WORKMEN REPRESENTED BY SECRETARY versus MANAGEMENT OF REPTAKOS BRETT. AND CO. LTD. AND ANR.

Citation: [1991] SUPP. 2 S.C.R. 129 · Decided: 31-10-1991 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

WORKMEN REPRESENTED BY SECRET ARY 
v. 
MANAGEMENT OF REPTAKOS BRETT. 
AND CO. LTD. AND ANR. 
OCTOBER 31, 1991 
[RANGANATH MISRA, CJ. AND KULDIP SINGH, J.] 
Labour law: 
Industrial dispute-Minimum wages-Determination of Dearness 
A 
B 
Allowance scheme-Whether can be altered to the prejudice of workmen. 
C 
Industrial Tribunal-Abolition of existing dearness allowance 
scheme-Directions to link dearness allowance with pre~war cost of living 
index-Validity of 
Constitution of India: 
Art 136: Industrial Tribunal and High Court acting in oblivion of 
legal position causing manifest injustice to workmen-'Supreme 
Court--Whether can interfere. 
D 
The respondent-company, in its factory set up at Madras in 
E 
1959, introduced slab system of dearness allowance (DA) i.e. the DA 
paid to the workmen was linked to the cost of living index as well as 
the basic pay. The double linked DA scheme, being consciously ac-
cepted as basic constituent by the company and its workmen in 
various settlements between them, became basic feature of the wage-
structure and remained operative in the company for about 30 years. F 
In the year 1983, a dispute arose between the company and its 
workmen. The matter was referred to the Industrial Tribunal. One 
of the issues before the Tribunal was based on the demand of the 
Management for restructuring of the dearness allowance scheme 
and to frame a new scheme. The Tribunal abolished the existing G 
slab.$ystem of DA and directed the dearness allowance to be linked 
only to the cost of living index at 33 paise per point over 100 points 
1 at the Madras city cost of living index 1936 base. 
Before the High Court, both the parties agreed not to press 
their respective writ petitions except on the i!"~' ol rdtructuring t-f H 
129 
A 
B 
c 
D 
E 
F 
130 
SUPREME COURT REPORTS 
[1991] SUPP: 2 S.C.R. 
DA. Upholding the findings of the Tribunal on the sole surviving 
issue, the Single Judge dismissed the workmen's writ petition. The 
intra-Court appeal filed by the workmen was also dismissed. Ag-
grieved, the workmen filed the appeal by special leave to this Court. 
It was contended on behalf of the workmen that the Tribunal 
and High Court grossly erred in taking Rs. 26 as a pre-war wage of 
a worker in Madras region and holding that the rate of neutraliza-
tion on the basis of cost of living index in December, 1984 was 
192%; that even assuming that there was over-neutralization, the 
existing pay structure/DA scheme could not be revised to the preju-
dice of the workmen unless their pay structure was within the con-
cept of 'living wage' and, in addition, it was proved that financially 
the .company was unable to bear the burden; and that the company 
could not be permitted to abolish the DA scheme to the detriment of 
the workmen much less on the plea that the said scheme was more 
beneficial than the DA schemes adopted by other industries in the 
region. 
The respondent, contended that the company had proved to 
the satisfaction of the Tribunal that financially it was not in a posi-
tion to bear the burden of existing DA scheme; that its workmen 
were in a high-wage island and as such the revision of DA scheme 
was justified. It was also contended that so long as there was some 
basis and material to validate the award, the jurisdiction under 
Article 136 ofthe Constitution stood repelled. 
On the question; whether the Management is entitled to re-
structure the DA scheme to the prejudice of the workmen on the 
ground that the existing system had resulted in over-neutralization 
thereby landing the workmen in the high-wage island 
Allowing the appeal of the workmen, this Court, 
HELD: 1.1. The management can revise the wage structure 
G 
to the prejudice of the workmen in a case where due to financial 
stringency it is unable to bear the burden of the existing-wage. But 
in an industry or the employment where the wage structure is at the 
level of minimum wage, no such revision at all, is permissible-not 
even on the ground of financial stringency. [p. 142 E) 
H 
Monthly-Rated workmen at the Wada/a factory of the India!' Hume 
I' 
.t-
WORKMEN v. MANAGEMENT OF REPTAKOS BRETT. 
131 
Pipe Co. Ltd. v. Indian Hume Pipe Co. Ltd., Bombay, (1986) 2 S.C.R. 
A 
484, relied on. 
Mis Crown Aluminium Works v. Their Workmen, (1958) S.C~R. 
65L~ Ahmedabad Mills Owners' Association etc. v. The Textiles La-
bour Assosication, [1966) 1 SCR 382, referred to. 
Killick Nixon Ltd. v. Killick & Allied Companies Employe

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