LexCALCUTTA INSURANCE CO. LTD. versus THEIR WORKMEN
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CALCUTIA INSURA'iCE Co. LTD. v. THEIR WORKME:\ February 6. 1967 [V. BHARGAVA AND G. K. MITTER, JJ.j Industrial Dispute-Adjustment of enJployee.r in pay scales on ltngth of service--Propriety of-Provision for gratuity, privilege and sick /eav~ Principles. In 1958. an agreement was entered into between the appellant C<llll- paoy and its employees, with reference to certain demands made by the latter. The agreement was in force for 5 years. In 1963, after the expiry of the period, the employees asked for a revision of the mattm dealt with by the agreement. The lndll•trial Tribunal lo which the indll9- trial dispute was referred held by its award that : (I) the scales of pay and dearness allowance should be increased and that the employees should be pulled up to fit into the revised scales of pay taking into account their length of service; (2) on the question of gratuity, that 5 years of com- pleted and confirmed service was the qualifying period, even in the case of retirement or resignation or termination of service of an employee; and (3) privilege leave should be allowed up to 30 days in a year with accumulation up to 90 days. and sick leave to the extent of 15 days for each year of service up to 3 month> on full pay. and thereafter, three months on half pay. In appeal to this Court : HELD : (I) The question regarding 'evision must be exaained on the merits of each indiv1dllal case. It could not be said that the Tribunal should not have upset the 1958 agreement because enough time had not elapsed since the date of that agreement. In 1958. the company was in- curring losses and it was only in 1962 that its prospects had improved. The pay and dearness allowance of the workmen as a result of the award should be comparable to the pay and dearness allowance of those work- men working in other comparable concerns; and, the financial burden should, without any difficulty, be met by the company in view of its im- proved working. [6038, Fl Workmen of Balmer Lawrie & Co. v. Balmer Lawrie & Co. [1964] 5 S.C.R. 344, followed. A 8 c D E F Taking into consideration the fact that the wage scales and dearness G allowance were low even as compared to those in comparable concerns and the e.o;tablisbed financial capacity of the employer, since 1962. to bear the burden, the award of the Tribunal on the question of adjustment of the workmen into the new seal°' was justified. Unless . the length of service of the workmen was taken into consideration great hardship would be indicted on the existing workmen compared to the salary and dearness allowance which new workers would get. By fitting the workers in the new scales of pay taking into accoun1 their length of service, the com- H pany would be Tehabilitating them to a certain extent even though they mziy have suffered in the past on account of .the inadequacy of the scales of pay and dearness allowance. [603 C.G: 606 B-C] B c D E F G H CALCUTTA INSURANCE co. v. WORKMEN (Mitter, /.) 59T French Motor Car Co. v. Their Workmen, [1963] Supp. 2 S.C.R. 16, Hindustan Times v. Their Workmen, [1964] 1 S.C.R. 234 and Greaves Cotton cl Co. v. Their Workmen, [1964] S S.C.R. 362, followed. (2) Jn considering the problem of financial burden imposed by a Jlf&tuity scheme on the employer there are two approach .. : (i) to capita• lize the burden on the actuarial basis which would show theoretically that the burden would be very heavy; and (ii) to look at the scheme in its practical aspect and find out bow many employees retire every year on the average. It is the practical approach that should be taken into account in industrial adjudication and on that basis, the burden would not be beyond the financial capacity of the company. [608 F-G] Wenger cl Co. v. Their Workmen, [1963] Supp. 2 S.C.R. 862, followed However, a workman should not be entitled to any gratuity on resig- nation or retirement, after five years of completed and confirmed service, and the period should be raised to ten yean. Otherwise, the workmen may leave one concern after another after putting the shon minimum service qualifying for gratuity. Also, a workman, who was dismissed for misconduct, should be entitled to receive gratuity only after completion of 1 S years of service on the ground that the gratuity is a reward for long and meritorious service, and further that, in cases where the misconduct far which the workman was dismissed en
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