LexMANAGEMENT O.F THE D.C.M. CHEMICAL WORKS versus THEIR WORKMEN
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1962 lifa1ch I. 516 SUPREME COURT REPORT~ [1942] SUPP . .tlANAGEMENT O.F THE D.C.M. CHEMICAL WORKS v. THEIR WORKMEN (P. B. GAJE1'DHAGADKA!t and K. N. WANCHOO, JJ.) Industrial Di.•1mte-Company underlnlcinq several conc•rns -If independent unit•-IVage "'ruclure-lncremenlal scale8- Mini1num u;age and fair 11:age, di.i1tinction--Oratuity in addition lo Provident Pund -&heme for-If can be framed. The disputes between the appellant, the management of the D.C.M. Chemical Works which was a constituent unit of the' Delhi Cloth and General Mills Limited (the Company), and its workmen related, inter alia, to \Vage scales and gratuity. The workmen claimed that the chemical works was ail integral part of the Company and, therefore, the over-all position of the Company should be takr.n into account in fixing the wage- structurc. The Industrial Tribunal to which the matter was referred held that in the circumstance~ of the case the chemical works should be treated as an indrpendent unit and that the wage-slructur9 etc .• could not be fixed on the basis of the over. all position of the Company. The facts showed that though the Company \\'as a single limited concern O\vning and control!ing various industrial units of different kinds under it. There were certain features 'vhich \\'ent to show that the various under- takings carried on by the Company had been treated as inde- pendent concerns and could not lead to the conclusion that ti.icy were one integrated whole. It was found that (i) each unit had separate book• of account and separate profit and loss account, (ii) each unit had separate muster rolls for its employees, and transfers from one unit to the other usually took place with the consent of the employees concerned, (iii) each unit had its own separate wages and dearness allowance and bonus was also paid differently in each concern,(iv) wh<re sales took place from one unit to another they were at marke[ price and not at cost price, and (v) each unit had its own separate management. The evidence showed that throughout the cour!e of its existence sincr: 1942 the chemical works had made profits only in two years and that for the rest of the time it had been making losses which had to be met by the Com- pany out of the profits of other uniLs. Held, that on the facts found in the present case, there \Vas no nexus of integration be.tween different lines of business carried on by the Company and that the Tribunal was right ~ - 3 S.C.R. SUPREME COURT REPORTS 5i 7 its conclusion that the .chemical works was an independent unit and that, therefore, in fixing the wage structure etc., one had to look to the position of the chemical works only and could not integrate it with other units. The Associated Cement Companies Limited, Chaiba~sa Cement Works,Jhinkpani v. Their Workmen, (1960) I S.C.R. 703, Pratap Press etc. v. Workmen, (1960) 1 L.L.J. 497: Pakshi- raja Studios v. Workmen, (1961) 2 L.L.J. 380 and Hony. Secre- tary, South IndiaMiilowners' Association v. Secretary, District Coimbatore District Textile Workmen Union, (1962) (2) S.C.lt. (Supp.) p. 926 relied on. Fine Knitting Co. Ltd, v. Industrial Court, Bombay, (1962) (3) S.C,R. (Supp.) p. l 96, applied. Held further, that in making a direction for the fixation of an incr~ased fair wage on an incremental scale, the present financial condition of the concern and its stability are both nece_ssary to be considered. There is a difference between a minimum wage and fair wage which is above the bare minimum wage. In the former case the tribunal could insist that the employer paid minimum wages even out of capital. Messrs Crown Alvminium Works v. Their Workmen, (1958) S.C.R. 651, referred to. Held, also, that it is well settled that both gratuity as well as provident fund schemes can be framed in the same concern if its financial position allows it, and that though the financial position of the chemical works had not been found to be good and stable enough to warrant an incremental wage structure the direction given by the Tribunal for the fram:ng of a grat~ity scheme was not erroneous, as it was a long term provision and there was .D.o reason to suppose that in the long run the appellant would not be in a flourishing condition. Crvn. APPELLATE JURISDIOTION : Civil Appeals Nos. 4 and 5 of 1962. Appeals by special leave from the award dated January 25, 1960, of the Industrial Tribunal, Delhi in I.D. No. 40 of 1
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