P L D 1961 Supreme Court 393 (PLP)

B. Z. KAIKAUS, J.‑This is an appeal by special leave against the award of Mr. Rashidul Hasan, Second Industrial Tribunal, East Pakistan, Dacca. the appellants are the Rivers Steam Naviga tion Co. Ltd., and the India General Navigation Railway Co. Ltd., who have now amalgamated and are called the General Steamers Co. Ltd. Respondents 3 to 9 are seven Unions of employees of the appellant‑companies, respondent No. 1 being the Province of East Pakistan and respondent No. 2 the Industrial Tribunal. The appellants have been carrying on the business of inland transport for a period of about 100 years. They are the biggest operators in this line, the number of their workers being 7000. A reference under the Industrial Disputes Act, 1947, had been made by the East Pakistan Government to the Industrial Tribunal on the 8th of November 1957, by means of Order No. 1056 Lah., with respect to various demands made by respondents 4, 7 and

8. As it was apprehended that disputes similar to those raised by these three respondents would be raised by the remaining four union too, they were later added as parties to the reference before the Tribunal. The various issues on which the Tribunal was to give its decision had been specified by the Government of East Pakistan in Annexure A to E in the Order mentioned above. During the hearing before the Tribunal quite a number of demands were dropped, some were rejected and some were accepted. The present appeal by the appellant companies is confined to the decisions on the following demands Annexure A : demands 1, 2, 3 and 21 ; Annexure B : demands 2, 6, 8, 9 and 28 ; Annexure C, part I : demands 2, 21, 38, 39 and 48 ; Annexure C, part II : demands 2, 9, 10 &

12. Before us only the I. G. R. S. Union respondent No. 4 is represented. Other Unions have failed to appear. Before dealing with the various demands there is a preliminary objection raised by the appellants to the validity of this award which has to be disposed of. It is contended that the matters involved in the demands which have been allowed have already been the subject‑matter of a number of various agreements between the appellants and some Unions of workers and therefore in view of sections 18 and 19 of the Industrial Disputes Act there was neither any jurisdiction in the Government to make a reference nor was there any jurisdiction in the Tribunal to adjudicate upon them. Although at the beginning of arguments great stress was being laid upon the number of agreements and settlements arrived at and it was being urged that the workers had been taking undue advantage by making agreements through one Union and then re‑agitating the same matter through other Union, ultimately when it came to the examination of the agreements with respect to the different demands which are in dispute it turned out that the only bar which could be pleaded was an agreement arrived at on the 6th of June 19.55 during proceedings before" an Industrial Tribunal. This agreement was found by the Tribunal which was hearing those proceedings to be fair and reasonable and was incorporated in the award of the Tribunal dated the 22nd of October 1956. Learned counsel for the appellants argued that this award which was originally to remain in force only for a period of one year would even after the expiry of one year remain in force till the expiry of 6 months from the date of notice of termination of award, on account of subsection (5) of section 19 of the Act. It is true that on the wording of section 19 as it now stands awards remain in force till they are terminated by notice, but sub section (5) by which their life has been so extended was introduced in section 19 only by the Industrial Disputes Amendment Act XXXI of 1958, whereas the award which is being relied upon was delivered on the 22nd of October 1956. In accordance with section 19 as it stood on the date when the award was delivered it was to remain in force only for a period of one year. The award cannot, therefore, be any bar to be re‑agitation of the matter involved. The next contention of the learned counsel for the appellants is that this was not merely an award but a settlement and a settlement under section 19 (2) remains binding on parties till it is terminated by a notice and there has been no notice in this case. The difficulty however in the way of learned counsel is that the word `settlement' is defined in section 1 (p) of the Act and it means "a settlement arrived at in the course of conciliation proceedings". Admittedly, this settlement was not arrived at in the course of conciliation proceedings but while proceedings were pending before a Tribunal and therefore section 19 (2) is inapplicable. As a last resort learned counsel contends that when parties have entered into an agreement or an award has been delivered, parties should not be allowed to take a position or make a claim inconsistent with the award or the settlement unless they are able to show some change of conditions since the award was delivered or the settlement arrived at. It is true that an award delivered on a particular date should be presumed to have taken into consideration all the relevant factors as on that date and should be regarded as the proper decision under the circumstances so that a person who asks for variation should either show some change of circumstances or put forward a case which would ordinarily entitle him to a review of the previous decision. Similar considerations would apply to a settlement unless the settlement was a kind of interim arrangement or was arrived at in view of certain special conditions. However, neither an award nor a settlement can in a case where it does not bind the parties under section 19 be relied upon as a bar and it can only be considered as a relevant circumstance when dealing with that particular demand which has already been the subject- matter of the award or the settlement. We now proceed to consider the various demands and commence with Annexure A, which relates to demands of the lower ratings. The first demand to be considered is demand No. 1 by which the lower ratings claimed a graded scale of pay. It may be stated here that for a long time the practice in the companies was to employ the lower ratings on a system of rotation in order that a number larger than that which was needed at any particular time by the companies may be employed. This system of rotation has now been abolished. In support of the demand that there should be a graded scale of pay two arguments were put forward, the first being that the system of rotation having been abolished it was proper that there should be graded scales of pay and the second that the present scales are not satisfactory and needed amendment. The evidence offered in support of the demand by the workers was only this that different workers went into the witness box and stated the particular grade which they demanded. On behalf of the companies it was urged: (1) that in no other company was there any graded scale of pay for lower ratings ; (2) that the scales of pay of appellant‑companies were higher than those of any other company ; and (3) that the appellant‑companies had been suffering heavy loss and therefore they were not in a position to raise the scales of pay. The Tribunal came to the conclusion that: (1) the rates paid by the appellant‑companies were the highest ; (2) that the companies had been suffering heavy losses ; (3) that the question to be considered was whether minimum wage was being paid ; (4) that if the scales were raised there would be an additional burden of 44 lacs per year on the companies. The Tribunal at the same time did not find that in any other company any graded scale of pay for lower ratings existed. Yet the Tribunal thought fit to revise the scales and make substantial additions to the rates of pay, thereby imposing a heavy burden on the companies. The reasons for Tribunal's conclusions would be found in the following passage "On the basis of these materials the counsel for the companies argued that as they were paying the highest of all similar con cerns, there is no occasion for demanding further increase in the scale of pay. The contention of Mr. Mozammel Haq on the other hand is that those other concerns are not as big as the Joint Steamer Companies and therefore the scale of pay that those concerns pay to their workers cannot be compared with that of the Joint Steamer Companies. According to him the Joint Steamer Companies are making huge profits and are well‑off and as such they can afford to pay and should pay higher scale of pay to the Ratings. Evidence has been adduced on the side of the Joint Steamer Companies to show that they have been running the trade for the last few years at a considerable loss and in spite of the increase in freight and fare rates, they have not been able to convert the trade into a profitable one. A large number of statements and charts have been filed to establish the case of the companies in this respect. The case of the Companies is that in case they are to implement the demands of the Nabik Union in respect of the items that ate the subject‑matter of adjudication, it will involve an additional expenditure of about forty‑four lakhs of rupees a year and in the present circum stances of the companies when they are running at a loss it will not be possible for them to accept any single demand of the Unions. . Mr. Aragon, counsel for the Companies argued on the financial aspect of the case. There is no reason to discard the various statements filed by him in support of his contentions. The financial picture is a dismal one and one cannot overlook this grave implication: At the same time the other side of the picture also cannot. be ignored. My view is that though the Companies pay almost the highest there is need of some improvement in the lot of those who are to the lowest rung of the ladder, the Ratings. Moreover, as already observed, with the abolition of the rational system of recruitment and intro duction of permanency. I would recommend a graded scale of pay for the Ratings. I do not want a general minimum grade as recommended by Mr. Mobarak in Exh. 1, with proportionate increment for the other cadres, but I would recommend different graded scales for each category of Ratings." The Tribunal is fully conscious that the rates paid by these companies are very high ; that they have been suffering heavy losses and that they can ill‑afford the burden of higher rates of pay. The Tribunal bases its order on what it calls "the other side of the picture", but it does not explain what that other side is, and it is clear from the passage quoted above that the only reason for introduction of the higher and graded scales of pay is its opinion that "though the companies pay almost the highest there is need of some improvement in the lot of those who are in the lowest rung of the ladder, the Ratings". It is not explained what exactly the Tribunal means by "need for improve ment". An increase in wages has to be made on some judicial Principle. The Tribunal starts by saying that the minimum wage has to be found, but it has not in fact recorded any finding on the amount of minimum wage. If a company is not paying the minimum wage it can be directed to do so. If it is paying the minimum wage, but according to the practice of the industry in the region higher wages are being paid such wages can in the absence of any special circumstances be directed to be paid. But if the company is paying the highest wages and it is at the same time suffering losses there is no principle on which it can be made, to pay more. Actually, the demand was only for a graded scale of pay and was not properly a demand for a rise in salary. The evidence offered was not that the wage was insufficient or less than that which was being paid by other companies and the award of the Tribunal which makes a substantial increase in wages can be set aside even on the simple ground that it proceeded beyond the proper scope of the demand. It may be mentioned here that in a number of cases even the minimum of the grade fixed by the Tribunal is higher than the pay which was being received by the worker. For instance, the nay of Coal Trimmer was Rs. 341 whereas. He grade now fixed is Rs. 38‑1‑45, the pay of Cassab was fixed at Rs. 39 whereas the grade is now Rs. 40‑2‑60; the Bare Lasker's pay was Rs. 29 whereas the grade now fixed is Rs. 33‑ ‑

40. We set aside the award with respect to demand No.

1. The next demand that is No. 2 is for dearness allowance. Dearness allowance was being paid at Rs. 25 per mensem. The Tribunal has raised it by Rs. 8 i.e., Rs.

33. The basis of they demand that in the Employers Association the appellant‑companies had agreed to pay dearness allowance at the rate Rs. 38 per mensem. Learned counsel for the appellant‑companies has been unable to put forward any plausible argument as to why the appellants should not pay Rs. 33 when in the Employers' Association they agreed to pay Rs.

38. We see no reason to interfere with` the decision on this demand. Demand No. 3 relates to leave. The Tribunal has allowed 30 days privilege leave accumulating up to 60 days and 10 days, sick leave. Learned counsel for the appellants is unable to find any fault with this decision which is quite a reasonable one. The next demand is No. 21 by which the cost of passports and visas had been claimed. The Tribunal has allowed half the costs. As the ratings have to get passport and visa only for the company's work we see no reason to interfere with the decision of the Tribunal on this point. We now take up Annexure B, the demands of the Barisal Workshop Workers. The workshop it may be pointed out here' is already closed. Demand No. 2 related to the enhancement of payment to the Barisal Workshop Workers. The only objection to the award on this demand is that it has been made retrospective with effect from 1st January 1958. The demand having been made in March 1957, and the reference had been made on the 8th of November 1957, we see no objection to the Tribunal making award with effect from the Ist January 1958. Demand No. 6 relates to dearness allowance fixed at Rs. 33 and we refuse to interfere with decision on the grounds which have been mentioned while dealing with demand No. 2 of Annexure A. Demand No. 8 relates to provident fund. The present rates of contribution of the appellant‑companies are different at different places varying from 6% to 8%. The Tribunal has accepted that the general rate of provident fund contribution almost everywhere is 6% but it has in this case recommended a uniform rate of 7% on either side. No reasons for this change have been given. The Tribunal does not discuss the question as to why there are different rates at different places and why this distinction is improper. Nor has the Tribunal stated any reason as to why the appellant companies should be forced to pay more than 6%, the rate which is being paid by other companies. We set aside the award on this demand. Demand No. 9 relates to gratuity. The demand of the Unions was for gratuity for the period not covered by the provident fund. The Company stated that its scheme did involve payment to the workers for the‑period not covered by the provident fund and is at the same time urged that its present scheme for provident fund and gratuity was fair and reasonable. The companies relied upon a settlement which had been effected between the Company and the workers of the Barisal Workshop on the 24th of June 1955 by which some variation into previous gratuity rules had been intro duced. The Tribunal was of the opinion that the present gratuity scheme was fair and reasonable except with respect to one part which it deleted. It is wrong on principle to interfere with a carefully prepared ‑scheme of provident fund and gratuity in a particular part. If the scheme is bad it may be rejected as a whole but it cannot be rejected only with reference to a part of it, unless the Tribunal goes carefully into the whole scheme fully apprecia ting all the implications and reaches a conclusion that the variation would produce a definite and foreseen result and no more. The Tribunal has not referred to the provisions of the gratuity scheme at all, nor has it explained the defect in the scheme or the reason for the deletion of a particular portion. All that the Tribunal says is that the last portion relating to the reduction of provident fund contribution should be deleted. We are of the opinion that this interference by the Tribunal was wholly unjustified, and we set aside the award with respect to this demand. Demand No. 28 relates to quarters or house allowance. The case of the company was that the workers were mostly local and were living in their own houses. The Tribunal reasoned that as all of them were not local those who did not possess their own houses should be granted some allowance as house rent. The fact that some of the workers are not local is not by itself sufficient to entitle them to allowance. The demand is one for increase in pay and could not be allowed in the absence of material to show that rents in Barisal are higher than normal or that there have been some increase in rents since pay scales were fixed or that rents were not properly taken into account when pay scales were fixed. The companies are paying the highest wages and they cannot be directed to pay more an the absence of something which justifies increase. The award on this demand is set aside. We come now to Annexure C. Part I of this Annexure relates to demands of the clerical staff of agencies and sub‑agencies. Demand‑No. 2 of Part I relates to basic scales of pay. At present there are in the appellant‑companies five different scales of pay. The claim of the Unions was that there should be one uniform graded scale of pay. According to the Unions the fact that there were different scales enabled the Company to make unfair promotions so that those who were doing espionage work for the companies could be benefited and those who really deserved promotion were pre judiced. The companies denied that there was any unfair promotion and contended that their scales of pay were highest and that in no other company was there one general graded scale. They at the same time contended that the workers had agreed to the rates which were being paid in the agreement entered into in September 1956. and in the agreement of 8th February 1957 they had accepted the general principle that normally settlements should remain in force and should be deemed to be a settlement of any difference that had arisen before the date of settlement. The Tribunal found (1) that allegations as to improper promotion were untrue ; (2) that the scales of pay of these companies were the highest; (3) that in no other company was there a general graded scale of pay. Yet the Tribunal fixed two grades just because it appeared to the Tribunal that this will give a greater incentive to the workers. This is hardly a reason for interfering with the scales of pay fixed by the Company. Far from being an incentive to work a general graded scales of pay which ensures promotion may well stand in the way of serious effort by the workers. Considering particularly that the charge of unfair promotions has been found to be untrue it will not be proper to control the promotion of employees by the companies by fixing a general grade. It would be an interference with the working of the Company which on principle is not justified in the absence of exceptional reasons. We set aside the award on this demand. Under demand 21 the Unions claimed that all categories of shore staff should be provided with suitable free accommodation or there should be an allowance of 25% of the basic pay with a minimum of Rs.

15. The argument on behalf of the Unions was that the employees of the Head Office at Dacca were being granted house allowance of 20% of the basic pay. The appellant companies contended that house allowance given to the employees of the Head Office was in view of the special conditions at Dacca and they relied in support of their contention on the agreement dated the 21st of September 1956. Clause (8) of this agreement runs: "A house allowance has been allowed to the employees of the Dacca Head Office because the peculiar difficulties they face with in respect of conveyance, education, accommodation etc., which are quite distinct from those prevailing in the agencies and sub- agencies." Nothing had been said on behalf of the Unions as to why this statement in the agreement should not be regarded as correct and as the Unions have sought support for their claim only from the fact that to the employees of the Head Office house rent was being paid the claim ought to fail because of the special conditions which entitle those working at the Head ‑Office to additional payment. We set aside the decision on this demand. Demand No. 38 relates to gratuity. The decision of the Tribunal is the same as in the case of the demand No. 9 of Annexure B and for the reasons already stated we set aside the decision on this demand too. Demand No. 39 relates to leave. The Tribunal has allowed 30 days' privilege leave, and 10 days' casual leave, 15 days' sick leave with full pay and 10 days' sick leave without pay. There can be no objection to the sick leave. So far as the casual leave is concerned it is urged on behalf of the appellants that East Bengal Shops & Establishments Act, 1951, provided for 14 days' privilege leave only, and that if 30 days' privilege leave is allowed there is no reason for adding of casual leave of 10 days. In section 9 of the East Bengal Shops & Establishments Act, 1951, the words used are "leave not exceeding 14 days". Properly interpreted this section does not mean that the employer cannot grant privilege leave for more than 14 days. However, as the employer is not bound to grant leave for more than 14 days he cannot be forced to grant 10 days' casual leave if he has already granted 30 days as privilege leave. We set aside the decision or, this demand too. Demand No. 48 relates to medical aid. While there are observations in the award which may suggest that the liability of the companies is more than that‑ which is contained in the last sentence of the decision on this demand the correct legal position is that the recommendation is contained only in the last sentence wherein it is said that in the case of emergency or if the service of the company's doctor is not available the worker may avail of the services of an outside doctor without prior sanction of the Manage ment. To this direction learned counsel for the appellants has no objection and in fact can have no objection. We uphold the award on this demand. We now come to part 11 of Annexure C which relates to demands of the Head Office employees. Demand No. 2 was for higher scale of pay. The Tribunal, after a full discussion, rejected the demand because the scales of pay of appellants‑companies were very high and did not need being raised. The Tribunal, however, directed that there should be only 3 grades, grade A, grade B and a special grade in place of the different grades which were now prevalent in the appellant‑companies. This order of the Tribunal has to be set aside on the simple ground that there was no demand at all for the introduction of any general grades. The demand was only for a rise in the salary and that was denied. We accordingly set aside the decision on this demand. Demand No. 9 relates to leave facilities. The Tribunal has awarded to the clerical staff privilege leave for 30 days accumula ting upto 60 days, casual leave 10 days, sick leave with full pay 16 days and sick leave with half pay '0 days. To the subordinate staff' the Tribunal has allowed privilege leave up to 15 days accumulating upto 30 days, casual leave ten days and sick leave 15 pays with full pay. It is argued with reference to the pro visions of the East Bengal Shops & Establishments Act that usual leave has been improperly allowed to the clerical stag inasmuch as 30 days have already been allowed to them as privilege leave. For the reasons which we have already recorded in connection with demand No. 39 of Part I of Annexure C we are of the opinion that the award of 10 day's casual leave to the clerical staff was not justified and we set aside the award to this extent. Demand No. 10 relates to medical aid to the staff. In the award there are some general recommendations made to which no exception can possibly be taken. We uphold the award on this demand. Demand No. 12 relates to gratuity and the recommendation of the Tribunal is the same as that in relation to the demand No. 9 of Annexure B and for the reasons recorded in reference to that demand we set aside the award on this matter. This appeal is partly accepted and the award of the Tribunal set aside to the extent stated above. A. H. Order accordingly.