Holding

The employer must prove the necessity of changing the dearness allowance system, and in the absence of compelling evidence a tribunal cannot alter an established wage structure to the workmen’s prejudice.

Summary

The monthly‑rated workmen of Indian Hume Pipe Co. challenged an Industrial Tribunal award that replaced their long‑standing slab system of dearness allowance (D.A.) with a revised textile scale, citing a notice of change under Section 9A of the Industrial Disputes Act, 1947. The Tribunal held the employer justified in abolishing the slab system and ordered a phased reduction of D.A., despite the workmen’s claim that the slab system had operated satisfactorily for 18 years. The Supreme Court held that the employer bore the burden of proving the necessity of such a change and that the Tribunal had erred by shifting this burden to the workmen. It emphasized that wage structures constituting more than subsistence wages should not be altered to the workers’ prejudice absent compelling evidence, and reiterated the industry‑cum‑region principle in wage determinations. Consequently, the Court set aside the Tribunal award, restored the slab system, vacated the interim order, and awarded costs to the appellants.

Issues considered

The validity of the notice of change under Section 9A of the Industrial Disputes Act, 1947.
Whether the employer bears the burden of proving the necessity of altering the dearness allowance system.
Whether a tribunal may revise an established wage structure to the detriment of workmen.
The applicability of the industry‑cum‑region principle in determining dearness allowance.
The propriety of replacing a slab system of D.A. with a ceiling or textile scale.

Legislation cited

Industrial Disputes Act, 1947s. 9A

Subjects

dearness allowanceslab systemIndustrial Disputes ActSection 9Awage structureindustry‑cum‑region principleliving wagetribunalburden of proof

Judgment

.I

l 484

MON'.OJLY-kATED WORKMEN AT TilE WADAIA
·l ~
A FACTORY OF IHE INDIAN HWE '., ·'
. '-
PIPE C<JtPANY LTD.
v.
INDIAN HlME PIPE (XMPANY LTD.,
BamA.Y

APRIL 11, 1986
B ..;1
[0 • CHINNAPPA REDDY, V. KHALID AND S. NATARAJAN, JJ.)
... .
..
I

~
Service Conditions of employees - Change from the slab
system of Dearness Allowance in vogue for eighteen years to ·~·
·~
the textile scale · of D.A. affording 115 per cent
c neutralisation in respect of the head office staff and the
•'

monthly rated factory staff - Validity of the notice of change ~
dated 15. 7. 75 given by the company under section 9A of the
Industrial Disputes Act, 1947 - Advisability of Tribunals and
I .
.
!
Courts to revise the wage sti:ucture of workmen to their
I prejudice \When a dispute arises - Burden of proof as to
D necessity of change, upon whom lies in a reference arising out
t of section 9A notice of change.
. '.
I •{

I ~
The respondent is an Engineering concern owning sixty
(
,I
factories spread throughout India. In Bombay, it has a factory
~
at · Wadala and head off ice at Ballard Estate. There were four
l E
J 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· l.
In 1957 the index rose by 55 points and stood at 367 pointe as/~
F
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
G instance of the labour marginal increase in the baSic paY 1
acalea was provided mainly on the ground that the slab systelll ~
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

________
·......
I
.J
l-10N1'HLY-RATED WORKMEN v. INDIAN HUME PIPE co.
485
r=~f
~~
be any disparity in the D.A. between the monthly rated factor
,I staff and the head office staff. Y
..• A

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 (

,.1
of bead office staff was not . pressed since a Settlement was B ·1

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
1
for the purpose of merger, providing for review of
• consolidated pay scales if the consumer price index IDO'."ed c l
~~ high. The notice of change in respect of mnthly rated factory
l
.··
staff was, however, referred to adjudication. The Industrial
Tribunal gave its Award on 27th October, 1980, holding that
Il
!
• p

the employer was justified in seeking abolition of the slab
· system of D.A. and substituting it with the textile scale of
1 D.A. affording 115 per cent neutralisation. The Tribunal held D
\ 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
t
workmen are paid the.i r 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 E
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
'• scheme was to come into force either from the date of the F
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 excessively recovered by them as and
by way of D.A. on account of slab system ... The Tribunal
the'refore felt that it would be too harsh and unk.ind to such I ; •

v-. WOrkmen and held that the Award would come into force G )
' .
~ .

prospectively with effect from 1.11.80 and observed that the
reduction in the monthly emoluments of the workmen should be a
. gradual process so that they are able to bear the burden and i ;
can learn to adjust themselves with little less income month
to month. It therefore, directed the reduction to be spread
H
.,
·.. SUPREME COURT REPORTS
486 [19861 2 s.c.R.

·! ..
over equally for a period of six months from 1.11.80. Hence
A
the appeal by special leave.

, Allowing the appeal, the Court,
.. HELD : 1. In a reference arising out of the notice of
change given by a company under section 9A of the Industrial ~
Disputes Act, 1947 the company should make available all · ('
evidence necessary to justify its stand for a change from the
existing system. In the instant case, overlooking the
circumstances under which reference was made such a burden was l. ;
wrongly cast on the workmen to prove that a change in the '~ ...
system was not necessary. (496 :a-c)
c .r·r
2.1 Normally it·would be inadvisable for Tribunals~
i . Courts to revise the wage structure of workmen to their
l .
. i prejudice when a dispute arises. However, Tribunals arur Courts f
(! can take judicial notice of one fact; and that is that the J
wages of workmen, except in exceptionally rare cases, fall
D within the category of mere "subsisting wages", and as such
[! tinkering with the wage structure of workmen cannot be permit-
i ·.
ted except under compelling circumstances. Employers have ~
L seldom displayed a cooperative attitude where wage structures
of workmen are devised. lbey have never showed a willingness I .
. f,

I

for the involvement of the labour with the capital so as to )
engende~ a participative labour · capital relationshiP•
1
Reckoning with this reality, the Courts and Tribunals have
necessarily to k.eep their hands off from upsetting a wage :
structure that has satisfactorily worked for a long time• lhe \ l
. I
sweat of the labour is never ref leeted in any balance sheet .r"' t
although the latent force behind every successful industrY is
: j p this sweat. With their present wage structure, the labour jus~
exist. No one should try to deny them even this bare source 0
' i existence. 1503 G-H; 504 A-c)
. .
!
'-51 fCrlownl dAluainf•r• Work.a v. Dleir Worblen. (1958} s.c.R· ~L
o owe •
G
v ,

2 2 Th need·
·r1
• e Supreme Court often times emphasised the lt
for a living wage to workmen instead of a subsisting wage•
is indeed a matter of concern and mortification that even !
today the as Pi rat 1ons of a living wage for workmen r emain 1
~rage and a distant dream. Nothing short of a living wage can
.. H
~
HONTHLY-RATED WOIOOiEN v. INDIAN HUHE PIPE CO. 487

e be a fair wage. It should be the combined effort of all A
concerned including the Courts to extend to workmen a helping
hand so that they get a living wage which would keep them to
some extent at least free from want. Viewed against this back-
ground no case has been made out by the respondent in the
instant case, for a change of the slab system of dearness
allowance to the revised Textile rate of dearness allowance. B
[503 D-F]

The slab system which has been app~oved by Tribunals and
by Courts was available at the head office and for the daily
rated workmen at Wadala upto the year 1976 and worked
satisfactorily for over 17 years. In the absense of any demand
from any region for the slab system, the applicability of c
well-settled principle of industry-cum-region, and the sound
financial position of the company it cannot be said that if
the slab system was introduced in all the factories it would
result in the closing of the whole company itself. The
question that it would work against the principle of parity
and uniformity and that there would be a change of the D
subordinate staff getting more emoluments than their officers
~ who might be recently employed does not arise. [496 C-E}

2.3 1be theory of ceiling on the quantum of dearness
allowance cannot be accepted since under the prevailing
conditions there is uo control over th~ prices of essential E
COOJOOd.ities and as such a ceiling would not give sufficient
cushion when prices of essential commodities continuously
rise. (506 F-G]
ICU lick Nixon Ltd. V• Kil.liclt & Allied Coapanfes
Employees Union. (1975) Supp. S.C.R. 453, distinguished. F

Unichea Laboratories
I.Ld. v. The Worben, [1972] 3
S.C.R.. 567; Greeves Cotton and Co. and Ors. V• Their Workmen,
{1964] 5 S.C.R. 362; Bengal Oleaical l'ba..maceutical Works Ltd.
v. Ita Workmen. [1969} 2 S.C.R. 113 and l'ami.ni Heta.la and
Alloya Ltd. V• Ibeir Wo~, [1967] 2 S.C.R. 463, referred G
to.
CIViL APPELLATE JURISDICTION Civil Appeal ~o. ·3040 of
191)6. l
·
From the Award dated 27 • 10• 1980 of the Industrial L[
' Jl.
........_.,•...,._...;T-..:~;;~...
~b,u~na=.:l~Ma:;·ha~r.:a:sh~t~r~a~in~~;.;f;e;.;re~n~c~e...;.(1-T~)-No_._s_J,.l•oll!llf-19_7_5_._ _ _ _ _-F
488 SUPJ.ill1E COURT REPORTS [1986} 2 S.C.R,

J_
A N.B. Shetye, Dr. Y.S. Chitale, M.lkul Mudgal and Atul ("
Chitale for the Appellants. 1
;:
'
B Pa,
G•• i P• ' -u~maswami,
'4 H. S. Parihar and Vipin <llandra
for the Respondent.

J.P. Cama and Mukul Mudgal for the Intervener.
B
The Judgment of the Court was delivered by

lWALID~ J. This appeal, by special leave, is directed
against the award of the Industrial Tribunal in IT No. 531 of 4.~
1975, dated 27th October, 1980. The appellants are the 1
c monthly-rated workmen at Wadala Factory of the Indian Hume
Pipe Company Ltd., Bombay and the respondent the Company -~
mentioned above.

We will briefly refer to the history of the demands of
·'
the workmen in this Company to appreciate how the dispute
D involved in this appeal originated. The respondent (herein-
after referred to as the Company) is an Engineering concern .,._
owning sixty factories spread throughout India. In Bombay, it ·1
has a factory at Wadala and head office at Ballard Estate• In
this appeal, we are concerned with the monthly rated workmen
at the Wadala Factory. In this factory there are about 375
daily rated workers and 80 monthly rated clerical and sub-
ordinate staff • The total labour strength all over India is
about 3000 daily rated workers and 1000 monthly rated clerical
- '
and subordinate staff.
\

- r~
F In the year 1950, there was an industrial diSpute \
pertaining to the pay scales and dearness allowance of the I

. ' workmen in this factory. An award was passed in this dispu ~ .I

by the concerned Industrial Tribunal in reference No· IT 82 of
19 S0· By this award pay scales and fixed dearness allowance
were introduced w.e.f. 1-7-1950, with the consumer price inde;
G in Bombay at 312 pointe in 1950. In 1957, the index rose bY 5 ~
points and stood at 367 points. There was another industrial
dispute in 1958 in reference IT No. 77 of 1958 resulting
the award published on the 21st May 1959 introducing th
i:
slab system of O.A. w.e.f. l-2-195S. Thlaaward was not
challenged by the Company at any time.
H
In 1964, the labour sought revision in the pay
·.--
L
.-
MONTHLY-RATED WOIU<MEN v. lNDlAN HUME PIPE co. [KIIALID, J.] 489

for the monthly rated clerical and subordinate staff, as a
A
consequence of which reference IT No. 47 of 1964 was made
resulting in an award published on 30-12-1965, which provided
marginal increase in the basic pay scales, mainly on the
ground that the slab system was working satisfactorily.

2. · In this Company the daily rated operatives were
B
getting the old textile scale since the year 1942 which was
raised to the revised textile scale as D.A. by an award. Thus,
the daily rated operatives and the monthly rated clerical and
subordinate staff we re paid D.A. on different basis and at
different rates in this Company. As there was no revision in
the pay scales from 1950, for about 22 years a demand was made
for revision in pay sc... les for monthly rated clerical and
subordinate staff in the year 1972. This demand was referred
c
to adjudication in reference IT No. 42 of 1973 as . a
consequence of which an award was published on 7-7-1977. The
clerical and subordi '1~te staff in the head office of this
Company were also being given the slab system of D.A. This
award observed that there should not be any disparity ·in the D
D.A. between the monthly rated factory staff and the head
office staff.

3. while the wage structure stood thus, the Company gave
notice of change for doing away with slab system of D.A. by
notice dated 15-7-1975, in respect of the head office staff E
and the monthly rated factory staff. The notice of change in
respect of the' head office staff was not pressed since a
settlement was · reached between the parties. As per this
~A settlement arrived at in July 1976, the D.A. at consumer price
· index 1380 points was merged in the revised consolidated pay
.e.
scale of different categories w f. 1-9-197 s. Although in F
September, 1975, the cons~r price index figure was 1270
points, it was taken notionally as 1380 for the purpose of
merger, indicated above, providing for review of consolidated
pay scales if the consumer price inde~ moved high. The notice
_., of change in respect of monthly rated factory staff was,
however, referr~d to adjudication. The Company's claim was to G
do away with the slab systec of D.A. and to substitute it by
revised textile scale. The Union filed a written statement
justifying continuity of the slab system which was in vogue
for 17 years. The Industrial Tribunal gave the award, impuged
in this appeal, on 27th October • 19~0. The Tribunal came to
H
.....
490 SUP~ffi COURT REPORTS [19861 2 s.c.a.

.....,..'
A
the conclusion that the employer was justified in seeking
abolition of the slab system of D.A. and substituting it with
r
the textile scale of D.A. affording 115 per cent neutra-
lisation. ·

4. The Tribunal said that. the workmen should be paid
D.A. at 115 per cent of the revised textile rate in the same
manner in which "the daily rated workmen are paid their D.A. -~
B
at the prevalent cost of living index in the month of
November, 1980 or if such index. number is 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 .._ ~
1
were likely to lose quite a substantial amount of their D.A. j
However, the Tribunal got. over this concern stating that it
c was inevitable, when attempt was made to bring about ,r;
uniformity and parity among the workmen of the same company J
working at . the same place doing sirullar work. The Tribunal j
I
' felt conscious of another distressing result of the award. The
n Tribunal felt that if the parity scheme was to come into force ·
!
D "either from the date of the demand or from the date of J.
'l !
reference, another unfortunate happening wou ld take place in
r that the workmen would be liable to ref und a lot of amount .
excessively recovered by them as and by way of D.A. on account 1
I·· !
of slab system." The Tribunal felt that "it would be too harsh '
~
• and unkind to such workmen" and therefore held that the award
I
I E would come into force prospectively w.e.f. 1-11-1980. The ~
'!ribunal, not rest content with the expression of concern for "!

workmen, gave another palliative to them lest the reduction in
their D.A. should cause them dislocation financially all of 8 f
sudden and therefore observed that the reduction in the~ J
monthly emoluments of the wo rkmen should be a gradual process •
!. "so that they are able to bear the burden and can learn to
, .
.. F
adjust themselves with little less income month to month•u 'The
reduction was, therefore, directed to be spread over equallY
for a period of six months from 1-11-1980.

5. When the matter Came up bef ore this Cour t on
c 15-12-1980, special leave was granted and the following
interim relief wa8 given to the appellants.

"Special leave granted, Hy way of int:erim relief
it 1 a l lere by directed that the difference in the
he
D.A. a'tiarded by the Industrial Tribunal snd t.
: K
MONTHLY-RATED WORKMEN v. INDIAN HUME PIPE CO. [KHALID, J.] 491
A
D.A. being paid on slab system which is directed to
be reduced phasewise on monthly basis of l/6th,
reduction will be implemented i.n payments to be
made in the months of December, 1980 and January,
February, March, April and May, 1981, but shall be
based on monthly wages thereafter from payments in B
the subsequent months and this will be subject to
the further direction of this Court. Appeal be
expedited ••••••••••••••• "

This interim order was modified by the Vacation Judge on
14-3-1981, as follows :
c
"The order passed by this Court on 15.12.80 to
continue till the end of August, 1981 on the
appellants agreeing to reimburse the management in
case they fail in the appeal which reimbursement
will be by way of deduction from their dues."
D
6. We will now proceed to consider the rival contentions
put forward by the parties in support of and against the
award. The Company, in justification of their change of notice
r- and defending the award passed, put forward their case as
follows:
E
The Company manufactures various pipes, cement concrete
pipes as well as steel pipes for Hydro Electric Projects.
These products are manufactured as per definite orders and
specifications by governmental bodies and other local
authorities, unlike other industrial units which are at
"(. liberty to manufacture their products and market them. Their F
products are usually bulky in nature, making transport
difficult and costly. For easy transport of these bulky
products, the Company decided to establish as many as sixty
factories all over India to cater to the needs of the local
markets ang to make them easily accessible to avoid damage to
their products and. he~vy transporting charges. The products of G
the Co~any have only ~ limited market and therefore, has to
face keen competit~on unlike cement, steel, sugar, chemicals
etc. which have an · expanding market and which can be
programmed in anticipation of sale.

The Comp'any has three thousand .daily paid workmen and H
chousand mOnthly paid workmen all over India. Out of these,
492 SUPREME COURT REPORTS [19861 2 s.c.R.

A
the appellants form only 80 monthly paid workmen, employed in
Wadala manufacturing factory. The slab system of dearness
allowance, according to the Company, has been universally
condemned by successive Tribunals. The appellant - Union
enjoys a privileged position out of this four thousand workmen
of the Company all over India. While conceding that the
B appellant - Union had been enjoying the slab system of
dearness allowance till the reference was made, it is stated ~
that at the time the slab system was introduced it was never
conceived by the Tribunals that the cost of living index would
spiral upto such great heights as to make payments difficult.
The dearness allowance enjoyed by the appellant - Union is so
·C high in certain cases that neutralisation is at rates IIl.lCh;
higher than 100 per cent which is discouraged and is ~
disapproved consistently by this Court and other Industrial ~
Tribunals. It is further stated that the Company does not have
the capacity to pay the slab system of dearness allowance and
in case the remaining monthly rated workmen put forward such a
D claim, the respondents will be forced to close down their
factories.

The appellant - Union pleaded that the award of the
Tribunal was defective both in law and on facts. The Tribunal ~
did not have any material before it compelling it to change a
E system that had satisfactorily worked for 18 years and in
effect had become part and parcel of the service conditions of
the workmen. The findings of the Tribunal that the slab system
had become unscientific and improper, that continuance of the
system was not in national interest or in public interest,
that ever since slab system was introduced neutralisation had
F become more than 100 per cent and that the slab system·)'
confined to the appellant alone would create disparity and
discontent among workmen are according to the appellants not
based on evidence. The observation in the award that the Union
did not bring on record any evidence to show that wages paid
to them were far below the living wage or to show that the
G modification sought would cause them hardship which they would
not be able ·to stand is incorr~ct and is made without being
faithful to the facts and evidence in the case. With these
rival contentions in view, we will now proceed to consider the
award.

H 7. The dispute arose when the respondent-company served a
MONTHLY-RATED WORKMEN v. INDIAN HUME PIPE CO. [KHALID·, J.} 493

~ notice under Section 9-A of the Industrial Disputes Act. The
A
dispute referred to arbitration reads as follows :

nThe rate of payment of Dearness Allowance payable
to monthly rated clerical and subordinate staff
working at the Wadala factory will be changed and
will be worked out as per revised Textile scale
B
calculated on the bas is of working days in the
month with a ceiling on dearness allowance payment
at consumer price index number for working class of
Bombay at 800 (base 1933-34 : 100) with effect from
1975."

' y It was the TribWlal presided over by Shri Sawarkar, in I. T.
· I No. 77/58 by its award dated 21.5.1959 that introduced the
c
~ "f slab system of dearness allowance first. Before making the
award, the Tribunal considered the various contentions put
forward by the company. The Tribunal considered the nature of
this industry and held that it was an Engine~ring concern, and
a member of the Engineering Association of India. The Tribunal
D
examined the scales of dearness allowance in eight different
units of the Engineering Industry and concluded that the total
emoluments of the monthly rated staff of the Indian Hume Pipe
r-- Company Ltd., at its Wadala factory (i.e. Rs. 125 to Rs. 385)
were far lower than those of the other concerns with which
they were compared. This Tribunal repelled the plea that an
E
increase in dearness allowance woul~ cause disparity between
the workmen at the head office and at the factory and passed
~ the award introducing the slab system as follows :

Slab D.A. at cost of living VARIATION
~ index 311-320. per 10 pts.
F
1 - 100 65% of the basic salary or 5%
Textile scale calculated on the
basis of the number of days in
the month whichever is higher.
101 - 200 30% -do- 2%
G
~ 202- 300 IS% -do- 1%
~ 301 & above lO% -do- 1%

H
494 SUPREME COURT REPORTS [19861 2 s.c.R.

A Dearness allowance was being paid to the appellants at ·~
I

this r~te without any objection by the Company till the notice
of chat~e was given. It has to be borne in mind even at the
/

outset that the reference was occasioned because of the notice
of change given by the Company. It was therefore necessary for
the Company to make available before the Tribunal all evidence
necessary to justify its stand for a change from the existing
B system. We were taken through the award in full by the learned
Counsel for the appellants. All that we find in the award, by~
way of justification for this change, is that the Company
would be confronted with similar demands by the workers in its
other factories, that it has no capacity to pay the dearness
allowance at this rate, that it would result in more than 100
c per cent neucralisation and that this system had not found "'( "
favour with many of the Tribunals who considered the question '.
of the dearness allowance in Maharashtra. 1(

We will presently refer to some portions of the award to
see whether the Tribunal was justified in doing away with the
D existing scheme and thus denying to the workmen what they were
getting till the award was made. But before we do so, we would
like to show the effect of the award on the emoluments of the
workmen involved in this case if the award were to be~
implemented.

E TABLE-I
Monthly Pay at Monthly Pay at Index Reduction in
Index 1771-1780 1771-1780 that would the monthly
available prior be available as per emoluments. ,..,-
to the award the award.
under challenge.
F 'i
Basic D. A. Total Basic D.A. Total
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
500 1,590 2,090 500 542 1,042 1,048
400 1,434 1,834 400 542 942 892
300 1,278 1,578 300 542 842 736
G 200 l, 117 1,317 200 542 742 575
100 795 895 100 542 642 253~
40 544 584 40 542 582 2 ..

The table below shows the total monthly pay of the above
workmen and the consolidated pay that similarly placed workmen
H get at the head office.
MONTHLY-RATED WORIOO:N v. INDIAN HLME PIPE CO. [KHALID, J.] 495

TABLE II A

Basic Dearness Total
--------------------------
Total Monthly Difference
pay allowance monthly monthly consoli- between
as per pay pay dated total pay
slab sys- packet pay packet of
tem D.A. of packet head B
applica- Wadala at head office
ble at Factory office workmen
Index work- as per and total
1771-1780 men as state- pay packet
prior to per the ment of similar
the award award submit- workmen at
ted by Wadala c
the Factory as
company awarded
before the
Tribunal

Rs. Rs. Rs. Rs. Rs. Rs •. D
500 1,590 2,090 1,042 1,815 773
400 1,434 1,634 942 1,635 693
~ 300 1,278 1,578' 842 1,380 538
200 1,133 1,347 742 1,185 443
100 795 895 642 790 148
------------------·------------------------------------
The first table glares one in the face. The reduction is
E

1
substantial in most of the cases. Mr. Pai, the learned counsel
"1 for ~he company had to agree that as per the award the
difference in the dearness allowance was substantial and the
~ damage to the workmen was not inconsequential. However, he
tried to get over this inconvenient position with the plea F
that continuance of the scheme would spiral up the dearness
allowance so much that it would render the working of the
Company difficult and create wide disparity between these
workmen. and others. The second table which shows the
difference between the pay packet of Wadala Factory workmen
and the head office was explained away by Mr. Pai with the G
~ plea that the head office workmen had bigger responsibilities
and did better work. These justifications put forward by him,
have been echoed by the Tribunal also.

As indicated1earlier, we will now refer to the award
H
496 SUPRFl1E COURT REPORTS (1986] 2 s.c.R.

A under challenge. The company had a case that out of its sixty }-
factories, each factor-y should be treated as an independent
unit. This contention did not find favour with the Tribunal.
According to us, the Tribunal rightly held that since there
was no functional integrality, the units had to be taken as
one. The Tribunal also found that the Company's financial
position taken as a whole was not only satisfactory but quite
B z:;ound till 1979.

The Tribunal committed an error by overlooking the
circumstances under which reference was made and casting the
burden wrongly on the workmen to prove that a change in the
system was not ne.cessary. The Tribunal assumed that so far as
c the Bombay Region was concerned) it was an admitted fact that \...oilllilll
the daily rated workmen at Wadala factory and the staff at the ,..
head office were not paid wages as per the slab system. This ¥
assumption is wrong because the slab system was available at
the head office and for the daily rated workmen at Wadala upto•f
the year 1976. The Tribunal apprehends that if the slab system
D was introduced in all the factories the net result would be
that the whole company will have to be closed down. This
apprehension is without any foundation because at the time the
Tribunal considered the dispute there was no demand from any
region for the slab system. D1e Tribunal admits that the slab -4rf
system hact been in vogue for 18 years and that it had worked
E satisfactqrily and had become part of the service conditions
of the mQnthly rated workmen. However, the Tribunal observes
that the system could be revised if it was shown that the
system had out-lived its utility. The justification for this ~~
observation is that at the time the slab system was introduced
no one fore-saw the spiralling rise in the cost of living ,
F index and that it would work against the principle of parity Y
and uniformity and the danger of the subordinate staff getting
more emoluments than their officers who might be recently
employed. These are all assumptions without necessary
materials and this is the second error committed by Tribunals.
It is not uncommon that even in prestigious institutions
G recently employed officers get emoluments less than the
subordinate staff. On this plea, the benefits that the workmen ~
were enjoying till then should not be denied to them. To say
that the system had become 'unscientific' and 'improper'
because the workmen were getting fantastic amount of dearness
allowance was again without necessary material. 'The Tribunal;:-
·H
,•:,
1••
...
/~
MONTHLY-RATED WORKMEN v. ·INDIAN HUME PIPE CO. [KHALID, J.] 497
J
:'
:•

<'

~f then proceeded to say that change in the slab system was A ,.

necessary in the ~·larger interest of the country", "in the
interest of social justice", "in the interest of jus tice and
11
fair play11 , to avoid industrial unrest.,, 11genera1 interest of r
:-.
the company and in the larger interest of the nation. 11 These
·• are empty verbiage without any basis on the facts of the case.
, The discussion in the award that continuation of t he dearness
~ allowance would bring about neutrali&ation above 100 per cent
·1 is also not supported by sufficient materials. The Tribwtal
~ devoted some discussion in support of the highly placed
,j officers and went to their rescue with the plea t.hat they were
· ~ - ·""" subject to taxation rendering their salaries modest. We wish
J:' to state that all these statements could have been avoided in .,
' I
i a matter where the Tribunal had only to consider whether the c
:~ . ·. management was justified in trying to upset a scheme that had 1
·'
~ worked satisfactorily for a period of 18 years. We do not
propose to make further comments upon the award of the
Tribunal. Suffice it to say that the whole approach is \•

erroneous and the conclusions were arrived at on a s sumptions '·
1- ·
;

Without acceptable evidence. The management had not produced D I
'·
.·
before the Tribunal sufficient evidence to persuade it to
change the existing system. It may be that the slab s ystem did
not find favour with some other Tribunals. But that is no
reason why a system that had existed for a long period of time
Should be stopped to the detriment of the workme n without
£
COmpelling reasons.

Notice of change was given by the company to bring about
Parity or uniformity of D.A. in respect of its workmen. The
:. f Tribunal accepted this case of the company in passing the
~~- · award. A close scrutiny of the facts of the case, however,
F
would indicate that such a parity was not possible and that
the company also knew that parity was impossible of

~1-
achievement. This is evident from the fact that notice of
. change did not relate to all the workmen in the company • It
Will be seen that the company had three systems for payment of
dearness allowance i.e., dearness allowance based on revised
G
.,. ~ teJttile for daily rated factory workers; dearness allowance
1 lllithout ceiling for JDOnthly rated factory staff and
I ton.aolidated wages and dearness allowance for KOOnthly rated
lif:ad Office staff The Company has not shown that it had
.lldovttd a Uniform ~earness allowance system for all its wor~-
I
'
1 a.tn even in the Bombay region. 'Therefore, the Tribunal s
H
'· ~
498 SUPREME COURT REPORTS [19861 2 s.c.R.

A conclusion based on the object of achieving uniformity in )...
dearness allowance does not appear to be correct.

Mr. Pai learned counsel for the respondent-company took
us through the various awards passed by different Tribunals in
his attempt to impress upon us the fact that such Tribunal had
not only discouraged the slab system of dearness allowance but
n had even condemned it.

In the case of Hind Cycles Ltd., an award was given by
Mr. M.R. Mehar, Industrial Tribunal, Bombay, wherein it was
observed as follows :

c " •••• • The slab system was devised when it was not U
expected that the consumer price index would shoot ~
up to the extent that it has with the result that
where the slab system is followed (as in the ..
concerns listed in Exhibit U-3) the dearness l
allowance of monthly paid staff have shot up
D completely out of proportion to basic wages with
the result that in industries and occupations in
which that system is not followed but some other
system is followed the dearness allowances, even
though linked with the index, are much lower than~
the dearness allowance in the concerns listed in
E Exhibit U-3 •••••••••••• "

In the case of Shaw Wallace & Co.
Ltd., the Industrial
Tribunal, presided over by Mr. M.R. Mehar, observed as ~
follows :

F " ••••••• I have made reference to the dearness'J'
allowance in Banks, Mill companies and in
Government offices not because these are concerns
comparable with Hind Cycle but to show the varying
systems of dearness allowance and to illustrate how
the total emoluments of employees in industrial
G employments in which the slab system referred to
above prevails have shot up so as to be completely ,t~
out of proportion with those employees doing
similar work in employments in which there is
either fixed dearness allowance or the dearness
allowance though linked with the index, is not on
H
MONTHLY-RATED WORKMEN v. INDIAN HUME PIPE CO. [KHALID, J,] 499

the slab system. Thus, by the slab system a certain A
class of fortunate employees have been absolutely
protected against rise in cost of living and have
not to bear hardships which other larger sections
of employees have to suffer on account of
inflation •••• "

-+The same Tribunal has this to say in the case of the Wadala B
factory, with which we are concerned, in its award dated 6th
December, 1965 :

"This dispute concerns only the monthly rated staff
of the factory. The demands concerning daily rated
staff is pending before a Board of C
Conciliation •••••••••• ! have therefore to make the
award having in mind the total emoluments i.e. wage
scales and dearness allowance prevailing in
factories of this size in the region belonging to
other prosperous concerns in the engineering
industry. D

In considering the demands for improved wage scales
the total emoluments have to be borne in mind.
While the daily rated staff get the textile rate of
dearness allowance the monthly rated staff get
dearness allowance according to the slab system at E
the same rate as for the Head Office, and which
dearness allowance is very satisfactory •••••••••• "

The Tribunal did not interfere with the slab system prevalent
vi,n the Company.
F
In the case of Central Tin Works, a demand was made for
the intorduction of the slab system. But the Industrial
Tribunal, Bombay, presided over by K.R. Pawar, raised the rate
of dearness allowance to 100 per cent of the cotton textile
rate.
G
y¥ In the case of Voltas Limited, in an award given on the
30th September, 1965, the Industrial Tribunal presided over by
t-lr. v;A. Naik raised ceiling of maximum dearness allowance
from Rs. 400 to Rs. 450. Fixation of the ceiling, according to
Mr. Pai, is to contain the rigours of the slab system.
H
500 SUPREME COURT REPORTS [1986] 2 s.c.R.

In Forbes Forhes Compbell & Co. Ltd., an award was passed~
A by the Industrial Tribunal presided over by Mr. V.A. Naik on
23-12-1969, on the claim for raising the dearness allowance
declining the demand.

Mr. R. D. Tulpule, Industrial Tribunal Bombay, passed an
award in the case of Polychem Ltd., on 9th June, 1970. In this
case, the Tribunal noticed the criticism of the slab system o~
B dearness allowance and sought to rectify it by granting 110
per cent of the revised textile dearness allowance along with
fixed ad-hoc payment tapering with increase of the slab of the
salary.

Considerable stress was made by Mr. Pai on the following~
C observation of the Tribunal at page 246 of Volume VII paper'(
book :

"I have not come across a case where slab rate of
dearness allowance was introduced for the first
time."
D
The answer to this observation is that in the case of the
Company with which we are concerned it was introduced for the~
first time in 1958. We may also state that we have not come
across any award wherein the slab system once introduced was
abolished except in one case.
E
In the case of Mazagaon Ihcks, an award was passed by the
Industrial Tribunal presided over by Shri S.A. Patel on 13th Y
December, 1984, substituting the existing scheme of dearness
allowance based on the slab system by a revised textile seal~ /

of dearness allowance. This was done following the decision of
F this Court in tilllck HUon Ltd. v. Iillick & Allied t;cwpanietJ
E.ployees Union, [1975] Supp. S.C.R. 453 rendered on May 2~
1975. It can be argued, perhaps justifiably, that in this case
this Court introduced a ceiling on dearness allowance in place
of slab system available in the Mazagaon Docks. This decision
was pressed into service in support of the submission that- the
G situation obtaining· in the company with which we are dealingy._. .
is the same as in the above case and to contend that the slab
system should yield place to at least a ceiliqg on dearness
allowance.
MONTHLY-RATED WORKMEN v. INDIAN HUME PIPE CO. [KHALID, J.] 501

~ We have no quarrel with the conclusion arrived at in the A
above case on the facts of that case. However, the conclusion
arrived at in that decision cannot be applied in a general
manner in all cases. In that case, the employer's grievance
was this: The post of junior executives is a promotional post
for supervisors. Still the fo~er were drawing less emoluments
than the latter. This is because there was no ceiling on B
-~dearness allowance in respect of workmen and supervisors. The
employer produced a chart in support of his case and contended
that this would restilt in indiscipline and unrest in this
industry. It was in this context that this Court laid down
fourteen different aspects, not exhaustive in their scope,
which had to be taken into account before tinkering with the
I dearness allowance. The Mazagaon Docks case has taken support c
f ) from Killick Nixon U:d. case without sufficient material to
sustain its conclusion that slab system should be abolished to
avoid huge distortion of wage differences among the persons
employed in that concern. A close study of Ki.llick. Nixon Ltd.
case will bear out that this Court did not lay down that in
all cases slab system of dearness allowance should be D
abolished or done away with to the detriment of the workers.
All that this Court held in that case was that the employer
• having made out a case for putting a ceiling on dearness
allowance, it was for the Tribunal to decide at what
particular amount there should be a ceiling on dearness
allowance. An attempt was made by the employer in that case to E
press into service the view of the National CoDIJ.lissioner of
Labour to ascertain the minimum wage in the Company at which a
~ worker would require complete neutralisation of the cost of
living and then find the aiOOunt necessary as a protection
~gainst his real wages. This was not accepted by this Court •.
The Court observed F

" •••• we do not wish to lay down as an invariable
rule that in all cases there should be ceiling on
D.A. Whenever a case of this nature comes for
industrial adjudication, it will always be a
delicate task for the Tribunal to s'trike a balance G
keeping in view the above principles, weightage of
each one of which being variable according to
conditions obtaining. Whether or not there should
be a ceiling on dearness allowance in a given case
must depend on the facts and circumstances of that
H
502 SUPREME COURT REPORTS [ 1986] 2 S.C. R.

case. There can be no inexorable rule in that
A respect. We have formulated the various principles
which must be taken into account by the Tribunal in
determining this question, but the most dominant of
these must always be that of social justice, for
that is the ideal which we have resolved to achieve
when we framed our Constitution••••••••• "
~-
B Thus, the ratio of that case cannot be extended to every
case to interfere with the existing D.A. Scheme, which is
beneficial to the workmen.

Mr. P.S. Mavalenkar, Industrial Tribunal, Bombay, in an
award dated 30-ll-1976, imposed a ceiling of Rs. 700 on the '\
c slab system of dearness allowance. ¥ ..
We thought it necessary to refer to the various awards
read by Mr. Pai only for the completeness of the Judgment. It
has to be borne in mind that in most of these cases, awards
were passed at the instance of the employees when demands were
D made for raising the dearness allowance paid to them. Here, we
have the case of the employer trying to get over a system of
dearness allowance which had worked smoothly for 18 years, on ~
the specious plea that at the time the slab system was
introduced, it was not in the expectation of anyone that the
cost of price index would spiral up so much as to make it
E impossible for the Company to pay according to this scheme.
From the materials available we do not find that this plea can ~
be accepted. The records produced show that despite this ,_
1
system of dearness allowance the Company has been making
profits and has been improving its position year by year. ;f
F At page 103 of Volume I paper book, the appellants have
produced a table showing dearness allowance paid by seven
companies including the respondent company at the slab system
to show that other companies have been paying more dearness
allowance to their workmen than the respondent company with
inconsequential differences in certain pay scales. They have
G also given a comparative statement showdng how the increase in ~
total wages including dearness allowance as per slab system,
for pay scale of Rs. 100 to Rs. 500 is less than .the
percentage of increase in consumer price index. The percentage
of increase in consumer price index of 2642 over CPI 320 in
MONTHLY-RATED WORKMEN v. INDIAN HUME PIPE CO. [KHALID, J.] 503

-4,
1958 ls 826 while the percentage of increase in wages for the
.s·ame CPI is only 806. A

In reply to the Company's case of capacity to pay, the
appellants have produced at page 101, Volume V paper book, a
table showing the net profit and the gross profit of the
CQmpany from 1979 to 1984. The net profit has increased from a
~ sum of Rs. 19.65 lakhs in 1978 to a sum of Rs. 176.38 lakhs in
B
1984 and the gorss profit from Rs. 115.60 lakhs toRs. 439.11
lakhs, after paying the slab system of dearness allowance to
the appellants. They have also produced a table showing the
~inancial position of the Company from the year 1979 to 1984.
Sales have increased from Rs. 1221.56 lakhs in the year 1979
I
. to Rs. 2193.94 lakhs in the year 1984 and the dividend on
c
.,. equity capital from 12. 80 per cent in 1979 to 18 per cent in
1984.

We do not think it necessary to deal at length about the
evolution of the concept of dearness allowance. Suffice it to
say that this Court has, often times, emphasised the need for
a living wage to workmen instead of a subsisting wage. It is D
indeed a matter of concern and mortificatlon that even today
~ the aspirations of a living wage for workmen remain a mirage
and a distant dream. Nothing short of a living wage can be a
fair wage. lt should be the combined effort of all concerned
including the Courts to extend to workmen a helping hand so
that they get a living wage which would keep them to some E
( extent at least free from want. It is agalnst this background
• that a claim by employers to change the conditions of service
of workmen to their detriment has to be considered and it is
':'against this background that we have co~idered the award
review. We are not satisfied that a case has been made out on
the facts available, for a change. F

The question is often asked as to whether it would be
advisable for Tribunals and Courts· to revise the wage
structure of workmen to their prejudice when a dispute arises.
Normally the answer would be in the negative. Tribunals and
f Courts can take judicial notice of one fact; and that is that G.
the wages of workmen, except in exceptionally rare cases, fall
within the category of mere "subsisting wages". That being so,
it would be inadvisable to tinker with the wage structure of
workmen except under compelling circumstances. Employers have

H
504 SUPREME COURT REPORTS [1986] 2 s.c.R.

A
seldom displayed a cooperative attitude where wage structure ~
of workmen are devised. They have never showed a willingness
for the involvement of the labour with the capital so as to
engender a participative labour capital relationship. This is
a reality that Tribunals and Courts have to reckon with that
being so, Courts and Tribunals have necessarily to keep their
hands off from upsetting a wage structure that has
B
satisfactorily worked for a long time. The sweat of the labour~
is never reflected in any balance sheet, although the latent
force behind every successful industry is this sweat. With
their pres~nt Mage structure, the labour just exist. No one
should try to deny them even this bare source of existence.
c In re-inforcement of our conclusion, we will refer to "-..
the following passage in the case of Crown Aluadnium WOrks v. ~
Their Workmen, [1958] S.C.R. 651 :

"The question posed before us by Mr. Sen is : Can
the wage structure fixed in a given indus try be
D
never revised to the prejudice of its workmen ?
Considered as a general question in the abstract it
must be answered in favour of Mr. Sen. We do not
thir~~ it would be correct to say that in no ~
conceivable circumstances can the wage structure be
revised to the prejudice of workmen. When we make
E
this observation, we must add that even
...
theoretically no wage structure can or should be ~
revised to the prejudice of workmen if the
structure in question falls in the category of the
bare subsistence or the minimum wage. If the wage 1

structure in question falls in a higher category,~
F
then it would be open to the employer to claim its
revision even to the prejudice of the workmen
provided a case for such revision is made out on
the merits to the satisfaction of the
tribunal •••••••••• It would be interesting to notice
in this connection that all the tribunals that have
G
dealt with the present dispute have consistently
directed that existing wages should not be reduced ~
to the prejudice of the workmen. In other words,
though each tribunal attempted to constitute a wage
structure in the light of materials furnished to
it, a saving clause has been added every time
MONTHLY-RATED WORKMEN v. INDIAN HUHE PIPE CO. [KHALID, J.] 505

protecting the interests of such workmen as were A
drawing higher wages before. Even so it would not
-be right to hold that there is a rigid and inexora-
ble convention that the wage structure once fixed
by industrial tribunals can never be changed to the
prejudice of workmen. In our opinion, therefore,
the point raised by Mr. Sen must be answered in his B
favour subject to such relevant considerations and
-+ limitations as we have briefly indicated."

We are not prepared to accept the submission made by the
learned counsel for the respondent that the slab system has
not been approved either by Tribunals or by Courts, not to say
( tha.t they have been condemned. In the case of Unichea C
y Laboratories Ltd. v. Tbe Vorben, [1972] 3 S.C.R. 567 this
Court has occasion to consider the slab system and this Court
gave its seal of approval to this system. This Court after
considering the various materials placed before it observed
that in the . Bombay region there were several Pharmaceutical
units adopting slab system of dearness allowance. We read the 0
following passage in support of our conclusion that the.slab
system did find favour with this Court on mre than one
'- occasion :

" •••• When once such units can be taken into account
as comparable units, the pattern of dearness E
allowance obtaining therein can very well be
considered to ascertain the system ·adopted by the
'i' industry as that will show the trend in the region.
As pointed out above at least 11 units, referred to
in Ex. DU.l have adopted the system now introduced
in the case of the appellant by the Tribunal. Under F
those circumstances, when such system is prevailing
in the industry in the same region, it cannot be
held that the Tribunal has coamitted an _error, in
introducing a similar pattern in the case of the
appellant. The slab system has been approved by G
this Court as will be seen by the decisions in
Greeves Cotton and Co. and Others v. 'lbeir workmen,
[1964] s s.c.R. 362 and Bengal Cbe.deal and Pbar.a-
c:eutical Works Ltd· v. Its workmen, [1969] 2 s.c.R.
113. Even in Bombay that such a pattern of dearness
allowance as the one introduced in the case of the H
506 SUPREME COURT REPORTS [19861 2 S.C.R.

A appellant is existing, is seen by the decisions of ~
this Court in Greeves Cotton aud Co. and others v.
Their wor"-en and Kamf.ni Metals and Alloys Ltd. v.
Their wotk.en, [1967] 2 S.C.R. 463. No doubt the
industries therein were not pharmaceutical units.
But that such a system exists in Bombay region is
clear from the above decisions."
B
This Court then noticed that in a number of awards rendered +-
during the year 1965 to 1968 the slab system of dearness
allowance was adopted and wound up by saying :

"These facts clearly show that the scheme of
c dearness allowance provided in the award before us ~
in respect of the appellants is not anything new." v""

(at page 604)

The only grievance that the respondent's counsel can have
D against these observations is that the Court in those cases
were considering pharmaceutical units which were not
couparable with the unit in question. We do not agree that
this distinction can be pressed into service to deny the ~
workmen the slab system existing in this unit. The Tribunal
has found this unit to be an engineering unit which is not in
E a far less disadvantageous position than pharmaceutical units.

The learned Counsel for the respondent made a strong plea
for substitution of the exising system of dearness allowance ~
with ceiling on the quantum of dearness allowance. We have
already indicated that in the absence of compelling materials~
F a system that gives benefit to the workmen caqnot lightly b~
interfered with to their detriment. The theory of ceiling on
the quantum of dearness allowance cannot be accepted since
under the prevailing conditions there is no control over the
prices of essential coiDJOOdities and as such a ceiling would
not give sufficient cushion when prices of essential
G commodities continuously rise.

Mr. Pai apprehended the possibility of similar dema~l by ~
the workers in other factories which would render the working
of the factory itself difficult and sometimes co~el it to
-
close them down. He has made available to us a statement
H
..
MONTHLY~D WORFMEN v. INDIAN HUME ,PIPE ·co. [KHALID, J.] 507

r. . '·
' .=:-~~

sh~wing the amounts :. that ·. the company ·will have to dole out if
· the present system is · to c~mtinue. In respect of 80 monthly A
rated workmen the .difference payable will be Rs. 75,000 per
l month, · which works out to Rs. 9, 00, 000 per year. If this slab
system is to be introduced for 4000 employees, the liability

L will be about Rs. 4,50,00,000. Though at the first flush one
, would · be t .e mpted to agree .w ith Mr. Pai, the temptation will
'i disappear when we inform ourselves of the fact that in a B
catena of decisions this Court has laid down the
industry-cum-region basis . as ·the acceptable basis while
A~ working out dearness allowance. This is the usual alarmdst cry
. ;,., of the employers. ·Uniformity of wage structure throughout the
country if accepted will be giving a go-by to the well settled

L
."
principle of industry-cum-region. This · Court has time and C
again laid down the industry-cum-region principle whenever the
· question of wage structure arose.
1
f As an answer to this ·plea of the respondent, we will only

L
read the following passage from the Judgment in the case of
Work.en v. Indian Oxygen Ud. 1 to which one of us was a party. D

,
i
..
Desai J. while repelling the plea that in an industrial
undertaking which has an all India operationt the unit as a
whole should be considered, observed thus :

t
l
1114. On behalf of the l<armachari Union, it was
contended that in devising a dearness allowance E
formula, the region-cum-industry · principle should
ordinarily be accepted. · As pointed out earlier

L.
.· .., ·.....,
dearness allowance generally has a local flavour. A
man is exposed to the vagaries of the market where
he resides and works, even though he may be an
employee of a national, multinational or F
1 transnational industrial empire. The workmen is
concerned with the vagaries of price fluctuation in
{.
l' the area in which he resides and works for gain and
•
I. •
· to which he
region-cum-industry
is exposed. · Therefore, · the
principle · must inform
~ .
industrial adjudication in the matter of dearness G
r allowance. In Woolco-bers of lDdia Lt.d. v.
Woolwmbere Workers lmioo. (1974] l S.C.R. 504,

'
1 this Court following ita earlier decision in
Creeves Cotton a.od Co. V• Workmen. [1964) 5 S.C,R.

I
;
......_...~.._ .
362 held that in devising basic wages and dearness
.H
508 SUPREME COURT REPORTS [1986] 2 s.c.R.

A allowance structure, industrial adjudication ~
sometimes leans on the industry part of the
industry-cum-region formula and at other times, on
the region part of the formla as the situation
demands. This well recognised principle of
industrial adjudication cannot be given a goby on
the specious plea that the workmen are employed by
B an industrial undertaking which has an ail India
operation. In this case, the Tribunal has
overlooked this important principle of industrial, 1
adjudication ••••••••••• "

We have extracted the above passage to repel the argumen~
c that if the status quo is allowed to continue in this case,
there will be demands from other ..;ectors and other factories.
This is only a theoretical appretension with which we are not
concerned. We have repeatedly stated that in this case
reference to adjudication was made not at the instance of the
workmen, but at the instance of the employer who wanted to
D bring about a change in the existing system which had
satisfactorily worked for 18 years, without producing
compelling materials, in support of their claim.

On a careful consideration of the various questions-'
involved in this case, we are of the view that the Tribunal
E erred grossly in its approach to the questions raised and in
answering the reference in favour of the employer. We,
therefore, allow the appeal, set aside the award and dire~t
that the existing slab system will continue for the appellant y
unit._ The interim order passed on 14.3.1981 is hereby vacated.
The. res-pondent is directed to 'lay the cost of the appellant,
F. quantified at Rs. 5,000. "''

The Construction Employees Union of the
respondent-company in.tervened in the case and filed the:!,...
written arguments as dlrected by this Court. In the written
arguments, the said UniOn supported the appellant's case.
G

S.R. Appeal allowed.~

H