Holding

An employer may revise a wage structure to the prejudice of workmen only when the wages exceed the minimum‑wage level and the employer proves financial inability to bear the existing wage burden; otherwise such revision is impermissible.

Summary

The Madras‑based Reptakos Brett & Co. had for about thirty years paid its workmen a slab system of Dearness Allowance (DA) linked both to the cost‑of‑living index and to basic wages. In 1983 a dispute led the Industrial Tribunal to abolish the slab system and to order DA to be linked only to the cost‑of‑living index; the Madras High Court upheld that award. The workmen appealed to the Supreme Court, contending that the Tribunal and the High Court erred in assuming a pre‑war wage of Rs 26, in treating the DA scheme as over‑neutralised, and in allowing a revision that prejudiced the workers without proof of the employer’s inability to bear the wage burden. The Court held that an employer may revise a wage structure to the detriment of workmen only where the prevailing wages are above the minimum‑wage level and the employer satisfactorily proves financial incapacity; where wages are at or near the minimum‑wage level, no such revision is permissible even on grounds of financial stringency. Finding that the Tribunal had not examined the company’s financial position and that the workmen were entitled to at least a minimum wage, the Court set aside the Tribunal’s award and the High Court judgments, allowing the workmen’s appeal.

Issues considered

The legality of restructuring the DA scheme to the prejudice of workmen
Whether over‑neutralisation of DA justifies revision of the wage structure
Whether the wage structure in question is at the minimum‑wage level
Whether the employer’s financial stringency permits alteration of the DA scheme
Whether the Supreme Court’s jurisdiction under Article 136 is barred by the existence of any material supporting the award

Legislation cited

Constitution of Indias. Article 136
Industrial Disputes Act, 1947

Subjects

dearness allowanceminimum wageindustrial tribunalwage revisionover‑neutralisationArticle 136living wagehigh wage islandindustrial disputewage structure

Judgment

WORKMEN REPRESENTED BY SECRET ARY A
v.
MANAGEMENT OF REPTAKOS BRETT.
AND CO. LTD. AND ANR.

OCTOBER 31, 1991
B
[RANGANATH MISRA, CJ. AND KULDIP SINGH, J.]

Labour law:

Industrial dispute-Minimum wages-Determination of Dearness
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 ofIndia: D

Art 136: Industrial Tribunal and High Court acting in oblivion of
legal position causing manifest injustice to workmen-'Supreme
Court--Whether can interfere.

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
130 SUPREME COURT REPORTS [1991] SUPP: 2 S.C.R.

A 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
B 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-
c 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.
D
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
E 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-
I'
structure the DA scheme to the prejudice of the workmen on the
ground that the existing system had resulted in over-neutralization
.t-
F
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
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 Employees Un- B
ion, [1975) Suppl. S.C.R. 453, distinguished.

1.2 The employees are entitled to the minimum wage at all
times and under all circumstances. An employer who cannot pay the
minimum wage has no right to engage labour and no justification to
run the industry. (p. 137 CJ C
1.3 It is for the management, seeking to restructure the DA
scheme to the disadvantage of the workmen, to prove to the satisfac-
tion of the tribunal that the wage-structure in the industry con-
cerned is well above minimum level and the management is finan-
cially not in a po~ition to bear the burden of the. existing wage- D
structure. [p. 142 F]
.
2.1 The concept of 'minimum wage' is no longer the same as it
was in 1936. Even 1957 is way-behind. A worker's wage is no longer
a contract between an employer and an employee. It has the force of
collective bargaining under the labour laws. Each category of the E
wage structure has to be tested at the anvil of social justice which is
the live-fibre of our society today. [pp. 136 H, 137 A]

2.2 The Tripartite Committee of the. Indian Labour Confer-
ence'- 1957 has formulated five norms for the fixation of 'mini-
mum wage' (i) three consumption units for one earner disregarding F
earnings of women, children and adolescents; (ii) minimum food
requirement based on net intake calories; (iii) clothing requirement
at 72 yards per annuam for an average working family of four; (iv)
house rent corresponding to minimum area provided for under the
Government's Industrial Housing Scheme; (v) 200/o of total mini-
mum wage for fuel, lighting and other miscellaneous items. [p. 136 G .
D-G]

Express Newspapers (P) Ltd. v. Union of India, [1959) SCR 12,
followed. '

Standard Vacuum Refining Co. of India v. Its Workmen d Anr..
(1961) 3 ~CR ~36, relied on. H
132 SUPREME COURT REPORTS [1991] SUPP. 2 S.C.R.

A Keeping in view the socio-economic aspect of the wage struc-
ture the following additional component has also to be taken into
account:

"(vi) children education, medical requirement, minimum recreation
including festivals/ceremonies and provision for old ag"e, mar-
B riages etc. should further constitute 25% of the total minimum
wage."
The wage structure which approximately answers these six com-
ponents is nothing more than a minimum wage at subsistence level.
[p. 137 A-CJ
C 2.3 In spite of the promise by the Constitution of a living wage
and a 'socialist' framework to enable the working people a decent
standard of life, industrial wage, looking as a whole, has not yet
risen higher than the level of minimum wage. [p. 137 D-E]

3.1 Purchasing power of today's wage cannot be judged by
D making calculations which are solely based on 30/46 years old wage-
structure. The only reasonable way to determine the category of
wage structure is to evaluate each component of the category con-
cerned in the light of the prevailing prices. There has been sky-
rocking rise in the prices and the inflation chart is going up so fast
E
that the .only way to do justice to the labour is to determine the
money value of various components of the minimum wage in the
context of today. (p. 146 F-H]
,,..
3.2 In the instant case, the Company neither pleaded nor ar-
gued before the Tribunal that its financial position had so much
deteriorated that it was not possible for it to bear the burden of the
F slab system of DA; nor did the Tribunal deal with this aspect of the
matter while considering the demand' of the Company for re-struc-
turing the DA scheme. (p. 144 F-G)

· 3.3 Although the DA paid by the Company was somewhat higher
G
·
than what w~s being paid by the other similar industries in the
region, yet it .ci)uld not be shown that what was being paid by the
Company was higher than what would be required by the concept of
need based minimum wage. In any case there is a very long way
between the need based wage and the living wage. (p. 145 AB)

4. The Tribunal and the High Court acted in total oblivion of
H
the legal position. Consequently, manifest injustice has been caused
WORKMEN v. MANAGEMENT OF REPTAKOS BRETT. [KULDIP.SINGH, J,] 133

to the workmen by the award. It can, therefore, not be said that A
jurisdiction under Art. 136 stands repelled. [p. 145 CD]

Shaw Wallace & Co. Ltd. v. Workmen, [1978] 2 SCC 45 & The
Statesman Ltd. v. Workmen, [1976] 3 SCR 228, referred to.

Tbe Tribunal was not justified in abolishing the slab system of B
DA which had stood the test of time for almost 30 years and had
been approved by variou~ settlements between the parties and as
such the award of the Tribunal and the High Court judgments were
-. unsustainable. [pp. 144 AB; 145 DE]

Buckingham and Carnatic Mills Ltd. v. Their Workers, [1951] 2
L.L.J. 314 & Good Pastor Press v. Their Workers, [1951] 2 L.L.J.
718, referred to.
c -
.., '( CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4336 (NL)
~ of 1991, ·
I
D
From the Judgment and Ord.!r dated 14.9.1989 of the Madras High
Court in Writ Appeal No. 697of1989.

M.KRamamurthy, Mrs. Chandan Ramamurthy and M.A.Krishnamurthy
for the Appellants.

F.S.Nariman, R.F.Nariman, T.S.Gopalan, Raian Karanjiwala, Mrs.
E
Manik Karanjiwala, Mrs. V.S.Rekha and Sajai Singh for the Respondents.

The Judgment of the Court was delivered by

KULDIP SINGH, J. Special leave granted.
F
The Reptakos Brett & Co. Ltd. (hereinafter called the 'Company') is
engaged in the manufacture of pharmaceutical and dietetic speciality products ·
and is having three units, two at Bombay and one at Madras. The Madras
factory, with which we are concerned, ·.vas set-up in the year 1959. The
Company on its own provided slab system of Dearness Allowance (DA)
which means the DA paid to the workmen was liuked to cost of living G
index as well as the basic wage. The said double-linked DA Scheme was
included in various settlements between the Company and the workmen
and remained operative for about thirty years. The question for 0 ui con-
sideration is whether the Company is entitled to re-structure the DA scheme
by abolishing the slab system and substituting the same by the
Scheme-prejudicial to the workmen-on the ground that the slab system H
134 SUPREME COURT REPORTS · (1991) SUPP. 2 S.C.R.

A bas i;esulted in over-neutralisation thereby landing the workmen in the
bigh~wage island.

The first settlement between the Company and the workmen was "
... entered into on August 11, 1964. While accepting the double-linked DA it
further provided variable DA limited to the cost of living index up to
B 5.41-5.50. Further relief was given to the workmen in the settlement dated
July 18, 1969 when the limit on the variable DA was removed. _The
Company revised the rates of DA on August 7, 1971. Thereafter, two
more settlements were entered into on July 4, 1974, an1 January 4, 1979,
respectively. Slab system with variable DA continued to be the basic ,,.....
constituent of the wage-structure in the company from its inception.
c
The position which emerg~s is that in the year 1959 the Company on
its own introduced slab system of DA. In 1964 in addition, variable DA to .r-
)
the limited extent was introduced but the said limit was removed in the
1969 settlement. -The said DA scheme was reiterated in the 1979 settle- >
·-
ment. It is thus obvious that the slab system of DA introduced by the
D Company in the year 1959 and its progressive modifications by various
settlements over a period of almost thirty years, bas been consciously
accepted by the parties and it bas become a basic feature of the wage
structure in the Company.

The workmen raised several demands in the year 1983 which were
E
referred for adjudication to the Industrial Tribunal, Madras. The Company
in tum made counter demands which were also referred to the said Tribu- .
nal. One of the issues before the Tribunal was as under:-

"Whether the demand of the Management for re-structuring of
the dearness. allowance scheme is justified, if so, to frame a
r
F
scheme?"

The Tribunal decided the above issue in favour of the Company and
by its award dated October 14, 1987 abolished the existing slab system of
DA and directed that in future dearness allowance in the Company, be
G linked only to the cost of living index at 33 paise per point over 100
points of the Madras City Cost of living Index 1936 base. The Tribunal
disposed of the two References by a common award. The Company as /
well as the workm~n filed separate writ petitions before the Madras High I
Court challenging the award of the Tribunal. While the two writ petitions
were pending the parties filed a joint memorandum dated June 13, 1988,
I
H before the High Court in the following terms:
WORKMEN v. MANAGEMENT OF REPTAKOS BRETT. [KULDIP SINGH, J,] 135

"In view of the settlement dated 13.5.1988 entered into be- A
tween the parties, a copy of which is enclosed, both the parties
are not pressing their respective writ petitions except with re-
gard to the issue relating to re-structuring of dearness allow-
ance."
The learned Single Judge of High Court upheld the findings of the
Tribunal on the sole surviving l.ssue and dismissed the writ petition of the ·B
workmen. The writ appeal filed by the workmen was also dismissed by
the High Court by its judgment dated September 14, 1989. The present
appeal by special leave is against the award of the Tribunal as upheld by
the High Court. -

Mr..M.K. Ramamurthy, learned counsel for the appellantS has raised
c
the following points for our cosideration:-

(i) The Tribunal and the High Court grossly erred in taking Rs. 26
as a pre-war wage of a worker in Madras region and, on that
arithmetic, reaching a conclusion that the rate of neutralisation D
on the basis of cost of living index in December 1984 was 192
per cent.
(ii) Even if it is assumed that there was over-neutralisation-unless
the pay. structure of the workmen is within the concept of a
. 'living wage' and in addition it is proved that financially the
Company is unable to bear the burden-the existing pay struc- E
ture/DA scheme cannot be revised to the prejudice of the work-
men.
(iii) In any case the DA scheme-which was voluntarily introduced
by the Company and reiterated in. various settlements cannot be
altered to the determent of the workmen."
Before the points are dealt with, we may have a fresh-look into F
various concepts of wage structure in the industry. Broadly, the wage
structure can be divided into three categories-the basic "minimum wage"
which provides bare subsistence and is at poverty-line level, a little above
is the "fair wage" and finally the "living wage" which comes at a comfort
level. It is not possible to demarcate these levels of wage structure with
any precision. There are, however, well accepted norms which broadly G
distinguish one category of pay structure from another. The Fair Wages
Committee, in its report published by the Government of India, Ministry
of Labour, in 1949, defined the ''.living wage" as under: ·

"the living wage should enable the male earner to provide for
himself and his family not merely the bare essentials Qf food, · H
136 SUPREME COURT REPORTS (1991) SUPP. 2 S.C.R.

A clothing and shelter but a measure of frugal comfort including
education for the the children, protection against illhealth, re-
quirements of essential social needs, and a measure of insur- •r--
ance against the more important misfortunes including old
age."
"The Committee's view regarding "minimum wage was as-under:
B
"the minimum wage must provide not merely for the bare
sustenance of life but for the preservation of the efficiency of
the worker. For this purpose the minimum wage must also
provide for some. measure of education, medical requirements
and amenities."
c The Fair Wages Committee's Report has been broadly approved by
this Court in Express Newspapers (P) Ltd. v. Union of India, (1959] SCR
12 and Standard Vacuum Refining Co. of India v. Its Workmen and Anr.,
[1961] 3 SCR 536.

The Tripartite Committee of the Indian Labour Conference held in
D
New Delhi in 1957 declared the wage policy which was to be followed
during the Second Five Year Plan. The Committee accepted the following
five nonns for the fixation of 'minimum wage':

"(i) In calculating the minimum wage, the standard working class
E family should be taken to consist of 3 consumption units for one
earner; the earnings of women, children and adolescents should
be disregarded.
(ii) Minimum food requirement should be calculated on the basis of
a net intake of calories, as recommended by Dr. Aykroyd for an

F
average 1!;tdian .adult of moderate activity.
(iii) Clothing requirements should be estimated at per capita con- _I
,,.
sumption of 18 yarCls per annum which would give for the aver-
age workers' family of four, a total of72 yards.
(iv) In respect of housing, the rent corresponding to the minimum
area provided for under Government's Industrial Housing Scheme
should be taken into consideration in fixing the minimum wage.
G
(v) Fuel, lighting and other 'miscellaneous' items of expenditure should
constitute 20% of the total minimum wage."
This Court in Standard Vacuum Refining Company's case (supra)
has r~ferred to the above norms with approval.

H The concept of 'minimum wage' is no longer the same as it was in
WORKMEN v. MANAGEMENT OF REPTAKOS BRETT. [KULDii> SINGH, J,] 137

1936. Even 1957 is way-behind. A worker's wage is no longer a contract A
between an employer and an employee. It has the force of collective
bargaining under the labour laws. Each category of the wage structure has
to be tested at the anvil of social justice which is the live-fibre of our
society today. Keeping in view the socio-economic aspect of the wage
structure, we are of the view that it is necessary to add the following
additional component as a guide for fixing the minimum wage in the B
industry:-

"(vi) children education, medical requirement, minimum recreation
including festivals/ceremonies and provision for old age, mar-
riages etc. should further constitute 25% of the total minimum
wage." c
The wage structure which approximately answers the above six com-
ponents is nothing more than a minimum wage at subsistence level. The ·
employees are entitled to the/minimmn wage at all times and under all
circumstances. An employer 'who' cannot pay the minimum wage has no
right to engage labour and no justification to run the industry.
D
A living wage has been promised to the workers under the constitu-
tion. A 'socialist' framework to enable the working people a decent stand-
ard of life, has further been promised by the 42nd Amendment. The work-
ers are hopefully looking forward to achieve the said ideal. The promises
are pilling-up but the day of fulfilment is nowhere in sight. Industrial E
wage--looking as a whole-has not yet risen higher than the level of
minimum wage.

Adverting to the first point raised by Mr. Ramamurthy it would be
convenient to quote--from the award-the contentions of the Company
and the findings reached by the Tribunal. The Company's case as noticed F
by the tribunal is as under:-

"It is stated that the pre-war wage of a worker in the Madras
Region was Rs.26. It is evidenced by the decision of the La-
bour Appellate Tribunal reported in 1951 II L.L.J. page 314
(Buckingham and Carnatic Mills v. Their workers) and 1951 II G
L.L.J. page 718 (Good Pastor Press v. Their workers). It is
contended that taking the pre-war ininimum wage of worker at
Madras being Rs. 26 per-month equivalent to 100 per cent
neutralization the rate of Dearness Allowance at 26 paisa for
every point above 100 points of cost of living index would
work out to l 00 per cent neutralisation. On the above basis at H
138 SUPREME COURT REPORTS [1991) SUPP. 2 S.C.R.

A 2780.points of cost of living index in December 1984, the 100
per cent neutralised wage should be Rs. 722.80 (basic wage of
Rs. 26 plus dearness allowance Of Rs. 696.80). As against the
above wage a workman of lower grade in the Petitioner-Com-
pany in December 1984 was getting a total wage ofRs. 1,394/-
comprising of basic plus dearness allowance plus house rent
B allowance and the rate of neutralisation of dearness allowance
correspondingly works out to 192 per cent."

The Tribunal accepted the above contentions of the Company. The
evidence produced by the Company, regarding prevailing DA schemes in
the comparable industries in the region, was also taken into consideration.
c The Tribunal finally decided as under:

"Taking an overall view of the rate of dearness allowance paid
by these comparable concerns in the region and the higher
total emoluments received by the workmen in this establish-
ment, the slab system of dearness allowance now in existence
D shall stand abolished and in future, dearness allowance in the
Petitioner-Management would be linked only to the cost of
living index at 33 paise per point over 100 points of the Ma-
dras City Cost of Living Index 1936 base and it shall be effec-
tive from the month in which the award is published in the
Tamil Nadu Gazette."
E
The learned Single Judge of the High Court upheld the above find-
ings of the Tribunal. The Division Bench of the High Court, in writ
appeal, approved the award and the judgment of the learned Single Judge
in the following words-
F "The learned j"!J(fge has observt:d that the counsel for the Man-
agement had taken him !hrough all the relevant materials which
were filed in the form ofExhibitsbefore the Tribunal in order
to show that the matter of over neutralisation cannot be in
dispute. Thus the learneti Judge proceeded on the basis that
there is over neutralisation which called for devising a scheme
G
for,reSt.ructuring lh~,:wage scale. This finding cannot be inter-
.fer~q With as no irtaterials have been placed before us by the
learned counsel for the _appellant to show that the exhibits
which were perused by the learned Judge do not support his
,conclusion. Hence, we hold that the contention that there are
'H no compelling circumstances in this case to revise the pattern
of dearness allowance is unsustainable."
WORK.MEN v. MANAGEMENT OF REPTAKOS BRETT. [KULDIP-SINGH, J,) 139

According to the Company the only purpose of DA is to enable a A
worker-,-in the event of a rise in cost of living----tO purchase the same
amount bf goods of basic necessity as before. In other words the DA iS--to-
neutralise the rise in prices. the said purpose can be achieved by providing
maximum of 100 per cent neutralisation. Accepting the calculations of the
Company based on Rs. 26 being the pre-war (1936) minimum wage in
Madras region the Tribunal came to the finding that there was 192 per B
cent neutralisation.

The Tribunal accepted Rs. 26 as the pre-war minimum wage in
Madras region on the basis of the decisions of Labour Appellate Tribunal
oflndia in Buckingham and Carnatic Mills Ltd. v. Their workers, [1951] 2
L.L.J. 314 and Good Pastor Press v. Their workers, [1951] 2 L.L.J. 718. C
In Buckingham case the appellate tribunal came to the conclusion
that the basic wage of the lowest category of operatives on the living cost
of index of the year 1936 was Rs. 28. The said wage included Rs.16~ as
expenses on diet. The workers relied upon the. Textile Enquiry Commit-
tee's report to claim 25% addition to the diet-expenses. The Appellate D
Tribunal rejected the report on the ground that the recommendations in
the said report were for the purpose of attaining the standard of "living
wage" and not of 'minimum wage'. The Appellate Tribunal stated as
under:~

-"The Union however, contends that Dr. Akroyd revi.sed his E
opinion when submitting a specially prepared note to assist the
Textile Enquiry Committee, Bombay ofwbich Mr. Justice Divatia
was the Chairman, where he is said to have stated that 25 per
cent more will have to be added for obtaining a balanced diet
for a minimum wage earner. The report of that Enquiry Com-
mittee, which was published in 1940, however, shows that Dr. F
Akroyd added 25 per cent as the costs of the extra items to his
standard menu such as sugar etc., for the purpose of attaining
the standard menu of 'living wages' (final report of the Textile
Labour Enquiry Committee 1940, Vol.II, pages 70 to 71). There-
fore, for the purpose of fixing 'minimum wages' that 25 per
cent is not to be added." G
The question as to whether the recommendations Of Textile Enquiry
Committee were in relation to 'living wage' or 'minimum wage' came for
C'?nsideration before this Court in Standard Vacuum case (supra). This
Court held as under:
"It is obvious that the Commitfee was really thinking-of what H
140 SUPREME COURT REPORTS (1991) SUPP. 2 S.C.R.

A is today described as the minimum need-based wage, and it
found that judged by the gaid standard the current wages were
deficient. In its report the Committee has used the word 'mini-
mum' in regard to some of the constituents of the concept of
living wage, and its calculations show that it did not proceed
beyond the minimum level in respect of any of tlie said con-
B stituents. Therefore, though the expression 'living wage stand-
ard' has been used by the Committee in its report we are
satisfied that Rs. SO to Rs. SS cannot be regarded as anything
higher than the need based minimum wage at that time. If that
be the true position the whole basis adopted by the appellant in
making its calculations turns out to be illusory."
c
This Court, therefore, in Standard Vacuum case came to the conclu-
sion that the Textile Labour Committee Report in the year 1940 in its
calculations did not proceed beyond the minimum level of the wage struc-
ture. It was further held that Rs. 50 to Rs. SS was the need-based mini-
mum wage in the year 1940.
D
The Appellate Tribunal in Buckingham case, therefore misread the
Textile Committee Report and was not justified in rejecting the same on
the ground that it related to the category of 'living wage'

We are of the view that it would not be safe to accept the findings of
E the Appellate Tribunal in Buckingham case as the basis for fixing the
wage structure to the prejudice of the workmen. This court in Standard
Vacuum case (supra) has further· held that in Bombay the minimum wage
in the year 1940 was Rs.SO to Rs.SS. On that finding it is not possible to
accept that the minimum wage in the year 1936 in Madras region was
Rs.26/28. So far as the Good Pastor Press case is concerned the question
F of determining the minimum wage in pre-war 1936 was not before the
Appellate Tribunal. It only mentioned the fact that Rs.26 was held to be
so by some of the subordinate tribunals. There was no discussion at all on
this point. The Tribunal's relian~ on this case was wholly misplaced.

In any case we are of the opinion that purchasing power of today's
G wage cannot be judged by making calculations which are solely based on
30/40 years old wage structure. The only reasonable way to determine the
category of wage structure is to evaluate each component of the category
concerned in the light of the prevailing prices. Tuer~ has been sky-rocking
rise in the prices and the inflation chart is going up so fast that the only
way to do justice to the labour is to determine the money value of various
H components of the minimum wage.in the context of today.
WORKMEN v. MANAGEMENT OF REPTAKOS BRETT. [KULDIP SINGH, J,) 141

We may now move on to the second and third point raised by Mr. A
Ramamurthy. We take up these points together. Mr. F.S. Nariman, learned
counsel appearing for the Company, contended that the existing DA scheme
can be revised even to the prejudice of the workmen and for that proposi-
tion he relied upon the judgment of this Court in Mis. Crown Aluminium
works v. Their Workmen, (1958) S.C.R. 651. Mr. Ramamurthy has, how-
ever, argued that even if the contention of Mr. Nariman is accepted in B
principle, the Company has not been able to make-out a case for such a
revision. In Mis. Crown Aluminium Works case this Court speaking through
Gajendragadkar, J.(as he then was~ held as under:-

"The ·question posed before us by Mr. Sen is: Can the wage
structure fixed in a given industry be never revised to the c
prejudice of its workmen? Considered as a general question in
the abstract it must be answered in favour of Mr. Sen. We do
not think it would be correct to say that in no conceivable
circumstances can the wage structure be revised to the preju-
dice of workmen. When we make this observation, we must
add that even theoretically no wage structure can or should be D
revised to the prejudice of workmen ifthe structure in question
falls in the category of the bare subsistence or the minimum
wage. If the wage structure in question falls in a higher cat-
egory, 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 E
of the tribunal. In dealing with a claim for such revision, the
tribunal may have to consider, as in the prese~t case whether
the employer's financial difficulties could not be adequately
met by retrechment in personnel already effected by the em-
ployer and sanctioned by the tribunal. The tribunal may also
enquire whether the financial difficulties facing the employer F
are likely to be of a short duration or are going to face the
employer for a fairly long time. !tis not necessary, and would
indeed be very difficult, to state exhaustively all considera-
tions which may be relevant in a given case. It would, how-
ever, be enough to observe that, after considering all the rel-
evant facts, if the tribunal is satisfied that a case for reduction G
in the wage structure has been established then it would be
open to the tribunal to accede to the request of the employer to
make appropriate reduction in the wage structure, subject to
such conditions as to time or otherwise that the tribunal may
deem fit or expedient to impose."
H
142 SUPREME COURT REPORTS [1991] SUPP. 2 S.C.R.

A The above dicta was reiterated by this Court in Ahmedabad Mills
Owners, Association etc. v. The Textiles Labour Association, [1961) 1
SCR 382 wherein this Court through Gajendragadkar, CJ, laid down as
under:-

"The other aspect of the matter which cannot be ignored is that
B if a fair wage structure is constructed by industrial adjudica-
tion and in course of time, experience shows that the employer
cannot bear the burden of such wage structure, industrial adju-
dication Ca.n, and in a proper case should revise the wage
structure, though such revision may result in the reduction of
the wages paid to the employees ................... .if it appears that
c the employer cannot really bear the burden of the increasing
wages bill industrial adjudication, on principle, cannot refuse
to examine the employer's case and should not hesitate to give
him relief if it is satisfied that if such relief is not given, the
employer may have to close down his business ................ This
principle, however, does not apply to cases where the wages
D paid to the employees are no better than the basic minimum
wage. If, what the employer pays to his employees is just the
basic subsistence wage, then it would not be open to the em-
ployer to contend that even such a wage is beyond his paying
capac~ty."

E The ratio which emerges from the judgments of this Court is that the
management can revise the wage structure to the prejudice of the work-
men in a case where due to financial stringency it is unable to bear the
burden of the existing-wage. But in an industry or 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. It is, there-
F fore, for the management, which is seeking restructuring of DA scheme to
the disadvantage of the workmen to prove to the satisfaction of the tribu-
nal that the wage-structure in the industry concerned is well above mini-
mum level and the management is financially not in a position to bear the
burden of the existing wage structure.

G Mr. Ramamurthy further relied upon this Court's judgment in Mohthl)i-
. Rated workmen at the Wada/a factory of the Indian Hume Pipe Co. Ltd. v.
Indian Hume Pipe Co. Ltd., Bombay, [1986) 2 S.C.R. 484 and contended
that an employer cannot be permitted to abolish the DA scheme which has
worked smoothly for almost thirty years on the plea that the said Sfheme
is more beneficial than the DA schemes adopted by other indusJries{in the
H region. In the Indian Hume Pipe Co. Ltd case the management ple~ed
WORKMEN v. MANAGEMENT OF REPTAKOS BRETT. [KULDIP SINGH, J,) 143

that the dearness allowance enjoyed by the workmen was so high in A
certain cases that neutralisation was at rates much higher than 100%. It
was further contended that the management did not have the capacity to
pay the slab system of DA and in the event of a claim for similar DA by
other workmen the management might have to .close down the factories.
Khailid, J. spoke for the court as under:-
B
"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 made for
raising the dearness allowance paid to them. Here, we have the
~ of the employer trying to get over a system of dearness C
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 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 D
records 'procduced show that despite this system of dearness
allowance the Company has been making profits and has been
improving its position year by year............. 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 work- E
men instead of a subsisting wage. It is indeed a ·matter of
concern and mortification that even today the aspirations of a
living wage for workmen remain a mirag~ and a distant ·
dream. Nothing short of a living wage can be a fair wage. It
should be the combined effort of all concerned including the
Courts to extend to workmen a helping hand so that they get a F
living wage which would keep them to some extent at least
free from want. lt is against 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 back-
ground that we have considered the award review. We are not
satisfied that a case has been made out on the facts available G
for a change ...................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. Tribu-
nals and Courts can take judicial notice of one fact; and that is
that the wages of workmen, except inexceptionally rare cases, H
144 SUPREME COURT REPORTS (1991) SUPP. 2 S.C.R.

A fall within the category of mere "subsisting wages". That be-
ing so, it would be inadvisable to tinker with the wage struc-
ture of workmen except under compelling circumstances."

We agree with Mr. Ramamurthy that the DA scheme-which had
stood the ·test of time for almost thirty years and had been approved by
B various settlements between the parties-has been unjustifiably abolished
by the Courts below and as such the award of the Tribunal and the High
Court Judgments are unsustainable.

Mr. Nariman has also relied on the judgment of this Court in Killick
Nixon Ltd. v. Killick & Allied Companies Employees Union, [1975] Suppl.
c S.C.R. 453 to support the findings of the Tribunal and the High Court.
The said case d()t)S not lay down that in all cases the slab system of DA
should be abolished to the prejudice of the workers. In the said case this
Court on the facts of the case came to the conclusion that the employer
had made out a case for putting a ceiling on the dearness allowance. The
ratio of that case cannot be extended to interfere with the existing DA
D schemes in every case where such schemes are beneficial to the wofkmen.

Mr. Nariman has invited our attention to para 20 of the Award
wherein the tribunal has held as under:

"These figures as detailed in Ex.M-13 would establish that the
company is not in a financial position to bear the additional
E burden on account of increased wages."

From the above finding it was sought to be shown that the Company
has proved to the satisfaction of the Tribunal that financially it was not in
a position to bear the burden of the existing DA scheme. We do not agree
with the learned counsel. The Tribunal gave the above finding in the
F reference made on behalf of the workmen asking for bonus increase and
various other monetary benefits. While rejecting the demands of the work-
men the Tribunal gave the above finding which related to the additional
burden accruing in the event of acceptance of the workers' demands. The
Tribunal nowhere considered the financial position of the company vis-a-
vis the existing DA scheme. The Company neither pleaded nor argued
G before the Tribunal that its financial position had so much deteriorated
that it was not possible for it to bear the burden of the slab system of DA.
The Tribunal has not dealt with this aspect of the matter while considering
the demand of the Company for re-structuring the DA scheme.

It has been pleaded by the company that its workmen are in a high
H wage island and as such the revision of DA scheme was jutified. The
.WORKMEN v. MANAGEMENT OF REPTAKOS BRETT. [KULDIP SINGH, J,] 145

Company also produced evidence before the Tribunal to show that compa- A
rable concerns in the region were paying lesser DA to its workmen. On
the basis of the material produced before the Tribunal all that the Com-
pany has been able to show is that the DA paid by the Company is
somewhat higher than what is being paid by the other similar industries in
the region. There is, however, no material on the record to show that what
is being paid by the company is higher than what would be required by B
the concept of need based minimum wage. In any case there is a very long
way between the need based wage and the living wage.

Mr. Nariman reminded us of the limits on our jurisdiction under
Article 136 of the Constitution of India and relying upon Shaw Wallace &
Co. Ltd. v. Workmen, [1978] 2 SCC 45 and The Statesman Ltd. v. Work- C
men, [1976] 3 SCR 228 contended that so long as there is "some ba3is,
some material to validate the award" the "jurisdiction under Article 136
stands repelled". The Tribunal and the High Court, in this case, has acted
in total oblivion of the legal position as propounded by this court in
various judgments referred to by us. Manifest injustice has been caused to
the workmen by the award under appeal. We see no force in the conten- D
tion of the learned counsel.

In view of the above discussion we are of the view that the Tribunal
was not justified in abolishing the slab system of DA which was operating
in the Company for almost thirty years. We allow the appeal and set asid~
the award of the Tribunal and the judgment of the learned Single Judge in E
the writ petition and of the Division Bench in the Writ Appeal. The
reference of the Company on the issue of re-structuring of the dearness
allowance is declined and rejected. The Appellant-workmen shall be enti-
tled to their costs throughout which we assess at Rs. 25,000.

R.P . Appeal allowed.

...