Gujarat High Court
A C Nielsen Org-Marg Private Limited vs Operation Research Group Employees ... on 2 February, 2024
Author: Sunita Agarwal
Bench: Sunita Agarwal
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 14141 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
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1 Whether Reporters of Local Papers may be No
allowed to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair No
copy of the judgment ?
4 Whether this case involves a substantial No
question of law as to the interpretation of
the Constitution of India or any order made
thereunder ?
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A C NIELSEN ORG-MARG PRIVATE LIMITED
Versus
OPERATION RESEARCH GROUP EMPLOYEES UNION & 1 other(s)
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Appearance:
MR K.M. PATEL, SENIOR COUNSEL WITH MR KEYUR GANDHI, MR NISARG
DESAI AND MS PRAVALIKHA BATTHINI FOR GANDHI LAW ASSOCIATES
(12275) for the Petitioner(s) No.1
MR SHALIN MEHTA, SENIOR COUNSEL WITH MS ADITI S RAOL(8128) for
the Respondent(s) No.1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
Date : 02/02/2024
CAV JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
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1. The petitioner herein is challenging the award
dated 24.03.2014 passed by the Industrial Tribunal,
Vadodara (in short 'the Tribunal') in Reference (IT)
No.56 of 2005 whereby while partly allowing the
reference, the following benefits have been accorded
to the workmen :-
"(1) The first party is hereby ordered to
pay Rs.550/- towards fixed dearness allowance
upto consumer rate 539 with effect from
31.05.2005 within 30 days from the date of
declaring this judgment and pay Rs.2/-
dearness allowance on every increment of
point of consumer rate 539.
(2) The first party is hereby ordered to
permit the applicant to accumulate earned
leave upto 180 days and sick leave up to 60
days from the date of this judgment.
(3) The other demand of this dispute of the
applicant is hereby rejected.
(4) The first party institution is hereby
ordered to pay Rs.5000/- (Rupees Five
Thousand only) to the applicant union towards
the cost of this reference."
2. The dispute raised in the instant petition is
mainly to the acceptance of the demand of Dearness
Allowance (D.A.) by the Tribunal at the above rates.
No contentions have been raised with regard to the
grant of accumulated earned leave upto 180 days and
sick leave upto 60 days from the date of the
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judgment. At the outset, we may note that there is no
interim order in the instant petition, i.e. the
effect and implementation of the Tribunal's award has
not been stayed by this Court. On a query made by the
Court as to whether payments under the award have
been made to the workers, the learned Senior Counsel
for the petitioner would admit that the execution of
the award is pending as on date and no payments under
the award to the workers have been made.
3. The main ground of challenge to the grant of
Dearness Allowance under the impugned award is that
the award is substantially based on a settlement
dated 03.11.1988 under Section 2(p) of the Industrial
Disputes Act, 1947 ('I.D.Act, 1947' in short). The
terms of the said settlement which was arrived
between the representatives of the workmen namely
Consolidated Staff Association and the Company, with
respect to the demand pertaining to D.A./Compensatory
Allowance are relevant to be noted hereinunder :-
"(4) As regards Demand No.3 pertaining to
D.A./Compensatory Allowance, it is agreed by
and between the parties as under :-
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(a) As at present over the average detum
index base of 539 Consumer Price Index
Number, the company is paying Rs.550/-
per month as fixed D.A. The company will
continue to pay the same amount of fixed
D.A. at the rate of Rs.550/- per month on
the detum Index of 539.
(b) Beyond the average detum consumer
price index number 539, the company is at
present paying Re.1/- per point of rise
as variable D.A./Compensatory Allowance.
Effective from 1st April 1988, the company
will pay Rs.2/- per point of rise of
consumer price index number beyond 539
instead of Re.1/- as at present."
4. It may be noted that an award dated 29.12.1989
was passed in terms of the settlement dated 03.11.1988
and the finding of the Tribunal is that the said
settlement would remain binding on the company under
Sections 18 and 19 of the I.D. Act, 1947. The findings
of the Tribunal in the impugned award is that as per
the above noted provisions of the compromise, the
payment of Dearness Allowance was being made to the
workmen uptil May, 1999. Thereafter, the petitioner
employer had started payment of consolidated salary
and as per the stand of the workmen, it had illegally
stopped payment of Dearness Allowance. The Tribunal
taking note of Section 18 of the I.D. Act, 1947 has
further noted that the award dated 29.12.1989 of the
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Industrial Tribunal/Labour Court is binding on the
heirs, successors and assignees in respect of the
petitioner establishment. The petitioner employer
being the successor of the original company is bound
by the terms of settlement incorporated in the award
dated 29.12.1989 and, thus, the petitioner employer is
responsible to pay Dearness Allowance mentioned in
Clause 4 of the compromise award arrived between the
then Company and its workmen. The stand of the
petitioner Company that it had merged the Dearness
Allowance into the basic salary based on the letters
written to the individual workman (10 in number)
marked as Exhibit-34/8 to 34/17 were taken into
consideration to note that details therein cannot be
understood to accept the stand of the petitioner
employer of restructuring of the salary. As per the
statement in the said communications, City
Compensatory Allowance was merged with the basic pay
from 01.04.1999. The said variation in the terms and
conditions of the award dated 29.12.1989 had not been
preceded with 21 days mandatory notice under Section
9A of the I.D. Act, 1947.
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5. It was concluded by the Tribunal that the
petitioner employers were required to issue notice of
change in Form No.13 to the workmen and its Union and
after issuing such notice of change, they could have
taken action for amendment in the terms and
conditions of the employment only after expiry of 21
days from the date of the notice. The result is that
without implementing the mandatory provisions of
Section 9A of the I.D.Act, 1947, the employer had
made illegal amendment in the wage or the method to
provide wage. The Tribunal had further examined the
audited balance-sheets produced by the employer from
the year 2001-02 to 2004-05 and noted that the
petitioner employer had made profits year to year. It
was also noted that the employer had not proved the
fact that instead of getting the financial benefits
of Dearness Allowance as per the award dated
29.12.1989, the workmen have been getting more
benefits through the consolidated pay hike. The
employer has not produced the detailed calculation
that on which standard the yearly pay was increased,
in the basic pay. It was held that because of
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stoppage of the benefits of D.A./Compensatory
Allowance which were earlier connected with the
Dearness Allowance, adverse inference was being
caused on the benefits admissible to the employees.
The principle to pay Dearness Allowance connected
with the rate of the Dearness Allowance has been
approved as per the Minimum Wages Act, 1948 and
through the compromise/award with respect to the
same. It was further noted that till April, 1999, the
employer had been paying such benefits to the
employees being legally responsible to pay the same,
and, therefore, there was no question of additional
economic burden upon the employer. The Tribunal,
thus, had directed the employer to pay Dearness
Allowance as per the terms of the award dated
29.12.1989 with effect from the date of filing of the
reference i.e. 31.05.2005.
6. Having noted the above, we may record that the
only submission of the learned Senior Counsel
appearing for the petitioner employer to challenge
the above noted finding of the award is that there
was a merger of D.A./Compensatory Allowance into the
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basic pay and that was duly intimated to the
individual workman through the letters which were
produced in evidence before the Tribunal and marked
as Exhibit-34/8 to 34/17. One of such letters at page
'135' of the paper-book addressed to a workman has
been placed before us to vehemently urge that the
merger of City Compensatory Allowance (CCA) with the
basic salary, the demand of the workmen for the
Dearness Allowance could not have been acceded to.
Taking note of the rate at which the Dearness
Allowance was permitted in view of the terms of
settlement/award dated 29.12.1989, we may record that
the City Compensatory Allowance (CCA) which is shown
as a fixed amount of Rs.840/- per annum in the
statement of gross earning per annum of the workmen,
intimated through the letter dated 12.04.1999 (page
'136' of the paper-book) cannot be confused with the
Dearness Allowance/ Compensatory Allowance, which was
agreed between the then Company and the
representatives of the workmen in the settlement
dated 13.09.1988, in terms of which the award dated
29.12.1989 was made.
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7. The contention of the learned Senior Counsel for
the petitioner to assail the grant of Dearness
Allowance by the Tribunal on the premise of merger of
City Compensatory Allowance with the basic pay,
therefore, is liable to be turned down. As noted
hereinabove, the employer did not prove by bringing
any cogent evidence before the Tribunal such as
detailed calculation of the standards on which yearly
pay had been increased, the financial benefits which
were made admissible through the consolidated pay
hike to demonstrate that the workmen have been
getting more benefits through the merger. These
findings returned by the Tribunal could not be
assailed before us. The conclusion of the Tribunal
that the petitioner employer had illegally changed
the service condition of the workmen without any
notice as against the mandatory requirement of
Section 9A of the I.D. Act, 1947, therefore, is
liable to be affirmed. The fact remains that as per
the settlement award dated 29.12.1989, the petitioner
employer was paying Dearness Allowance to the workmen
till the month of April, 1999. The stoppage of
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Dearness Allowance with effect from the month of May,
1999 simply on the premise of inclusion of City
Compensatory Allowance into the basic pay is an
illegal act on the part of the petitioner employer.
8. It is pertinent to note that the rate at which
Dearness Allowance has been acceded to by the
Tribunal is the same at which it was granted on an
agreement between the employer and the workmen in the
year 1988. No payment towards the Dearness Allowance
has been directed to be made from May, 1999 till the
date of reference i.e. 31.05.2005. No error,
therefore, can be found in the order of the Tribunal
in holding that the settlement dated 03.11.1988 was
binding on both the employer and the workmen.
Further, the contention in the draft amendment is
that the Tribunal has failed to appreciate that the
term of settlement was one year beyond the date
stipulated by the parties and the award expired on
the expiry of two months from the date of termination
mentioned in the notice by the employer which is at
page '135' of the paper-book. The submission that the
notice dated 12.04.1999 given to the individual
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worker would be a notice contemplated by Section
19(6) of the I.D.Act, 1947 is found to be
misconceived. We may record that individual notice to
the workman that too of merger of City Compensatory
Allowance into the basic pay and the structure of
gross earning per annum mentioned in the said notice,
would not amount to termination of the award as per
Section 19(6) of the I.D.Act, 1947. The submissions
in this regard are found misconceived and are liable
to be rejected on a mere reading of Section 19(7) of
the I.D.Act, 1947 which states that no notice under
sub-section (6) shall have effect unless it is given
by a party representing the majority of persons bound
by the settlement or award, as the case may be.
Individual notices given to ten (10) workmen marked
as Exhibit 34/8 to 34/17 cannot be considered as
notice of termination of award in terms of Section
19(6), inasmuch as, the settlement award was between
the representatives of the majority of workers who
have not been put to notice in accordance with the
provisions of sub-section (7) of Section 19 of the
I.D. Act, 1947.
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9. The last argument of the learned Senior Counsel
for the petitioner that it was a case of wage
fixation and in view of the well recognized
principles of wage fixation, it is settled that while
fixing fair wages, the Tribunal has to apply the
principles of 'industry-cum-region' and the
additional financial burden on the employer. While
passing the award issuing direction to pay Dearness
Allowance with effect from 31.05.2005, the Tribunal
has completely ignored that the same would cause
additional financial burden on the employer. This
submission is found to be wholly misconceived,
inasmuch as, as per the settlement dated 13.09.1988
arrived between the representatives of the workers
and the employer Company under Section 2(p) of the
I.D. Act, 1947, the Dearness Allowance/Compensatory
Allowance was part of the wage structure.
10. A perusal of the settlement indicates that in
the general meeting of the workmen held on
26.10.1988, five representatives were elected to
negotiate and finalize the settlement with the
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company pursuant to the charter of demands raised by
the Workmen Association. The direction towards payment
of Dearness Allowance/Compensatory Allowance to the
workmen as contained in the award dated 29.12.1989 was
in terms of the said settlement only. The result is
that the condition which was agreed between the
parties, i.e. the employer and the workmen in the year
1988 has been asserted by the Tribunal to grant
benefits to the workmen as agreed by the employer,
that too from the date of the reference i.e.
31.05.2005. No error, thus, can be found in the
findings of the Tribunal that this position would not
cause additional financial benefits to the employer
as the Dearness Allowance was part of the financial
benefits which were liable to be paid by the employer
in terms of the settlement award dated 29.12.1989 and
which were actually been paid till April, 1999. The
assertion with regard to the stoppage of the said
financial benefits on the part of the employer has
been rightly found to be incorrect and illegal.
11. We may reiterate, at this juncture, that the
employers are guilty in not complying with the
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impugned award dated 24.03.2014 for a period of about
ten years, though there is no interim order in their
favour. The implementation and execution of the award
has not been stayed by this Court in the instant
petition. In view of the above discussion, as we do
not find any good ground to interfere in the award
passed by the Tribunal dated 24.03.2014 in Reference
(IT) No.56 of 2005, we dismiss the writ petition
being devoid of merits. The respondent workmen are
entitled to seek execution of the award as per law.
No order as to costs.
(SUNITA AGARWAL, CJ )
(ANIRUDDHA P. MAYEE, J)
GAURAV J THAKER
