Case Note & Summary
The Supreme Court examined three appeals arising from awards of the Industrial Tribunal, Gujarat concerning the demand for transport allowance by workmen employed in two chemical manufacturing companies, Atic Industries Ltd. and Atul Products Ltd., both located in village Atul. The disputes arose when the workmen raised multiple demands including revision of wage scales, dearness allowance, shift allowance, housing facilities, and transport allowance. As the parties could not settle, the Deputy Commissioner of Labour, Ahmedabad, exercising powers delegated under Section 39 of the Industrial Disputes Act, 1947, referred the disputes for adjudication. For Atic Industries Ltd., Reference (IT) No. 65 of 1966 was made on 19 February 1966; for Atul Products Ltd., Reference (IT) No. 60 of 1966 was made on 30 June 1966. The Tribunal disposed of the demands in two parts for each reference. In respect of transport allowance, the Tribunal rejected the demand for free transport or a fixed monthly allowance but directed both companies to pay 15 paise per day to every employee who stayed at a distance of five miles or more from village Atul. For Atic Industries, payment was effective from 1 January 1968; for Atul Products, from 1 December 1967. The allowance was not payable on days when the workman was on earned leave or any type of leave, authorised or otherwise. Atic Industries Ltd. and Atul Products Ltd. appealed by special leave against the grant of allowance, while the workmen of Atic Industries Ltd. appealed seeking enhancement. The Supreme Court restricted the workmen's appeal to the question of transport allowance. The workmen's claim was based on the fact that the majority of employees came from distances of five to ten miles, the factories were not located where labour was easily available, and State Transport bus service was irregular and inadequate. Each workman incurred 80 paise per day in bus fare from Bulsar to Atul and back, which was excessive relative to wages. The union relied on an earlier award concerning Cynamid India Ltd., a pharmaceutical company in the same region, which was already paying 15 paise per day to workmen staying five miles or more away. The companies opposed the claim, arguing that providing transport was not an employer's duty, that good road and bus/train services existed, and that workmen accepted employment knowing they had to bear travel expenses. The Supreme Court held that an Industrial Tribunal has jurisdiction to make proper and reasonable orders in industrial disputes and can impose new obligations on employers in the interest of social justice, even involving the parties in a new contract. The Court applied the principle of region-cum-industry, noting that comparable concerns in the same region should have uniform conditions of service to avoid imbalances and migration of labour. The Tribunal was justified in considering the practice of Cynamid India Ltd. The Court also found that while fixing wage scales and dearness allowance, the Tribunal had not provided complete neutralisation and had proceeded on the basis that workmen must bear part of transport expenses. No material was placed to show that transport expenses were included in the cost of living index. The award of 15 paise per day, subject to conditions regarding distance and leave, was neither unreasonable nor arbitrary; the Tribunal had considered the financial capacity of the companies and there was no flaw in its reasoning. Accordingly, the Supreme Court dismissed the appeals of the companies and the workmen, confirming the Tribunal's award of 15 paise per day transport allowance.
Headnote
A) Industrial Law - Industrial Tribunal Jurisdiction - Power to Impose New Obligations in Interest of Social Justice - Industrial Disputes Act, 1947, Section 39 - The Tribunal considered a demand for transport allowance by workmen manufacturing chemicals in a village; companies argued employer had no duty to provide transport. Held that Industrial Tribunal has jurisdiction to make a proper and reasonable order in an industrial dispute and can impose new obligations on employer in interest of social justice, involving parties in a new contract; the award of 15 paise per day transport allowance was within jurisdiction. (Paras 779-780) B) Industrial Law - Wage Determination - Region-Cum-Industry Principle - Industrial Disputes Act, 1947 - The Tribunal looked at a pharmaceutical company in same region already paying transport allowance at 15 paise per day. Held that Tribunal was justified in having regard to practice obtaining in region on principle of region-cum-industry; foundation is uniformity of conditions of service in comparable concerns to avoid imbalance and migration of labour to establishments with more favourable conditions. (Paras 780-781) C) Industrial Law - Dearness Allowance and Transport Expenses - Cost of Living Index and Partial Neutralisation - Industrial Disputes Act, 1947 - Companies contended transport expense may be included in cost of living index; no material placed before Court to show transport expense included in preparation of cost of living index. Held that Tribunal had fixed wage scales and dearness allowance without complete neutralisation, and had proceeded on basis that workmen must bear part of transport expenses; relief given only because expense was high, not arbitrary. (Paras 781-782) D) Industrial Law - Reasonableness of Transport Allowance Award - Financial Capacity and Conditions - Industrial Disputes Act, 1947 - Award of 15 paise per day to employees residing five miles or more from village Atul, not payable on leave days, employer to be satisfied of distance. Held that award was not unreasonable or arbitrary; Tribunal had taken into account financial capacity of appellants and there was no flaw in reasoning; appeals dismissed. (Paras 782-783)
Issue of Consideration
Whether Industrial Tribunal has jurisdiction to award transport allowance to workmen; whether region-cum-industry principle justifies considering practice of comparable concerns in same region; whether award of 15 paise per day transport allowance is reasonable and not arbitrary.
Final Decision
Supreme Court dismissed the appeals of Atic Industries Ltd., Atul Products Ltd., and the workmen, confirming the Industrial Tribunal's award directing payment of 15 paise per day transport allowance to employees residing five miles or more from village Atul, subject to conditions regarding leave and employer's satisfaction of residence distance.
Law Points
- Industrial Tribunal can impose new obligation on employer in interest of social justice and involve parties in new contract
- region-cum-industry principle ensures uniformity of conditions of service in comparable concerns
- transport allowance award must be reasonable and not arbitrary
- financial capacity and partial neutralisation of dearness allowance considered
