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Firestone Tyre and Rubber Company v/s Its Workmen and Another

    Civil Appeals Nos. 521 of 1959 and 46 of 1960
    Decided On, 20 January 1961
    At, Supreme Court of India

Judgment Text
Gajendragadkar, J.

These two appeals arise out of an industrial dispute between Firestone Tyre and Rubber Company (hereafter called the company) and its workmen. This dispute had reference to the claim for bonus made by the workmen against the company for the financial year ending 31 October, 1957. They alleged that all employees including temporary workmen and casual labour, discharged, dismissed, retired or retrenched during the said financial year or after should be entitled to this bonus, and according to them the available surplus was so large that the company should pay them nine months' basic wages as bonus. This dispute was referred for adjudication before the industrial tribunal by the Government of Bombay under S.12(4) of the Industrial Disputes Act XIIV of 1947. It appears that the company had voluntarily paid to the workmen two months' basic wages as bonus for the relevant year. The award passed by the tribunal has directed to pay five months' basic wages as bonus in all. In its appeal the company contends that the wages which it pays to its workmen have reached the standard of living wage and so there is no justification for the claim of bonus at all. On the other hand, in their appeal the workmen contended that the wages paid to them are far below the standard of the living wage and the available surplus in the hand of the company is so large that the whole of the claim for bonus made by them should have been awarded.

This appeals were heard by us along with Civil Appeals Nos. 416 of 1958 and 19 of 1959 - Standard Vacuum Refining Company of India, Ltd. v. Its workmen and vice versa [1961 - I L.L.J. 227] (reported supra) in which we have just pronounced our judgment. Indeed the learned Attorney-General, who appeared for the appellant in this case, also urged substantially the same arguments as in Civil Appeal No. 416 of 1958. We have held in Civil Appeal No. 416 of 1958 that even the average wages amounting to Rs. 370 and odd are much below the standard of a living wage. That being so, it must follow that the plea made by the company in the present appeal cannot be sustained. In the statement filed by the company before the tribunal it first contended that the average wage was of the order of Rs. 217 per month, but this included the amount of bonus for two months paid by the company and the said amount must obviously be excluded from working out the average of the wage-structure. It is conceded that if the amount of bonus is thus deducted, the average bill would be Rs. 200 per month. Therefore, for the reasons given by us in the Civil Appeal No. 416 of 1958 we must hold that the company has failed to establish its plea that it is paying a living wage to its workmen.Then, as regards the workmen's appeal, it has been strenuously contended before us by Mr. Dudhia that the tribunal was not justified in awarding such a low bonus as five months' basic wages. In support of this contention Mr. Dudhia has naturally relied on the past history of the payment of bonus between the parties. Looking at the said history covered by the period between 1948-49 to 1956-57 it appears that the minimum bonus paid was four months' basic wages in 1948-49 when the profits were Rs. 122 lakhs, whereas the maximum bonus paid was six months' basic wages in 1955-56, the figures of profits not being disclosed on the record. During the rest of the period the profits have no doubt fluctuated but they have never gone below Rs. 121 lakhs and have reached the peak of Rs. 213 lakhs in one year. It has been found by the tribunal that the profits for the relevant year are higher than 1955-56 when six months' basic wages were awarded as bonus. Prima facie the workmen are, therefore, justified in contending that at least six months' bonus should have been paid to them; and that has been the principal argument urged before us both by Mr. Dudhia and by Mr. Gokhale.

In the case of the Standard Vacuum Refining Company [Civil Appeal No. 416 of 1958 : 1961 - I L.L.J. 227] (reported supra) we have considered this question at some length, and we have pointed out that unless the discretion vesting in the tribunal is shown to have been improperly or unreasonably exercised we would not be justified in interfering with its award. Let us, therefore, set out the reasons given by the tribunal in support of its conclusion. The tribunal has observed that the company has always paid bonus at the same rate in terms of monthly wages to operatives, clerks, supervisory staffs and even some of the officers. Then the tribunal proceeded to examine the economic effects of the awards of bonus on the community; and it has noticed the repercussions of the award of six months' wages as bonus to the company's employees on other industries in the region. It is observed that after six months' basic wages were awarded to the workmen similar claims began to be made by other employees, and that is a factor which the tribunal thought had to be taken into account. The tribunal then addressed itself to the argument of the company that productivity had decreased, and held that the said contention was not justified. It, however, noticed that the figures of absenteeism in the company were undoubtedly high though it was not inclined to draw any substantial inference from the said fact without a scientific investigation into the circumstances and clauses of absenteeism. It then examined the argument of the workmen that fabulous salaries are paid by the company to its directors and its higher officers. It also noticed the argument of the company that no dividend had been declared for the relevant year. Having thus considered all the relevant factors including the wage-structure prevailing in the company, the tribunal observed :"giving careful consideration to the contention of both side, and having regard to all the facts in the case, I have come to the conclusion that bonus equal to five-twelfths of the basic wages to the workmen would be quite adequate. As observed above, a higher bonus than this is certainly not indicated."

On the other hand, it held that a lower bonus was clearly ruled out. It is possible that if we were dealing with the question of the quantum of bonus ourselves for the first time, we may have been inclined to uphold the workmen's' c

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laim for six months' basic wages for the relevant year; but, as we have repeatedly pointed out, we would not be justified in interfering with awards of this kind merely because we might have awarded a little more or a little less. Our interference would be justified only if we are satisfied that the award suffers from a serious infirmity, and that the tribunal has failed to consider the necessary relevant facts. We have carefully considered the contentions raised before us by the workmen, but on the whole we are not inclined to interfere with the award made by the tribunal in the present case. In the result both the appeals fail and are dismissed. There will be no order as to costs.