AMITY LAW SCHOOL

Case Analysis: Greaves Cotton And Co. & Ors. VS. Their Workmen
(1964 AIR 689, 964 SCR (5) 362)

Submitted to: Submitted by:

Dr. Santosh Kumar Tripathi Rishab

B.A. LL.B

9TH SEM (5th YEAR)

 CASE:
Greaves Cotton and CO.& Ors … Petitioner
Versus
Their Workmen …Respondents

BENCH:

 WANCHOO K.N.
 GAJENDRAGADKAR
 P.B.GUPTA
 K.C. DAS
 HEADNOTE:

The disputes between the appellant companies and the workmen

which are related to wages, dearness allowance and
gratuity. The companies raised objections to the award of
the Tribunal on various grounds.
FACTS OF THE CASE:
 These nine appeals special leave arise out of the awards of the Industrial Tribunal, Bombay
and will be dealt with together. There were disputes between the four appellants-
companies and the respondents their workmen, which were referred for adjudication to the
Industrial Tribunal by nine reference-orders on various dates between April to December
1959. The main dispute which gave rise to the references was with respect to wages,
dearness allowance and gratuity. The references included other items also but we are not
concerned in the present appeals with those items. Of the four companies who are the
appellants before us, Greaves Cotton and Co. is the first company and its main activity is to
invest money in manufacturing concerns. The second company is Greaves Cotton and
Crompton Parkinson Private Limited and its main business is distribution of the products
of a manufacturing concern known as Crompton Parkinson (Works) India Limited and
service and repair to the said products at its workshop. The third company is Kenyon
Greaves Private Limited and its main business is to manufacture high grade for the textile
industry. The last company is Ruston and Hornsby (India) Private Limited and its main
business is to manufacture oil engines and pumps. The last three companies are controlled
by the first company, namely Greaves Cotton and Co. in one way or the other and that is
how the main dispute relating to wages and dearness allowance was dealt with together by
the Tribunal. There were two references each with respect to the first three companies and
three references with respect to Ruston and Hornsby Private Limited; and that is how there
are nine appeals before us. There were nine awards, though the main award dealing with
the main dispute relating to wages and dearness allowance was common.

 It appears that wages and dearness allowance prevalent in the four companies had been
continuing since 1950 when the last award was made between the parties. It may also be
stated that there was no serious dispute before the Tribunal as to the financial capacity of
the companies and further, as the first Company controls the other three companies, the
wages and dearness allowance are the same so far as the clerical and subordinate staff are
concerned. The same appears to be the case with respect to factory-workmen.

 Both parties filed scales of wages prevalent in what they considered to be comparabe
concerns and it is clear from the documents filed that some of the comparable concerns
were the same in the documents filed by the two parties. On the whole therefore we do
 not think the Tribunal was wrong in putting emphasis on the region aspect of the
industry-cum-region formula in the present case insofar as clerical and subordinate staff
was concerned, for the four companies before us do not belong to the same industry and
Greaves Cotton and Co. controls the other three. Considering therefore the standing of
the main company (namely, Greaves Cotton and Co. Ltd.), it was not improper for the
Tribunal in the present cases to rely on the comparable concerns which were cited on
behalf of the respondents, some of which were common with the comparable concerns
cited on behalf of the appellants. What the Tribunal did thereafter was to consider the
minimum for various categories of clerical and subordinate staff prevalent in these
comparable concerns and the maximum prevalent therein and also the annual increments
and the span of years in which the maximum would be reached. The Tribunal then went
on to fix scales for various categories of clerical and subordinate staff of the appellants
which were in-between the scales found in various concerns. Further, as the financial
capacity of the appellants was not disputed, the Tribunal pitched these scales nearer the
highest scales taking into account the fact that for nine years after 1950 there had been no
increase in wage scales. We do not think therefore that the wage- scales fixed by the
tribunal, leaning as it did, on the region aspect of the industry-cum-region formula, for
the clerical and subordinate staff can be successfully assailed by the appellants.

 The next question is about the so-called retrospective effect of the award. The first
reference was made to the Tribunal on April 8, 1959 while the last was in December
1959. What the Tribunal has done it to grant wage-scales etc. from April 1, 1959. This
cannot in our opinion be said to be really retrospective, because it is practically from the
date of the first reference in the case of the main company. On the whole therefore we see
no reason to interfere with the order of the Tribunal fixing the date from which the award
would come into force.
 Lastly we come to the question of gratuity. The attack in this connection is on two aspects of
the gratuity scheme. The first is about the fixation of 20 months as the maximum instead of
15 months, which was usual so far. The second is with respect to deduction from gratuity
only to the extent of the financial loss occasioned by misconduct in case of dismissal for
misconduct. So far as the second provision is concerned it cannot be disputed that this is the
usual provision that is being made in that region. So far as the increase in the maximum
from 15 months to 20 months is concerned, it appears that the Tribunal has relied on a
number of cases in which the maximum is higher than fifteen months wages. In these
circumstances considering that tribunals have now begun to give a higher ceiling and in one
concern, namely, Mackinnon Mackenzie, the ceiling has been next even so high as thirty
months by agreement, we do not think that any interference is called for in the present case.

 We therefore dismiss the appeals so far as retrospective effect and adjustments as also
fixation of wages and dearness allowance with respect to clerical and subordinate staff are
concerned. We allow the appeal with respect to factory-workmen and send the cases back to
the Tribunal for fixing the wage structure including basic wage and dearness allowance and
for granting adjustments in the light of the observations made by us. The new award
pursuant to this remand will also come into force from the same date, namely, April 1,1959.
The appeals with respect to gratuity are dismissed. In the circumstances we order parties to
bear their own costs. Two months from today is allowed to pay up the arrear.

JUDGMENT:
 THIS is a reference by the Government of Bombay under S. 12(5) of the Industrial Disputes
Act, 1947, for adjudication of a dispute between Greaves Cotton & Co., Ltd., Bombay, and
its workmen over the following demand : - 'Every employee should be paid bonus for the
year 1956 -57 equivalent to one -half of his basic earnings (inclusive of overtime earnings
and acting and comptist allowances) during the year.'
 IN the statement of claim filed on behalf of the workmen by the Greaves Cotton and Allied
Companies Employees' Union, it is stated that the wages and salaries of the workmen are
quite inadequate and far below the living wage. An adequate bonus should be given towards
filling the gap between the existing wage and the living wage. The company has made a
large profit during the year. It is spending large amounts on its covenanted staff and the
general policy of the company is to benefit more the highly placed officers; bonus to officers
should not be taken into account in making the bonus calculations. The company has in its
written statement stated that it has entered into a five -year bonus agreement with all its
workmen at Ahmedabad, New Delhi, Kanpur, Calcutta, Madras, Bangalore and Coimbatore
and with some of its workmen in Bombay. These terms were offered to the rest of the
workmen in Bombay and the company has submitted that the tribunal should commend the
terms of the agreement to the Bombay workmen and make an award in terms of the
agreement. The company has denied that the wages and salaries are inadequate and far
below the living wage. It has stated that it has not made a large profit during the year. It has
denied that it is spending large amounts on the covenanted staff or that its general policy is
to benefit highly paid officers rather than the workers. The wages and salaries of the workers
are according to an award. Finally, the company has submitted that an award should be made
on the lines of the agreement referred to above.
 IN the bonus dispute in this company for the year 1955 -56, I awarded bonus equal to one -
third of the basic earnings (excluding allowances and overtime) [see award published in the
Bombay Government Gazette, dated 6 March, 1958, at p. 1181]. Against this decision, a writ
petition was made to the High Court. The parties compromised in the High Court. The
consent order was as follows : - 'Without prejudice to the rights, contentions and
submissions of either party made in the petition and in the affidavits and also without
prejudice to the rights and contentions of either party in respect of bonus of any subsequent
year or years, it is agreed that the workmen will accept as bonus for the year in question the
amount already offered by the company plus 50 per cent of the excess of the bonus awarded
by the first respondent over the amount already offered by the company.' As the order was
varied without prejudice to the rights and contentions of both the parties in the writ petition,
it has been urged by the company and conceded by Sri Sule on behalf of the union that
nothing which has been decided in that bonus case operates as res judicata in the present
case.