textile scale since the year 1942 which was raised to the revised textile scale as D.A. by an award. Thus, the daily rated operatives and the monthly rated clerical and subordinate staff were paid D.A. on different basis and at different rates in this Company. As there was no revision in the pay scales from 1950, for about 22 years a demand was made for revision in pay scales for monthly rated clerical and subordinate staff in the year 1972. This demand was referred to adjudication in reference IT No. 42 of 1973 as a consequence of which an award was published on 7-7-1977. The clerical and subordinate staff in the head office of this Company were also being given the slab system of D.A. This award observed that there should not be any disparity in the D.A. between the monthly rated factory staff and the head office staff. While the wage structure stood thus, the Company gave notice of change for doing away with slab system of D.A. by notice dated 15-7-1975, in respect of the head office staff and the monthly rated factory staff. The notice of change in respect of the head office staff was not pressed since a settlement was reached between the parties. As per this settlement arrived at in July 1976, the D.A. at consumer price index 1380 points was merged in the revised consolidated pay scale of different categories w.e.f. 1-9-1975. Although in September, 1975, the consumer price index figure was 1270 points, it was taken notionally as 1380 for the purpose of merger, indicated above providing for review of consolidated pay scales if the consumer price index moved high. The notice of change in respect of monthly rated factory staff was, however, referred to adjudication. The. Company's claim was to do away with the slab system of D.A. and to substitute it by revised textile scale. The Union filed a written statement justifying continuity of the slab system which was in vogue for 17 years. The Industrial Tribunal gave the award, impugned in this appeal, on 27/10/1980. The Tribunal came to the conclusion that the employer was justified in seeking abolition of the slab system of D.A. and substituting it with the textile scale of D.A. affording 115 per cent neutralisation. The Tribunal said that the workmen should be paid D.A. at 115 per cent of the revised textile rate in the same manner in which "the daily rated workmen are paid their D.A. at the prevalent cost of living index in the month of November, 1980 or if such index number is not available at that time then at the index No. 1771-1780". While making this award the Tribunal was conscious of the fact that the workmen were likely to lose quite a substantial amount of their D.A. However, the Tribunal got over this concern stating that it was inevitable, when attempt was made to, bring about uniformity and parity among the workmen of the same company working at the same place doing similar work. The Tribunal felt conscious of another distressing result of the award. The Tribunal felt that if the parity scheme was to come into force "either from the date of the demand or from the date of reference, another unfortunate happening would take place in that the workmen would be liable to refund a lot of amount excessively recovered by them as and by way of D.A. on account of slab system". The Tribunal felt that "it would be too harsh and unkind to such workmen" and therefore held that the award would come into force prospectively w.e.f. 1-11-1980. The Tribunal, not rest content with the expression of concern for workmen, gave another palliative to them lest the reduction in their D.A. should cause them dislocation financially all of a sudden and therefore observed that the reduction in the monthly emoluments of the workmen should be a gradual process "so that they are able to bear the burden and can learn to adjust themselves with little less income month to month," The reduction was. therefore, directed to be spread over equally for a period of six months from 1-11-1980.
(3.) WHEN the matter came up before this Court on 15-12-1980, special leave was granted and the following interim relief was given to the appellants. "Special leave granted. By way of interim relief it is hereby directed that the difference in the D.A. awarded by the Industrial Tribunal and the D.A. being paid on slab system which is directed to be reduced phasewise on monthly basis of 1/6th, reduction will be implemented in payments to be made in the months of December, 1980 and January, February, March, April and May, 1981, but shall be based on monthly wages thereafter from payments in the subsequent months and this will be subject to the further direction of this Court. Appeal be expedited... " This interim order was modified by the Vacation Judge on 14-3-1981, as follows : "The order passed by this Court on 15-12-1980 to continue till the end of August, 1981 on the appellants agreeing to reimburse the management in case they fail in the appeal which reimbursement will be by way of deduction from their dues." We will now proceed to consider the rival contentions put forward by the parties in support of and against the award. The Company, in justification of their change of. notice and defending the award passed, put forward their case as follows The Company manufactures various pipes, cement concrete pipes as well as steel pipes for Hydro Electric Projects. These products are manufactured as per definite orders and specifications by governmental bodies and other local authorities, unlike other industrial units which are at liberty to manufacture their products and market them. Their products are usually bulky in nature, making transport difficult and costly. For easy transport of these bulky products, the Company decided to establish as many as sixty factories all over India to cater to the needs of the local markets and to make them easily accessible to avoid damage to their products and heavy transporting charges. The products of the Company have only a limited market and therefore, has to face keen competition unlike cement, steel, sugar, chemicals etc. which have an expanding market and which can be programmed in anticipation of sale. The Company has three thousand daily paid workmen and thousand monthly paid workmen all over India. Out of these, the appellants form only 80 monthly paid workmen, employed in Wadala manufacturing factory. The slab system of dearness allowance, according to the Company, has been universally condemned by successive Tribunals. The appellant-Union enjoys a privileged position out of this four thousand workmen of the Company all over India. While conceding that the appellant-Union had been enjoying the slab system of dearness allowance till the reference was made, it is stated that at the time the slab system was introduced it was never conceived by the Tribunals that the cost of living index would spiral up to such great heights as to make payments difficult. The dearness allowance enjoyed by the appellant-Union is so high in certain cases that neutralisation is at rates much higher than 100 per cent which is discouraged and is disapproved consistently by this Court and other Industrial Tribunals. It is further stated that the Company does not have the capacity to pay the slab system of dearness allowance and in case the remaining monthly rated workmen put forward such a claim; the respondents will be forced to close down their factories. The appellant-Union pleaded that the award of the Tribunal was defective both in law and on facts. The Tribunal did not have any material before it compelling it to change a system that had satisfactorily worked for 178 years and in effect had become part and parcel of the service conditions of the workmen. The findings of the Tribunal that the slab system had become unscientific and improper, that continuance of the system was not in national interest or in public interest, that ever since slab system was introduced neutralisation had become more than 100 per cent and that the slab system confined to the appellant alone would create disparity and discontent among workmen are according to the appellants not based on evidence. The observation in the award that the Union did not bring on record any evidence to show that wages paid to. them were far below the living wage or to show that the modification sought would cause them hardship which they would not be able to stand is incorrect and is made without being faithful to the facts and evidence in the case. With these rival contentions in view, we will now proceed to consider the award. ;