TMI Blog1965 (4) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 7B of the Industrial Disputes Act, 1947, constituted a national industrial tribunal with Justice Sri K. T. Desai (later Chief Justice of the Gujarat High Court) as the presiding officer. By an order notified under No. S. O. 707 of the same date, Central Government, in exercise of the powers conferred by Sub-sec. (1A) of Section 10 of the Industrial Disputes Act, referred an industrial dispute, which, in its opinion, existed between the Reserve Bank and its workmen of the three classes abovementioned. The order of reference specified the heads of dispute in two schedules, the first in respect of class II and class III staff and the second in respect of class IV staff. The first Schedule I consisted of 22 items and Sch. II of 23 items. These items (a considerable number of which are common to the two schedules) bear upon the scales of pay and dearness and other allowances and sundry matters conn minimum of ₹ 25 and for 25 per cent of the basic pay to the employees of the two higher classes, with effect from July 1959, but this was refused by an interim award dated 29 December 1960. The final award was delivered on 8 September 1962 because in the meantime the tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1,800, 1,100 and 1,100 respectively at Calcutta, New Delhi and Madras and the rest were distributed in varying numbers among the remaining twelve branches. The present dispute has a long history into the details of which it is hardly necessary to go but as both sides have made reference to it, some of the leading events connected with bank disputes in general and the present dispute respecting the Reserve Bank, in particular, may be mentioned. As is well-known, there has been a rise in the prices of commodities since 1939 and workmen earning wages and persons in the fixed income groups are specially affected. Between the years 1946 and 1949 there were set up numerous commissions and tribunals to deal with disputes between the commercial banks and their employees. In 1946 strike notices were served on many banks in Bombay, Bengal and the United Provinces. In Bombay Sri H. V. Divatia dealt with a dispute between the Bank of India and its employees, happily settled by consent (15 August 1946) and again with a dispute between 30 named Banks in Bombay and their employees. The award was given on 9 April 1947. That award was extended to Ahmedabad Bank employees by another award publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 1953, the association in May of the same year delivered a revised charter of demands to the Reserve Bank but owing to the pendency of the appeal before the Labour Appellate Tribunal, the demand could not be considered. The Reserve Bank, however, assured its employees that after the decision of the Labour Appellate Tribunal was known, the entire question would be reviewed. When the Labour Appellate Tribunal gave its decision in April 1954, the association served a fresh charter of demands on 18 May 1954, but the decision of the Appellate Tribunal was modified by Government and on 17 September 1954 a commission presided over by Justice Sri Rajadhyaksha and later by Justice Sri Gajendragadkar (as he then was) was constituted to consider whether the Appellate Tribunal's decision should be restored or continued with modifications and to suggest further modifications having due regard to the overall condition of banks in general and individual banks in particular. In October 1954 the association, realizing that delay was inevitable, agreed to accept the scales of pay on the basis of the modified Labour Appellate Tribunal's decision though he employees obtained by the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1949=100 had increased by 26 points in February 1960 and the principles of minimum and fair wages were deliberated upon and adverted to in the Report of the Fifteenth Indian Labour Conference. These principles, to which detailed reference will be made presently, were desired by the employees of the Reserve Bank to be put into operation. As a result the gap between the demands of the employees and the offers of the Reserve Bank, which was wide already, became wider still and conciliation, which had always succeeded in the past, was not possible. The association suggested arbitration but the Reserve Bank by its letter dated 11 February 1960 did not agree. The Reserve Bank stated that it did not wish to get seriously out of step with Government or the commercial banks. The Reserve Bank referred to the Pay Commission Report and pointed out that the demands of the employees took no notice of the state of Indian economy. The association, through its secretary, in reply (22 February 1960), observed : Your criticism, that the association's charter of demands has been pitched so high as to exclude all scope for satisfactory solution through negotiations, we may point out, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay and Calcutta) ₹ 450-25-650. 4. Deputy treasurer (Gauhati) ₹ 375-25-550. 5. Assistant treasurers ₹ 300-25-450. 6. Personal Assistant to the Governor ₹ 320-30-650. 7. Personal Assistant ₹ 325-25-550. 8. Caretakers, Grade I (Bombay and Calcutta) ₹ 275-10-325-E. B.-12 1/2-400. 9. Staff Assistant ₹ 250-25-450-E. B.-25-650. 10. Supervisor, Premises Section ₹ 250-15-310-E. B.-20-650. 11. Deputy Treasurer (Hyderabad) ₹ 350-25-500. There was in addition local pay for these employees equal to 10 per cent of pay, at Bombay, Calcutta, Ahmedabad, New Delhi, Madras and Kanpur. There was also a family allowance of ₹ 10 per child subject to a maximum of ₹ 30 for employees drawing less than ₹ 550 per month with a completed service of 5 years. The National Tribunal in considering the demands of class II staff of the Reserve Bank came to the conclusion that it could not give any award regarding these employees who were employed in a supervisory capacity. In this connexion the Reserve Bank had pleaded that the reference concerned only those employees who came within the definition of workman in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencing at ₹ 500 and that if the demand were considered favourably, every one in that class would cease to be a workman and such an award was beyond its jurisdiction to make. The national tribunal held that even though by reason of community of interest other workmen might be entitled, having regard to the definition of industrial dispute, to raise a dispute on behalf of others, they could not raise a dispute either for themselves or on behalf of others, when the dispute would involve consideration of matters in relation to non-workmen. The national tribunal also held that it would even be beyond the jurisdiction of Central Government to refer such a dispute under the Industrial Disputes Act. The national tribunal, therefore, held that the expression scales of pay and methods of adjustment in the scales of pay in Sch. I of the present reference could not cover non-workmen such as supervisory staff in class II. Those employed in supervisory capacity and drawing more than ₹ 500 per month were treated as not present before the national tribunal and as they could not be heard, the national tribunal found it inexpedient to fix scales of salary affecting them. As rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d workmen, or between workmen and workmen, which is connected with the employment or nonemployment or the terms of employment or with the condition of labour, of any person; . . . . . . . . . . (rr) wages means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment, and includes - (i) such allowances (including dearness allowances) as the workman is for the time being entitled to; (ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles; (iii) any travelling concession; but does not include - (a) any bonus; (b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force; (c) any gratuity payable on the termination of his service. (s) workman means any person (including an apprentice) employed in any industry to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions such as work and capacity for that a supervisor doing work enjoys the status of labour and a supervisor acting only in supervisory capacity enjoys the status of employer's agent at the lowest level. In support of his contention Mr. Chari has referred to the amendment of the National Labour Relations Act of the United States of America [commonly known as the Wagner Act] by the Labour-Management Relations Act 1947 [commonly known as the Taft-Hartley Act] and the case of the Packard Motor Company v. National Labour Relations Board which preceded the amendment. The Packard Motor Company case arose under the Wagner Act and the question was whether foremen were entitled as a class to the rights of self-organisation and collective bargaining under it. The benefits of the Wagner Act were conferred on employees which by Section 2(3) included 'any employee.' The company, however, sought to limit this wide definition which made foremen employees both at common law and in common acceptance, with the aid of the definition of 'employer' in Section 2(2) which said that the word included any person acting in the interest of an employer directly or indirectly... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t area where the operatives (to use a neutral term) seem to enjoy a dual capacity. The argument is extremely ingenious and the simile interesting, but it misses the realities of the amendment of the Industrial Disputes Act in 1956. The definition of 'workman' as it originally stood before the amendment in 1956 was as follows - 2.(s) 'workman' means any person employed (including an apprentice) in any industry to do any skilled or unskilled manual or clerical work for hire or reward and includes, for the purposes of any proceedings under this Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in naval, military or air service of the Government. The amending Act of 1956 introduced among the categories of persons already mentioned persons employed to do supervisory and technical work. So far the language of the earlier enactment was used. When, however, exceptions were engrafted, that language was departed from in Cl. (iv) partly because the draftsman followed the language of Cl. (iii) and partly because from persons employed on supervision work some are to be excluded because they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight in ignoring that class altogether. Further, the national tribunal was not justified in holding that if at a future time an incumbent would draw wage in the time scale in excess of ₹ 500, the matter must be taken to be withdrawn from the jurisdiction of the Central Government to make a reference in respect of him and the national tribunal to be ousted of the jurisdiction to decide the dispute if referred. Supervisory staff drawing less than ₹ 500 per month cannot be debarred from claiming that they should draw more than ₹ 500 presently or at some future stage in their service. They can only be deprived of the benefits if they are non-workmen at the time they seek the protection of the Industrial Disputes Act. Mr. Chari next contends that considering the duties of class II employees, it cannot be said that they are employed in a supervisory capacity at all and in elucidation of the meaning to be given to the words 'supervisory' and 'capacity' he has cited numerous dictionaries, Corpus Juris, etc., as to the meaning of the words supervise , supervisor , supervising , supervision , etc. etc. The word supervise and its derivatives are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on the following observations from the case of this Court : Can it be said that workmen as a class are directly or substantially interested in the employment, non-employment, terms of employment or conditions of labour of persons who belong to the supervisory staff and are, under provisions of the Act, non-workmen on whom the Act has conferred no benefit, who cannot by themselves be parties to an industrial dispute and for whose representation the Act makes no particular provision ? We venture to think that the answer must be in the negative. It may, however, be said that if the dispute is regarding employment, non-employment, terms of employment or conditions of labour of nonworkmen in which workmen are themselves vitally interested, the workmen may be able to raise an industrial dispute. Workmen can, for example, raise a dispute that a class of employees not within the definition of workman should be recruited by promotion from workmen. When they do so, the workmen raise a dispute about the terms of their own employment though incidentally the terms of employment of those who are not workmen is involved. But workmen cannot take up a dispute in respect of a class of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork in a bank involves layer upon layer of checkers and checking is hardly supervision but where there is a power of assigning duties and distribution of work there is supervision. In Lloyds Bank, Ltd. v. Pannalal Gupta, [1961] 1 L.L.J. 18 the finding of the Labour Appellate Tribunal was reversed because the legal inference from proved facts was wrongly drawn. It is pointed out there that before a clerk can claim a special allowance under Para 164(b) of the Sastri award open to supervisors, he must prove that he supervises the work of some others who are in a sense below him. It is pointed out that mere checking of the work of others is not enough, because this checking is a part of accounting and not of supervision and the work done in the audit department of a bank is not supervision. The Reserve Bank has placed on record extract from the manuals, orders, etc., relative to all class II employees and on looking closely into these duties we cannot say that they are not of a supervisory character and are merely clerical or checking. These employees distribute work, detect faults, report for penalty, make arrangements for filling vacancies, to mention only a few of the duties whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wages by comparison were more generous and represented a wage which lay between the minimum wage and the living wage. The United Provinces Labour Enquiry Committee classified the levels of living as (i) Poverty level, (ii) minimum subsistence level; (iii) subsistence plus level, and (iv) comfort level. The concept of fair wages involves a rate sufficiently high to enable the worker to provide a standard family with food, shelter, clothing, medical care and education of children appropriate to his status in life but not at a rate exceeding the wage earning capacity of the class of establishment concerned. A fair wage thus is related to a fair workload and the earning capacity. The living wage concept is one or more steps higher than fair wage. It is customary to quote Justice Mr. Higgins of Australia who defined it as one appropriate for the normal needs of average employee, regarded as a human being living in a civilized community. He explained himself by saying that the living wage must provide not merely for absolute essentials such as food, shelter and clothing but for a condition of frugal comfort estimated by current human standards including provision fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Clothing requirements should be estimated at a per capita consumption of 18 yards per annum which would give for the average worker's family of four, a total of 72 yards. (iv) In respect of housing, the norm should be the minimum rent charged by Government in any area for houses provided under the Subsidised Industrial Housing Scheme for low income groups. (v) Fuel, lighting and other 'miscellaneous' items of expenditure should constitute 20 per cent of the total minimum wage. (3) While agreeing to these guide lines for fixation of the minimum wage for industrial workers throughout the country, the committee recognized the existence of instanced in implementing these recommendations. Wherever the minimum wage fixed went below the recommendations, it would be incumbent on the authorities concerned to justify the circumstances which prevented them from the adherence to the norms laid down. . . . . . . . . . . The Association and the Union desire that the wage-floor should be the need-based minimum determined at the tripartite conference in the above resolution and that the emoluments of the middle class staff should be determined with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Association and the union contend that the national tribunal ought to have accepted the tripartite resolution and determined the basic wage in accordance therewith. The National Tribunal in adjudicating on this part of the case referred to the Crown Aluminium Works v. Workmen [1958] 1 L.L.J. 1 where at page 6 this Court observes Though social and economic justice is the ultimate ideal of industrial adjudication, its immediate objective in an industrial dispute as to the wage structure is to settle the dispute by constituting such a wage structure as would do justice to the interests of both labour and capital, would establish harmony between them and lead to their genuine and wholehearted co-operation in the task of production... in achieving this immediate objective, industrial adjudication takes into account several principles, such as, for instance, the principle of comparable wages, productivity of the trade or industry, cost of living and ability of the industry to pay...... In deciding industrial disputes in regard to wage structure, one of the primary objectives is and has to be the restoration of peace and goodwill in the industry itself on a fair and just basis to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or the net intake of 2700 calories at all ages pointing out that this much food was what Dr. Aykryod thought as proper to be consumed. The national tribunal did not see the need for changing the coefficient of 80 per cent. The national tribunal held that in the economy of our country the need-based minimum suggested by the resolution was merely an ideal to be achieved by slow stages but was impossible of achievement instantly. We have been addressed able and very moving arguments on behalf of the employees by Sri Chari. There can be no doubt that in our march towards a truly fair wage in the first instance and ultimately the living wage we must first achieve the need-based minimum. There is no doubt also that 3 consumption units formula is, if anything, on the low side. In determining family budgets so as to discover the workers' normal needs which the minimum wage regulations ought to satisfy, the size of the standard family is very necessary to fix. One method is to take simple statistical average of the family size and another is to take into account some other factors, such as, (i) the frequency of variation in family sizes in certain regions and employments; (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es was considered by the Pay Commission to be too high and by the Planning Commission (Third Plan) to be a matter for re-examination. It will have to be examined what type of food should make up the necessary calories and how may calories are the minimum. Further the amount of minimum wage calculated on the need-base formula was said by the Pay Commission to be extraordinary high. This was also the view of the Labour Appellate Tribunal in East Asiatic Company v. their Workmen, [1962] I L.L.J.610. Both these documents contain valuable calculations and they show the enormous increase per saltum which would certainly cause enormous unrest among workmen in general in the country. It is also to be noticed that the Reserve Bank, which Sri Chari claims is the best employer, to apply the formula, is not really the right place for the experiment. If the experiment has to be performed, it must have a beginning in a commercial concern after thorough examination and a very careful appraisal of the effect on the resources of the employer and on production. The Reserve Bank is not a profit-making commercial undertaking. Its surplus income is handed over to Government and becomes national income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the cost of living between the members of the clerical staff and the subordinate staff has been held to be an increase of 80 per cent over the remuneration of the latter. This was laid down by the late justice Sri Rajadhyaksha in a dispute between the Posts and Telegraphs Department and its nongazetted employees. Sri Justice Rajadhyaksha's calculation was made thus In 1922-24 there was a middle class family budget enquiry in Bombay and it was found that a family consisting of 4.58 persons spends ₹ 138-5-0 per month. But the average expenditure of the middle class family in the lowest income group (having incomes between ₹ 75 and 125) per month was ₹ 103-4-0. In 1923 the cost of living index figure was 155 whereas in 1938-39 it was 104. According to these index numbers the cost of living of the same family would be 103 x 10/155 = ₹ 69 in 1938-39. The lowest income group in the middle-class budget enquiry consisted of 3.29 consumption units. Therefore, for an average family of 3 consumption units, the expenditure required in 1938-39 would have been 69 x 300 /329 = ₹ 63. According to the findings of the Rau Court of Enquiry a working class fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure cannot exceed the income. The only pattern which such inquiry may reveal may be a pattern based on the income of the class of persons whose case is being considered. This Court is in no better position than the National Tribunal to say what other coefficient should be adopted. When fresh and comprehensive inquiries are conducted, the results would show whether the coefficient should go up or down. With the rise of wages to higher levels among the working class the differential is bound to be lower and this is a matter for inquiry. Till then there is no alternative but to adhere to the coefficient already established. We shall now take up for consideration some minor points which were argued by Sri Nargolkar. The first is a demand by the association for a combined seniority list so that promotion may be based on that list and not upon the reports about the work of the employee. The national tribunal dealt with it in Chap. XVII of its award. Regulations 28 and 29 of the Reserve Bank of India (Staff) Regulations, 1948, deal with seniority and promotion and provide 28. An employee confirmed in the bank's service shall ordinarily rank for seniority in his grade acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides as follows - 5. (1) No gratuity will be granted to or in the case of an employee - (a) if he has not completed service in the bank for a minimum period of ten years, or (b) if he is or has been dismissed from service in the bank for any misconduct. The Association and the union demanded modification of sub-rule (b) quoted above. The Sastri tribunal had recommended that there should be no forfeiture of gratuity on dismissal except to the extent to which the misconduct of them worker had caused loss to the establishment. The Labour Appellate Tribunal modified the Sastri award and decided in favour of full forfeiture of gratuity on dismissal. The Reserve Bank relied on the Express Newspapers (Private) Ltd., and another v. Union of India and others, [1961] 1 L.L.J. 339 in support of the sub-rule and also contended that there was no jurisdiction in the national tribunal to consider this subject under item 20 of Sch. I or item 21 of Sch. II. The Reserve Bank relied upon item 7 of Sch. I and item 6 Sch. II. The demand of the association and the union was rejected by the national tribunal. It had earlier rejected a similar demand in connexion with the commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 125). The question of confirmation and the period of probation are matters of internal management and no hard and] fast rules can be laid down. It is easy to see from the rival schedules that probationary periods are both short and long. As no question of principle is involved, we decline to interfere and we think that the national tribunal was also justified in not giving an award of a general nature on this point. The next point is about the extra payment which the graduates were receiving and the fitment of persons in receipt of such extra amounts, in the new scale provided, In the year 1946 the bank accepted the principle of giving an allowance to employees who acquired degrees while in employment. At the time of the present dispute graduates were in receipt of ₹ 10 as special pay. The question was whether in making fitment in the new time scales these amounts should have been treated as advance increment It appears that the national tribunal] reached different conclusions in the two awards arising from Reference No. 1 and the present reference. In the case of commercial bank the fitment was on a different principle and Mr. Palkhivala agreed to make fitment in the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that - (a) . . . . . (b) if the Central Government is of opinion, in any case where the award has been given by a National Tribunal, that it will be expedient on public grounds affecting national economy social justice to give effect to the whole or any part of the award, the appropriate Government or as the case may be the Central Government, may, by notification in the official Gazette, declare that the award shall not become enforceable on the expiry of the said period of thirty days. (2) Where any declaration has been made in relation to an award under the proviso to Sub- sec. (1), the appropriate Government or of Central Government may, within ninety days from the date of publication of the award under Section 17 make an order rejecting or modifying the award, and shall, on the first available opportunity, lay the award together with a copy of the order before the legislature of the State, if the order has been made by a State Government, or before Parliament if the order has been made by the Central Government. (3) Where any award as rejected or modified by an order made under Sub-sec. (2) is laid before the legislature of a State of bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Reference No. 1 it appears that but for the delay that took place the tribunal would have made the award to operate as laid down in Sub-sec. (1). It has been ruled in the three cases - Remington Rand's case Rajkamal's case and Western India Match Company's case - that discretion exercised on judicial principles by the tribunal about the commencement of the award should not be interfered with. Nothing was shown to us why the award should be made to commence earlier. Both sides were to blame in regard to the time taken up and the tribunal perhaps found if difficult to reach a conclusion earlier in view of the number of the references before it. In the circumstances, it cannot be said that the selection of 1 January 1962, when the inquiry in the present reference was completed except the preparation of the award, was bad. In any event, this was a matter of discretion and it cannot be said that the discretion has not been exercised on judicial principles. We decline to interfere. In the result the appeal fails and it will be dismissed. it may however, be said that the appeal would have partly succeeded that for the creation of new scales of pay for class II employees a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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