LexM/S. BRITISH PAINTS (INDIA) LTD. versus ITS WORKMEN
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• A JI - c D ' .E F G • H M/S. BRITISH PAINTS (INDIA) LTD. v. ITS WORKMEN Nuvember 4, 1965 523 [P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, v. R.AMASWAMI AND P. SATYANARAYANA RAJU, JJ.] Industrial Disputes-Retiring age for workmen-Gratuity-Quantum and minimum years of qualifying service. Two matters in dispute between the management of a paints manufac- turing company and their workmen, namely : (I) the age of retirement of the workmen and (ii) the introduction of a gratuity scheme for them, were referred ID the Industrial Tribunal. Before the reference was made the workmen were entitled to work so Jong as they were physically and mentally fit. The Tribunal fixed the age of retirement for clerical and subordinate staff at 58 years and for the factory workmen at 55 years. The Tribunal also introduced a gratuity scheme. It fixed 5 years minimum service in orderr to enable a work.man to earn gratuity and while fixing 21 days' basic wage or salary as the quantum for gratuity for each com- pleted year of service, included dearness allowance in the words "basic wage or salary." Both the management and workmen appealed to this Court. The workmen contended that : (i) the age of retirement both for the staff of the head office and the factory workmen should be fixed at 60 years, and (ii) 30 days' wages instead of 21 days should have been fixed as the quantum for gratuity. The management objected to the minimum period of five years to enable a workman to earn gratuity even in the case of voluntary retirement or resignation and contended for a longer minimum of service. The management also urged that dearness allowance should not be included in the basic wages for fixing the quantum of gratuity. HELD : ( i) The award of the Tribunal should be modified, fixing the age of retirement, for the clerical and subordinate staff as 'vell as for the factorv·workmen, whetiher existing or future, at the age of 60 years. [527 BJ Age of retirement of 55 years was fixed in the last century in govern- ment service and had become the pattern for fixing the age of retiremeDt everywhere. But considering the improvement in the standard of health and increase in longevity, the age of retirement should be fixed ordinarily at the higher level of 60 ye,ars. s:nce the work in the factory in the present case was not particularly arduous as compared to that of the clerical and subordinate staff, even in the case of factory-workmen there is no reason why the age of retirement should be fixed at a lower level, especially when the management could always terminate the service• of a workman if he becomes physically or mentally incapable of working, before the age of retirement. With the age of retirement at 60 years there will be the added advantage that more experienced workmen will be available to the management and that would be a cause for greater effi- ciency. As there are no. valid and cogent reasons for making a <liffer- ence in the age of retirement of existing workmen and those emnloyed in future, the future workmen, both clerical and subordinate staff as 524 SUPREME COURT REPORTS [1966] 2 S.C.R. well as factory workmen, should also have the benefit of the same age of superannuation. [526 B-D; 527 B-D] (ii) No case for increasing the quantum of gratuity from 21 days' be.sic wage to 31) days' basic wage had been made out by the workmen, especially when. there was a provident fund scheme also in force in the concern and the workmen were thus getting two retiring benefits. [529 HJ (iii) In the case of voluntary retirement or resignation by an employee before reaching the age of superannuation, the minimum period of quali- fying service for gratuity should be 10 years, and not 5 years as prescribed by the Tribunal. [528 E] The reason for pro\iding a longer minimum period of earning gratuity A] B in the case of voluntary retirement or resignation is to see that worktnen do not leave one concern after another, after pu!ting in the short minimum service qualifying for gratuity; and gratuity schemes usually provide for c a longer minimum in the case of voluntary retirement or resignation. [527 A-BJ (iv) Gratuity should be paid at the rate of 21 days' basic wage or salary for each completed year of service, but such basic wage would not include dearness or any other allowance. [529 F] As the gratuity scheme was being introduced for the first time in the concern, it wo
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