MONTHLY-RATED WORKMEN AT THE WADALA FACTORY OF THE INDIAN HUME PIPE COMPANY LTD. versus INDIAN HUME PIPE COMPANY LTD., BOMBAY

Citation: [1986] 2 S.C.R. 484 · Decided: 11-04-1986 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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MON'.OJLY-kATED WORKMEN AT TilE WADAIA 
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FACTORY OF IHE INDIAN HWE 
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PIPE C<JtPANY LTD. 
v. 
INDIAN HlME PIPE (XMPANY LTD., 
BamA.Y 
APRIL 11, 1986 
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[0 • CHINNAPPA REDDY, V. KHALID AND S. NATARAJAN, JJ.) 
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Service Conditions of employees -
Change from the slab 
system of Dearness Allowance in vogue for eighteen years to 
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the 
textile 
scale · of 
D.A. 
affording 
115 
per 
cent 
neutralisation in respect of the head office staff and the 
monthly rated factory staff - Validity of the notice of change 
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dated 15. 7. 75 given by the company under section 9A of the 
Industrial Disputes Act, 1947 - Advisability of Tribunals and 
Courts to revise the wage sti:ucture of workmen to their 
prejudice \When a dispute arises -
Burden of proof as to 
necessity of change, upon whom lies in a reference arising out 
of section 9A notice of change. 
The respondent is an Engineering concern owning sixty 
factories spread throughout India. In Bombay, it has a factory 
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at · Wadala and head off ice at Ballard Estate. There were four 
Industrial Disputes Awards in this company pertaining to 
~he 
pay-scales and dearness allowance of the workmen. By the Award 
passed in reference No. II 82 of 1950 pay-scales and fixed 
dearness allowance were introduced with effect from l.].SO 
with the consumer price index in Bombay at 312 points in 1950· 
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In 1957 the index rose by 55 points and stood at 367 pointe as/~ 
a consequence of which by an Award passed in reference IT No. 
17 of 1958 dated 21st May, 1959 the alab system of dearnesa 
allowance was introduced with effect from 1. 2. 58. nus ,AWard 
was not challenged by the company at any time• By Award 
published on 30.12.65 in reference II No.47 of 1964 at the 
instance of the labour marginal increase in the baSic paY 
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acalea was provided mainly on the ground that the slab systelll 
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was working satisfactorily. By an Award publiahed on 1.1.11 in 
reference No. IT 42 of 1973 the clerical and subordinate staff 
1n the head office were also given the slab system of D.A. lt 
wu c.ateg'lrically observed in this Award that there should not 
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l-10N1'HLY-RATED WORKMEN v. INDIAN HUME PIPE co. 
485 
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~~ be any disparity in the D.A. between the monthly rated factor 
staff and the head office staff. 
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While the wage structure stood thus, the company gave 
notice of change for doing away with the slab system on 
15.7.75 of D.A. in respect of head office staff and the 
monthly rated factory staff. The notice of change in respect 
of bead office staff was not . pressed since a Settlement was 
reached between the parties, in July 1976 whereunder the D.A. 
at consumer price index 1380 points was merged in the revised 
consolidated pay scale of different categories with effect 
. from 1.9.75. Although in September, 1975, the consumer price 
·y........., index figure was 1270 points, it was taken notionally as 1380 
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for 
the 
purpose 
of 
merger, 
providing 
for 
review 
of 
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consolidated pay scales if the consumer price index IDO'."ed 
~~ high. The notice of change in respect of mnthly rated factory 
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staff was, however, referred to adjudication. The Industrial 
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Tribunal gave its Award on 27th October, 1980, holding that 
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the employer was justified in seeking abolition of the slab 
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system of D.A. and substituting it with the textile scale of 
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D.A. affording 115 per cent neutralisation. The Tribunal held 
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that the workmen should be paid D.A. at 115% of the revised 
..v-;'1 textile rate in the same manner in which the daily rated 
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workmen are paid the.ir D.A. at the prevalent cost of living 
index in t~ month of November, 1980 or if such index number 
ia not available at that time then at the index No. 1771-1780. 
While making this Award the Tribunal was conscious of the fact 
that the workmen were · likely to lose quite a substantial 
amount of the D.A. but it was stated that it was inevitable 
when attempt was made to bring about uniformity and parity 
~ woong the workmen of the same company working at the SCUI.Aa 
--, place doing similar work.. The Tribunal felt that if the parity 
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scheme 
was to come into force either from the date of the 
demand or from the date of reference, another unfortunate 
happening would take place in that the workmen would be liable 
to refund a lot of amount excessiv

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