Delhi High Court
Indian Navigation Co. vs Works Thr Engineering Workers Lal ... on 7 August, 2015
Author: Pradeep Nandrajog
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on : August 06, 2015
Judgment Delivered on : August 07, 2015
+ LPA 49/2012
INDIAN NAVIGATION CO. .....Appellant
Represented by: Mr.Sanjoy Ghose, Advocate
versus
WORKS THR ENGINEERING
WORKERS LAL JHANDA UNION .....Respondent
Represented by: Mr.H.K.Chaturvedi, Advocate
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA
PRADEEP NANDRAJOG, J.
1. Two writ petitions No.15652/2004 and 15669/2004 filed by the
appellant have been dismissed by the learned Single Judge vide a common
order dated September 14, 2011. The appellant has filed the instant appeal
challenging the said order but only in relation to W.P.(C) No.15652/2004,
and thus we note the relevant facts concerning said writ petition.
2. Challenge by the appellant in W.P.(C) No.15652/2004 was to an
award dated November 25, 2003 under which the undernoted reference
made by the appropriate Government to the learned Industrial Tribunal
was decided:-
"Whether the workmen are entitled to annual increment, summer
and winter uniform, and house rent allowance and if so, what
directions are necessary in this respect."
3. In the statement of claim filed by the union of the Workmen it was
pleaded that the appellant had three category of workmen working under it
: (i) Unskilled workmen called helpers; (ii) Semi-skilled workmen called
Assistant Machine Man; and (iii) Skilled Workmen called Machine Man.
It was pleaded that the management used to give an annual increment of
`30/- per month, `35/- per month and between `40-`50/- per month to the
unskilled, semi-skilled and skilled workmen respectively. It was pleaded
that said increment was being since the year 1978. It was pleaded that the
Union demanded the increment to be enhanced to `50/-, `65/- and `75/-
per month each year. The grievance was that the appellant stopped paying
the annual increment since June, 1994. Summer and winter uniform was
also prayed for to be given by the management on the plea that the nature
of job performed by the workmen was of a kind where clothes get spoiled.
Without pleading that in the past house rent allowance used to be paid,
claim was made for house rent allowance on the plea that the management
had been assuring that house rent allowance would be paid.
4. In the reply to the statement of claim the appellant did not dispute
that in the past it had been giving an annual increment to the three category
of workmen at the rate pleaded in the statement of claim but pleaded
justification for not giving the increment in the year 1994 because in the
year 1994 minimum wages were increased very steeply by 35%. It was
pleaded that the management was paying wages at the rate notified under
the Minimum Wages Act. It was pleaded that due to steep rise in the
minimum wages notified under the Minimum Wages Act by 35% the
management suffered losses. It was pleaded that the paying capacity of the
appellant did not warrant the claim of the workmen to be accepted.
5. Accepting the claim of the workmen of being entitled to annual
increment, the reasoning of the learned Labour Court in the award is as
under:-
"12. In the present case, as discussed above, the management
had been giving the increment to `30/- to `50/- to the categories
of employees; `30/- to unskilled workers, `45/- to semi skilled
workers and `50/- to skilled workers from the year of 1978 to
1994. The last increment was granted in the year of 1993 and
the workers raised their charter of demands claiming the
enhancement of annual increment to `50/- to unskilled workers,
`65/- to semi skilled workers and `75/- to skilled workers and
the management instead of enhancing the rate of increment
rather stopped giving the increments. The management has not
given any reasoning for stopping the increments except that
there was revision of minimum wages in the year of 1994 and in
which there was about 35% enhancement in the wages, due to
which the management suffered heavy financial losses. It is
established on the record that the management had paid the
bonus @ 15% where the rate under the statute was of 8.33%.
Even otherwise I am not agreeable with the argument advanced
by the management that the revising of minimum pay could be
taken to the disadvantage to the workers by stopping their
annual increments. The second limb of argument, advanced by
management that it is the sweetwill of the management to grant
the increment to the individual on the basis of job performance,
punctuality, discipline and loyalty towards work and it is not to
be granted to all the workers. In other words, the non-grant of
increment is rule and granting of increment is exception. I am
not agreeable with the argument advanced by management. I
am of the consider opinion that the grant of the increment is rule
and non grant is exception for which the cause could be of non-
performance of job, inpunctuality, indiscipline and non-loyalty to
the work. It is established in the present case that the annual
increments were being granted since 1978 to 1994 and it was
stopped in June 1994 as the workmen asked to enhance the rate
of increment. It is admitted case of the management that there
was enhancement in the minimum wages which shows that the
Price Index increased sharply due to which the minimum pay
had to be revised by the government. Under the circumstances
the workmen were entitled for enhancement of the rate of annual
increment whereas management instead of enhancing, rather
stopped the grant of annual increments already being given to
them from 1978 till 1994."
6. Accepting the plea of the workmen that the nature of the work
performed by them soiled and spoiled their clothes it was directed that the
management would have to provide two uniforms, one for winter and the
other for summer along with a pair of shoes annually. House rent
allowance claimed was denied under the award.
7. The Union accepted the award and the management challenged the
same.
8. The learned Single Judge has dismissed the writ petition filed by the
appellant by simply observing that the balance sheet of the appellant for
the year 2008-09 evinced profit.
9. While issuing notice in the appeal, the Division Bench noted as per
the order dated January 23, 2012 as under:-
"The workers of the appellant/Management had raised the
industrial dispute demanding increments, uniforms etc. It was
referred to the Industrial Tribunal which passed the award dated
25.11.2003 granting annual increments of `50/- to unskilled
workers, `65/- to semi-skilled workers and `75/- to skilled
workers with effect from 1994. In addition to this, one winter and
one summer uniform as well as one pair of shoes
were directed to be provided to the workers. Challenging the
ward, the appellant had filed the writ petitions which have been
dismissed by the learned Single Judge vide impugned order
dated 14.09.2011.
2. We may also place on record that the
appellant/Management was paying increments at the rate of
`30/-, `45/- and `50/- to unskilled, semi-skilled and skilled
categories of workers respectively. The case setup by the
appellant challenging the demands of the workers was that
there was substantial increase in minimum wages, almost by 5%,
and since minimum wages had to be necessarily paid, the
appellant was not able to bear this financial burden and had
started running into losses. To put it otherwise, the appellant had
raised the contention that it had no means or capacity to pay the
increment amount.
3. We find from the award passed by the Tribunal that this aspect
has not been duly gone into by the Tribunal. The Tribunal has
simply taken into consideration the facts that the appellant was
paying the increments earlier and it could not stop the same
merely because minimum wages had increased. Prima facie, it
appears that without giving any reasons, the rate of increments
was increased. The learned Single Judge on the other hand has
gone by the fact that the workforce of the appellant which was
more than 200 earlier is reduced to only 19 and the balance
sheet for the year 2008-09 shows profits and therefore it may not
be difficult for the appellant to bear the burden of increments etc.
for 19 workers.
4. The contention of the learned senior counsel for the
appellant is that the balance sheet of one year in which year the
appellant has earned profits could not be the yardstick for
determining the issue as the burden would be recurring every
year. The contention is that otherwise there were losses in
previous years and even for the year 2008-09 if the increments
are given it will wipe out the entire profit."
10. Now, it is not the case of the workmen that the annual increments
being paid to them were pursuant to any settlement. The claim of the
workmen was on the past practice followed by the appellant.
11. In the past the appellant was not only paying wages to its workmen
more than the minimum wages notified under the Minimum Wages Act but
was also giving annual increments since the year 1978, but stopped the
annual increment in June, 1994 since according to the appellant there was a
very steep increase in the minimum wages notified under the Minimum
Wages Act. As per the appellant the impact of the steep increase in
minimum wages was its finances going haywire.
12. It is not the case of the workmen that they are being paid wages less
than the one notified under the Minimum Wages Act.
13. The concept of „adjudication‟ of an industrial dispute by an
Industrial Tribunal was first explained by the Federal Court in the decision
reported as 1949 FCR 321 Western India Automobiles Association v
Industrial Tribunal, Bombay & Ors in the following terms:-
"Adjudication does not in our opinion mean adjudication
according to the strict law of master and servant. The award of
the tribunal may contain provisions for settlement of a dispute
which no court could order if it was bound by ordinary law, but
the tribunal is not fettered in any way by these limitations. In
Volume I of "Labour Disputes and Collective Bargaining" by
Ludwig Teller, it is said at page 536 that industrial arbitration
may involve the extension of an existing agreement or making of
a new one, or in general creation of a new obligation or
modification of old ones, while commercial arbitration generally
concerns itself with interpretation of existing obligations and
disputes relating to existing agreements. In our opinion, it is a
true statement about the functions of an industrial tribunal in
labour disputes."
14. In the decision reported as AIR 1950 SC 188 Bharat Bank Ltd,
Delhi v The Employees of the Bharat Bank Ltd, Delhi the Supreme Court
observed as under:-
"We would not examine the process by which an Industrial
Tribunal comes to its decisions and I have no hesitation in
holding that the process employed is not judicial process at all.
In settling the disputes between the employers and the workmen,
the function of the Tribunal is not confined to administration of
justice in accordance with law. It can confer rights and
privileges on either party which it considers reasonable and
proper, though they may not be within the terms of any existing
agreement. It has not merely to interpret or give effect to the
contractual rights and obligations of the parties. It can create
new rights and obligations between them which it considers
essential for keeping industrial peace. An industrial dispute as
has been said on many occasions is nothing but a trial of
strength between the employers on the one hand and the
workmen's organization on the other and the Industrial Tribunal
has got to arrive at some equitable arrangement for averting
strikes and lock-outs which impede production of goods and the
industrial development of the country. The Tribunal is not bound
by the rigid rules of law. The process it employees is rather an
extended form of the process of collective bargaining and is
more akin to administrative than to judicial function."
(Emphasis Supplied)
15. In the decision reported as AIR 1961 SC 867 New Maneckchowk
SPG & WVG Co Ltd v Textile Labour Association, Ahemdabad the
Supreme Court summarized the law relating to industrial adjudication in
the following terms:-
"There is no doubt therefore that it is open to an industrial court
in an appropriate case to impose new obligations on the parties
before it or modify contracts in the interests of industrial peace
or give awards which may have the effect of extending existing
agreement or making a new one".
(Emphasis Supplied)
16. It was the duty of the Tribunal to have, on the principle of industry-
cum-region, determined the wages and for which it ought to have taken
guidance from the decision reported as AIR 1972 SC 2332 M/s Unichem
Laboratories Ltd v The Workmen wherein it was held:-
"From the decisions, referred above, it follows that two
principal factors which must weigh while fixing or revising wage
scales and grades are: (1) How the wages prevailing in the
establishment in question compare with those given to the
workmen of similar grade and scale by similar establishments in
the same industry or in their absence in similar establishments in
other industries in the region; and (2) What wage scales the
establishment in question can pay without undue strain on its
financial resources. The same principles substantially apply
when fixing or revising the dearness allowance."
17. Concededly the learned Industrial Tribunal has not decided the real
issue which it had to decide i.e. whether the appellant had means or
capacity to pay the increment amount and what was the current prevailing
wages in establishments of the like kind.
18. The error committed by the learned Single Judge is very pithily
noted by the Division Bench of this Court in paragraph 3 and paragraph 4
of the order dated January 23, 2012 when notice was issued in the appeal
and we concur because learned counsel for the respondent had nothing to
argue to decimate said prima-facie opinion recorded by the Division Bench
while issuing notice in the appeal.
19. Under the circumstances the only course available is to remand the
matter to the learned Industrial Tribunal for adjudication afresh.
20. The appeal is allowed. Impugned order dated September 14, 2011
dismissing W.P.(C) No.15652/2004 is set aside and W.P.(C)
No.15652/2004 is disposed of setting aside the award dated November 25,
2003 and simultaneously restoring ID No.37/12994 for adjudication afresh
by Industrial Tribunal-II. The learned presiding officer of the Industrial
Tribunal shall answer the reference made to the Tribunal keeping in view
the present decision and shall decide the reference afresh within one year
of receipt of the present decision.
21. The Registry is directed to send a certified copy of the present
decision to the Presiding Officer of the Industrial Tribunal-II.
22. Parties shall bear their own costs all throughout.
(PRADEEP NANDRAJOG)
JUDGE
(MUKTA GUPTA)
JUDGE
AUGUST 07, 2015
mamta
