The Workmen of Western India Match Co. Ltd. v. The Western India Match Co. Ltd.,

JI aiMlloar J. period until the expiry of two months from the date

on which a notic" in writing of his intention to ter-minate the settlement is given by one of the parties to the other party. Unquestionably the parties had arrived at a settlement on April 29, 1955 relating, amongst other things, to 'dearness allowance and the saales of pay and no formal notice as contemplated by sub s. (2) of s. 19 was given. In our opinion, however, it is not open to the respondent-company to raise this contention in so far as revision of pay scales is concerned because in the memorandum of settlement May 23, 1958 signed by the representatives of tho parties to this appeal it is clearly provided that the revision of scales of pay be referred for adjudicat.ion to the same Industrial Tribunal which wa~ dealing with the question of dearness allowance. Besides, that, this memorandum contains the following recital: "Parties were met jointly on several occa sions as a. result of which the entire dispute, except the issues of (I) Dearness allowance (which has already been referred to the Fourth Indu•trial Tribunal for adjudication) and (2) }ievision of scalE>s of pay, has been settled on the following terms; ......... "

This recital shows that the respondent was agreeable to refer to the Tribunal not only the issue relating to revision of pay scales but also that dealing with dearness allowance. Further, in para. 37 of ita written statement the r<'spondent-company clearly accepted the position that the Tribunal had jurisdic-tion to deal with the issue of dearness allowance. Thie circumstance precludes the responc!ent:from now objeoting to the jurisdiction of the Tribunal, 1962 .;i. A part from that we may point out that in its reply

dated Maroh 29, 1957 to the charter of demands The Workmen of' '\-\T estern Match Co. sent.on behalf of the appellant-union it was stated L•d that the previous settlement had not been validly v. The Western Indi'J terminated and in answer to that the .General ::iecre· Match Co. Ltd. tary. of the Union wrote on April 8, 1957 sayi!lg that M udholkar J. various representations made by the union to the respondent and the presentation of the charter of demands amounts to a notice of termination of the .,. settlement. Thus, though no formal notice under

s. 19(2) was. given this letter can itself be construed as notice within the meaning of that provision. It may: be noted that the representation was made long after tho expiry of two mon1hs from this date.

For these reasons we overrule the contention of Mr. Sen.

, Now, coming to the merits, the main point J urged by Mr. Chatterjee on bL·half of the union i•

that there has been discrimination between the employees of the respondent in the Alam bazar factory and their counterparts i)i the sales office in Calcutta. According to him eve11 though these per-sons dJ the same kind of work they are given diffe-rent grades and scales of pay and different scales of dearness allowance He contends that 1 bci cm ployees of the same employer doing tlie same 11 ind of work in the same city 011ght not to be differentiated in this manner and that decision of the Tribunal denier!

the members of the appellant-union equality with their counterp:irts in the sales offiee and is contrary to the principles of industrial law we may, however, point out that the appellant union claimed party t with the sales office employees only in the matter

of dearness allowance and have referred to the exis-tence of different pay scales in the sales office only in support of their claim fol" an upward revision of -<the present pay scales. It io, therefore, not open to

learned counsel now to urge that the p1y scales also

36 SUPREME OOURT REPORTS [1963)

1,0, should be same for the factory employees as for the

sales office employees. We shall, therefor(', consider <it TM Work,,,m•f the argument based on the ground of unwarranted Wut•rn MGZth c •.

Lid ... discrimination only in so far as it relates to the Wut•'" fnd;tJ question of dearneBB allowance.

JI 01<h Co. Lt,, For considering this argnment i' is desirable JI""""' .. ' to bear in mind the history of industri!ll adjudica-

J. tion in Bengal and also the precise reason why a

different basis for computing dearness allowance is applied to the respondent employees in the sales office from that applied to its factory employees. Towards the end of tho year 1945 the Bengal Cham-ber of Commerce made an enquiry as to the cost of living of the clerical staff employed in mercantile firms in the city of Calcutta. On tho basis of that enquiry it fixed a certain amount as dearnesH allo-wance for these employees. It also fixed for the employees what it called the middle class cost of living index an<i recommended acceptance of its findings to its constituent members. Mr. Sen stated that the respondent's sales office is a member of the Bengal Chamber of Commerce but its factory in Alambazar is not a member of tho Chamber of Com-merce anrl this waa not controverted by Mr. Chat-terjee.

In the year 1948 disputes arose between the employees and employers of engineering firms in Calcutta as well as employees and employers of mercantile concerns in Calcutta. These disputes were referred to separate Industrial Tribunals. The first Engineering Tribunal waa appointed on July 3, I !J48 to which disput!'S rPlating to 119 companies, inoluding the respondent's factory, were referred. The award made by it was eventually published in the Calcutta Gazette and effect was given to it. Further disputes arose between some engineerin~ concerns and their !'mployees. These were referred to a 8econd Engineering Tribunal on August 31, 1950 and effect was given to its award. It would, there-116! fore, appear that members of a union like the. one Thi W ork1111n •I of em,iloyees of the respondent's factory at Alam-Westlrn Match Oo. bazar have been dealt with on a different footing Ltd. y, from the employees of a sales office in C~lcutta, the TM W6sf1111 lndi•· former being employees o'f an engineering concern M ateh Cc. Ltd. and the latter of a menantile one. It was, however, Jlwiholkar J. contended before us that they are not two· indepen-dent tJnderta.kings but parts of the same one, that is, Western India Match Co., and, thereforP, in the matter of payment of dearness allowance at least .,_ they should be dealt with on the same footing.

As we have already pointed out the employees in the sales office are governed by the recommenda-tions of the Bengal Chamber of Commerce which the respondent was more or less bound to accept to be in line with other similar establishments and, therefore, the case of the factory employees cannot be equated with that of the sales office employees.

In Qlerks of Calcutta Tramways v. Calcutta 'l'ram-ways Co. Ltd.(1) the clerical staff of the Calcutt& Tramways claimed that since they belonged to the mid<1.le class they should be paid dearness allowance on the basis of the finding of the Bengal Chamber of Commerce. Their plea was nagatived by this Court on the ground that in the matter of grant ·of dearness allowance no hard and fast rule is appli-cable to all kinds of employees, that there are diffe- > rent grades amongst middle ·classess and the clerical

staff of the Calcutta Tramways cannot claim to be awarded dearness allowance at the rates fixed by the Bengal Chamber of Commerce for mercantile firms. It may further be pointed out that . the fac-tory employees cannot all claim to belong to the middle class because admittedly two-thirds of them belong to what is known as the subordinate staff.

It may be that the clerical staff both in --Oaloutta proper and in Ala.mbazar doe11 work whieh 1961 ono set of clerks cloes iH not the same as that of the 7h1 W01k111111 of other set. Cl•,l'ks in the factories hrwe to do Western ,lf •·ch Co. i·ork in connection with tho manufacturing processeR i

[Ad in the factory, the !about· cmploJ ed in the facto1y, '· Tl~ W1stcrn b11/i3 raw materials arriving in the factory. the finished Match Co, Ltd, product8 of the factory and so on a.nd so forth. The Mudholk" J. work which the clerical "taff in the sales office has

t.o do is connected with the marketing of the finished J roduct, dealing with other firms, carrying on <:Orrespondfncc with the head office and other units and so on and so forth. There is no identity in the work of tho two sets of clerical staff though there may be similarity. It is said that tho work they do carries more responsibility. That may or may not be so but clearly if the work rnrh set of employees does is not identical, it would b<: open to the cmployl'f to place different values on them. The same thing could be said ah<ut the work of the subordinate staff. If under these cirrnmstances the respondent agreed to adopt a difft·rent mode of computation of dearness allowanco in respect of the employees in the sales office from that offered by it to th0 rmploJees in the factory, could it be said that thic> respondent was making invidious distinctiou? The sales office being a mercantile office the respondent had to fall in line with other similar establishments a.nd pay to the employees in the Eales office the same dea.rneEs allowance as other mercantile firms wero paying to their employees. In the cirlumot~nces the factory employees cannot as of right demand that the benefit of the rates fixed by the BPngal Chamber of Commerce be also given to them though those rates were not intended to be applied to them.

Moreover it has to be borne in mind that in the previous settlemf'nt the appellant-union was content to accept the working class cost of Jiving~ index as the basis for determining their dearness allowanc3 and even in their present demands they 1911 have alternatively Mggested that the same be Th. Work'"'" •f adopte<l with certain variations in the rates in W 1stern .111. •leh c,. three slabs. Ltd. •• Tl" W .,,,.,,,, lndi• It iS' true that the employees in Alambazar JI at ch Co, Ltd. as well as in Ci!.lcutta are living within the limits of the Corporation of Calcutta. But that circums-JIUtJutw J, tance thongh relevant is not by itself sufficient to justify payment to them of the same rate of dearness allowance as the sales office employees. We oannot ignore the fact that the employees of other factories situate in that area are not pa.id dearness allowance at the rates formulated by the Benga.1 Chamber of Commerce and, therefore, if those fates are' adopted by the respondent with respect to the factory emp-loyees tl:ie existing industrial peace in that region may be destroyed. The tribunal must, therefore, he said to have exercised its discretion properly in not· acceding to the appellant's demand in this i resrieot.

' We may also point out that the employees in the faotory have been recruited on terms and con-ditions which from the beginning are different from those that govern the sales office employees. It is not ' disputed that certain benefits such as those relating to rations, free quarters, gratuity etc., which are extended to the factory employees are not extended to the sales office employees. What is said, however, is that the sum total of these con· sidered along with the pay and dearness allowance of the factory employees still place them at a dis-advantage as compared to the sales office employees.

It is true that the sales office employees are, by and t large, in a comparatively better position; but that

again is due to the fact that recruitments in the two . establishments have all along been made on diffe· ~rent terms and conditions.

We do not think that there is any valid reason for compelling employers to offer uniform term.ii of

40 SUPRE.ME COURT REl'ORTS [1963]

employment to their employees working in different Th• lF erimtfl of establishments because various considerations must Wtsrtn• .. 1fotch Co. enter into the question such as the value of their

LUI.

work to the employer, the employei's ability to pay, Th, Wcr.e1n /,.dia the cost of living, tho 11.vailability of persons for Makh Co. LUI

doing the particular kind of work and so on. Mudholka• J. Indeed, the Minimum Wages Act itself proceeds on

the basis that the employer h11s large di•cretion in so far as the most important condition of service is concerned, that is, pay, so long a.t it is not below the miniro'um wage prescribed. It is a. well known fact, that the Hggest, employer, the State, does not offer uniform conditions of service to a.II cmployet>s doing work which, broadly speaking, mRy be ca.lied similar. Thus to take ont1 illustmtion, the clerical staff and the menial staff-now called class IV staff-employed in the Secretariat are go ;erncd by terms and conditions of service different from those prevailing in other offices such as those under the Delhi Administration. High powered Pay Commis. sions ban• not regarded this as discriminatory treat· ment or breach of a principle of industrial law. In the State of ;lfa.dhya Prude.sh v. G.C. Man<iawar (') it was contended on behalf of tho clerical staff in the State ol Madhya. l'ra.desh that they should be paid dearness allowance a.t the same r11.te a.s the Central Government employees posted in Madhya .t'radesh on the ground that they were doing similar work a.t the same place. 'J heir contention was, however, rejected by this Court.

Looking at the mstlcr thus we cannot say that the Industrial Tribunal in refusing to extend to the employees of the respondent in the factory in Alam-ba.za.r the benefit of dearness a.llowa.nce formulated ·by the Benga.l Chamber of Commerce has contra.ve-ned any prinoiple of natural justice or any important pdnoiple of industrial la.w. ID this connection we~

(I) (J9S5) I S,C,R. 599.

m~y refer to the. decision in Bengal Chemic~~ '!" 1962 Pharmaceutical Works Ltd., Calcutta v. '1 heir The W orkmm oJ Workmen (1) where Gajendragadkar, J., who spoke Jfestern Match Co. Ltd. fur the Court observed: v. The Western India "Though Article 136 is couched in widest M atek Co. Lid., terms, it is necessary for this Court to exercise Mudholkar J. its ctiscretionary jurisdiction only in cases wbure awards are made in violation of princi-ples of natural justice, causing substantial and grave injustice to parties or rairns an impor-tant principle of industrial law requiring eluci-dation and finoil decision by this Court or dis-closes such other exceptional or special cir-cumstances which merit the consideration of this Court."

Therefore, even assuming that an Industrial Tribu-nal has exercised its discretion wrongly in not awar-ding uniform dearness allowance to all the emp-loyees of the scime employer but who are working in different establishments, that is no ground for or interference under Art. 136.

The second ground on which the 'lribunal's decision regarding dearn,,ss allowance is challenged is that even at the stage of giving evidence Mr. Wasmouth, the General Manager of the respon-dent s11,id that the respondent still sticks to the offer regarding dearness allowance but despite that the Tribunal did not make any change in the dear-ness allowance. It is contended on the basis of this stand of Mr. Wasmouth that the respondent accepted the positiun that there was scope for rai-sing 'the dearness allowance.- In answer to this argument Mr. B. tien urged that the offer which the company had made was a package dea.l but since the appellant-union was not willing to accept the whole of the respondent's offer, the Tribunal was right in not granting any increase in the dearness ~-allowance. We may point out, however, that the

(I) (1959) Supp. 2 s.C.R. 136, 140.

1962 only outstanding questions between the parties wero Tlr1 Wor.+11t,n of two-one relating to tho dearneBB allowance and Jf tsl 11 n .. JI .. 1,1& Co. the other relating to the scales of pay. A compara-

~d. tive chart showing the union's dfmand and the com-TJ.1 SV1s1ern India pany's offer of the existing scales of pay, dearness JI orclt Co, Ltd. allowance, superannuation, casual leave, sick lcavo Mutlltollur J, and over-time has been placed on record and is

annexure G.I. We aro not concerned with matters other tha.n the first two and we, therefore, reproduce below only that portion of tho oho.rt which rela.tes to the first two of these matters: I Union's demand Company's offe~ Rs. Hs.

I. Grade &A I :J5/- 1/8/- 65/- (30 yrs.) 30/- 1/4/· 50--EB-1/4/- 55/- scales:or A 2 40/- 2/8/- 90/- ,, 35/- 1/4/- 55-EB-l/4/- 60/- pay A 3 60/- 3/8/- 130/- ,. 60/- 2/0/- 80/- B 1 65/- 5/0/- 115/.EB-7 /- 55/·4/0/- 95/- EB-5/- 125/- 185/-(20 yrs.) no offer C l 75/- 6/0/- 135/-EB-8/- 70/- 5/8/-125/- EB-7/- 215/- (20yrs.) 167/-EB-195/- C 2 95/- 8/0/- 175/-EB-12/- 85/-7/8/-160/- EB-10).

295/-(20 yrs.) 220/·EB-10/-260/- C 3 120/- 12/0/- 240/-EB-18/- 110/-10/-210/- EB-16/. 420/-(20 yrs.) 306/-EB-16/-370/- C 4 Upto a. limit of Rs. 650/- Upto a._ limit of RI. 500/-

A. As per sales office 1161 -I 2. Dear-Employees No offer Tlie W orkmtn

ness on W1s1trn M a1ch C1. 'I L1&. ••

allo-wa.nce Thi W11tern·lntli• Jlatcfl (,'1. Led. B. Rs. Rs. Jli.dhtlk•r .J.

l to 50/-basic 125%, l to 25/· basis 125%** 51 to 100 ., 25% , 26 to 50 ,, 40<y, 101 to 150 ,, 17% 51 to 150 ,, 30% 151 to 200 ,, 12% 151 to" 200 ,. 12% 201 to 250 ,, 7% 2,Jl to 250 ,, 7% 2!il to 300 ,, 5% 251 to 300 ,, 5%

In addition 3% for In addition 3% for

every 5 pts. rise every 5 pt11. rise or fail of work-or fail of work-ing class index ing class index figure. figure.

** Adjusting the existing R. B. with this salb.

It will be clear from this that the union had made alternative demands in respect of dearness allowance, one was that the same scale as that for sales office employees should be adopted and the other was variation in three slabs of the present scheme accepting as the basis. the working class cost of living index figure. The company refosed to make any counter-offer with regard to th1 primary demand of the appellant-union. But in regard to the alternative demand it made a.

counter-offer. If we understand Mr. Wasmouth right the respondent company stood by its counter-offer . based on the working class cost of living index figures before the Tribuna.l even thOUflh thl'

1961 conciliation proceedings broke down. During these

proceerlings this counter·oifor was linked with the 'Ill# Workin,n of crmnter·offe,r pertaining to grades and scales of pay. Wes 1tTn ,1Jatc1' C •.

l.14. Presumably, therefore, the company regarded the v. pa<'kage deal not merely as a concession made for T"4 W t1tpn lndi"

Match Co. Lid put ting an end to disputes but also because it Mudllelleor.), regarded it as fair and the financial commitment

ent.iiled by it to be within its mean~. No doubt in the evidence Mr. Wasmouth haa said that the rcsponrlent.-company does not !tick to its offer relating to grades and scales of pay. But that would not render wh~t was a fair and reasonable offer during the 11tal!e d negotiations, no longl'r fair and reasonable or neceBSary. The Tribunal has revised the pay scales on b'lsis of the respondent's offer. If, there· fore, dearness allowance is revised on the basis of the respondent's offer what would in effect be done would be only that whioh the res· pondeut company during the conciliation proceed-I ings had itsl'lf offered to do, a thing which was considered to be fair and reasonable and also necessary. In these circumstances we find it difficult to understand the principle on which the Tribunal proceeded in refusing to revise the scales of dearness allowance on the basis of the respond-ent-company's offer.

Though, therefor<', we reject the contention of the appellant-union that the <learne88 allowance should be fixed on the same basis as that obhining in the sales office we think that in view of the stand taken by the respondent-company throughout the proceedings dearness allowance should be revised in accordance with the oompa.ny's offer. The faot that it made such an offer is indicative of tw'o things : the neceBSity and propriety of revision of the dearness allowance as well as the ability of the respondent-company to pay higher dearness allowance. It was no doubt oontended before ns that the offer was m:i.ie during negotiat-1961 ioni and wa.~ without prejudice .and wo should The Worhntn c.J therefore, keep it out of our mind. But we ·cannot West1rn Matth overlook the fact that Mr. Wasmouth stuck to. that Ltd. v. offer even after the conciliation proceedings had Thi Western Tndt'• ended infructuously and thus in efl'ect revived the Match Co. Ltd. the original offer. Mudh,,l):ar J.

Mr. Sen, however, argued . that on the ha.sis of the decision in Burn &: Go. Ltd., v; · Their Employees(') th'lt a.n aw"rd of fndustrial . Tribunal cannot be reopened unless· it is established that there has been a change in 'the circumstances on the award is based and that since• there has been no such change the award of' 1955 pertaining to dearness allowance ought not to be revised. It is i true that an award cannot ordinarily be revised -1 unless there is a change of circumstances. But

here, there has been a change of circumstances because cost of living has admittedly gone up since then. This is so notorious a fact that we are entitled to take notice of it. The object of award-ing dearness allowance is to neutralise, at least partially, the rise. in the cost of living and in the circumstances the factory employees are entitled to say that the old basis needs to be revised. There is thus no substance in Mr. Sen's argument.

On the. question of the grades and scales of pay the contention of learned counsel is that the Tribunal has not applied its mind to the question bnt h'l<i mechanically accepted the respondent's offer. This statement is not wholly accurate.

No donbt the Tribunal htJ.s accepted as reasonablE.

the offur which the respondent has made ; but it-has given reasons far doing so. In its award the Tribunal Jias stated :

"The principal point made in support of ...; the ilemand is that the grades and scales of

pay are too short and. that they should be <•> [t956J s.c.R. 1a1.

1511 extended with such modifications as may Tira Worln:enoj appear nece88ary in the circumstances of the Ire t11n Na1c;h Co. caee."

/JJ, •• Then a.fti>r comparing the exi1ting grades with the 'Thi ,,,J:t•n lrziia company's offer tho Tribunal observed :

Ji •Uh C•. Ltd. "It would appear at a glance at this Mtt'h•lk•r J. chart that the existing rates provide for ace.Jes of pay in tho case of six, grades upto I 6 yea.rs end in the oaee of one it provides for ten years only. The Union·s demand is I for extending the scales upto 20 years in place of ten and sixt~en years, and both the minimum and maximum limit of the sea.lea of pay would be raised in all oases. The Company's offer except in the case of grade B( I) if much in advance of the existing grades and scales of pay. There are good j1rnt ificationR for revision of the grades and and sea.Jes of pay, nnd the Company's offer, in my opinion, should have been accepted by the Union. Tho revision of the grades and s~alt·• of pay as in the Company's off or will, to a great extent., remove the hardshipa of tho employees, who, for the present, must remain sadsfied with such revision.

It bas, therefore, applied its mind to tho company's offer and also borne in mind the demand me.do bv tho union. Upon consideration of these mattri"s the Tribune.I came to the <•onclusion that the com-pany's offer is a reasonable one. lte finding in this regard is one of fa.ct and cannot bo permittl'd to be challenged in an appeal under Art. 136.

In this view we allow the appeal partlJ and direct that tho awe.rd be modified by providing for a revision of the dearneBB allowance on the basis of tho company's offer. Subject to this modification, the 8iJpea.I will be difimisEed. In view of tho partial success of the parties we make no order as to costs.

--- Appeal allail'ed i11 part.