Pfizer (P) Ltd. Bombay vs The Workmen
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Civil Appeals Nos. 625 and 626 of 1962
Decision Date: 30 November 1962
Coram: P.B. Gajendragadkar, Bhuvneshwar P. Sinha, K.N. Wanchoo, K.C. Das Gupta, J.C. Shah
In this case the Supreme Court of India delivered its judgment on 30 November 1962 in the matter of Pfizer (P) Ltd., Bombay versus the workmen. The judgment was authored by Justice P. B. Gajendragadkar and the bench was composed of Justice P. B. Gajendragadkar, Justice Bhuvneshwar P. Sinha, Justice K. N. Wanchoo, Justice K. C. Das Gupta and Justice J. C. Shah. The citation of the decision is recorded as 1963 AIR 1103 and 1963 SCR Supplement II 627, with later citations in the Supreme Court reports of 1964 SC 914 and 1975 SC 534. The dispute concerned the application of the Industrial Disputes Act of 1947, particularly sections dealing with the introduction of a three‑shift system, the number of paid holidays in a year, the reduction of such holidays, and the effect of a national emergency on industrial adjudication.
The appellant, Pfizer (P) Ltd., operates a manufacturing facility that produces life‑saving drugs, including antibiotics, anti‑tubercular medicines and vitamin products. The factory was previously operating a multiplicity of shifts with varying timing, but the machinery installed in the plant was not being fully utilized, resulting in inadequate production and an inability to meet market demand. To address this shortfall, the appellant resolved to introduce a three‑shift system so that production could be increased and the quality of the output could be improved. The preparation of a specific drug known as P A S required continuous operation of certain sections for twenty hours, making a three‑shift arrangement essential for that continuous process. The appellant also argued that if the chemical and pharmaceutical departments were to work in three shifts, the subsidiary sections such as packing, filling, washing, tablet and capsule preparation would also need to adopt the same schedule to keep pace with the increased output.
The appellant gave notice to the respondents that it intended to implement the three‑shift system. Conciliation efforts between the parties failed, and the dispute was referred to the Industrial Tribunal for adjudication. The Tribunal rendered an award against the appellant with respect to the proposed three‑shift system. The Tribunal held that introducing three shifts would be inconvenient for the majority of employees, would abolish the five‑day work week, would compel workers to labour at night, and would not necessarily improve product quality. Moreover, the Tribunal concluded that the production of the drug P A S did not require continuous operation in three shifts. While rejecting the three‑shift proposal, the Tribunal reduced the number of paid holidays from twenty‑seven days to ten days in a year.
Both parties filed cross‑appeals before this Court. The appellant appealed the Tribunal’s order rejecting its demand to introduce three shifts, and the workmen appealed the order that reduced their holidays. After considering the arguments and the factual circumstances, the Court held that the appellant should be permitted to introduce the three‑shift system in the factory. The Court observed that the manufacturing process for the drug P A S is a continuous operation lasting twenty hours, making three shifts inevitable to ensure uninterrupted production, improve quality and avoid rejection of a large proportion of the product. Accordingly, the Court allowed the introduction of three shifts, recognizing the necessity of continuous work for the specific drug and the broader requirement for increased production capacity.
In this case, the Court observed that a large proportion of the product was manufactured in a particular section and that, in order to handle that volume, the introduction of three shifts in that section was necessary. The Court further held that the adoption of three shifts would lead to improvement in both the quality and the quantity of the output. The Court also allowed three shifts for the pharmaceutical section of the department that produced ointments, injections and other pharmaceutical preparations. Because the department responsible for packing, filling, washing, tablet and capsule production had to operate in synchrony with the two other departments, the Court authorized three shifts for that department as well. The respondents objected that three‑shift work would require night work and therefore was undesirable; the Court rejected that objection. The respondents also objected that the commencement of work at 7 a.m. under the three‑shift system was an unduly early hour; the Court likewise rejected that objection, noting that the 7 a.m. start time had been selected to correspond with the availability of local transport facilities. The Court then rejected the appellant’s contention that, because the standing orders already permitted more than one shift, management possessed an unfettered discretion to introduce three shifts without any scrutiny by an industrial adjudicating authority. The Court also rejected the workmen’s argument that the introduction of three shifts would represent a departure from the prevailing pattern in the pharmaceutical industry and therefore could not be permitted. The Court emphasized that the question had to be examined in light of the facts presented before it, and that the importance and necessity of increased production must be kept in mind. While allowing the introduction of three shifts, the Court was mindful of the existence of an emergency affecting the nation. As the whole economy was being placed on a war footing, industrial production had to be expanded to meet the nation’s requirements. Accordingly, the Court stated that capital, labour and industrial adjudication must be sensitive and responsive to the paramount needs of the community confronted with grave danger, and that all legitimate efforts by the employer to increase production and move goods required by the community must receive the cooperation of the employees on reasonable terms.
On 22 January 1962 the employer asked to change the conditions of employment that governed the work of its employees. The first change that the employer sought was a reduction in the number of paid holidays. At that time the employees were entitled to twenty‑seven paid holidays, and the employer had also been granting public holidays as defined in the Negotiable Instruments Act. The employer proposed to cut the paid holidays to eight days per year. This proposal formed the first point of dispute between the parties.
The second point of dispute related to the fixing of the hours of work. The employer intended to introduce three daily shifts in most of its departments and therefore issued a notice of change pursuant to section 9A of the Industrial Disputes Act. Both of the employer’s proposals were opposed by the employees. The Industrial Tribunal rejected the employer’s request to introduce three shifts in the factory. The employer challenged that part of the award by filing appeal No 625 of 1962. Regarding the request to reduce paid holidays, the Tribunal largely accepted the employer’s case. It ordered that the holidays be reduced to ten days each year, directed the employer to determine those holidays after consulting the employees, and required the employer to grant the employees an additional grade increment effective 1 August 1962. That increment was to be over and above any normal increment that might become payable after that date. The employees contested the reduction of holidays by filing appeal No 626 of 1962. Both appeals were brought before this Court by way of special leave.
The employer was a company incorporated under the Indian Companies Act of 1913, with its registered office in Bombay. It operated a manufacturing plant that produced life‑saving drugs, including antibiotics, anti‑tubercular agents, and vitamin preparations. Although the plant already ran several shifts at different times, the management found that the existing arrangement did not make full use of the installed machinery. In addition, the raw material supplied to the Bombay plant from the employer’s Chandigarh factory was not being utilized satisfactorily, leading to inadequate overall production and an inability to meet market demand. Consequently, the management concluded that introducing three shifts was necessary to achieve extensive production of higher‑quality products. The company believed that a larger scale of production would enable it to export the drugs, and that greater output would allow it to compete more effectively in the market. In support of this view, the employer pointed to the need for continuous operation of certain sections, such as the production of the anti‑tubercular drug Para‑Amino‑Salicylic Acid, which required a three‑shift schedule to improve product quality and ensure uninterrupted processing.
The Court recorded that the appellant had developed the well‑known anti‑tubercular drug called Para Amino Salicylic Acid (P.A.S.) in its research laboratory after carrying out laboratory and pilot‑plant experiments during 1960‑61. The appellant asserted that manufacturing this drug required the relevant production section to operate on a three‑shift basis because the process was continuous. According to the appellant’s expert, continuous operation of the section would markedly improve the quality of the product, and this technical assessment formed an additional reason for the appellant’s desire to introduce three shifts throughout its factory. The appellant further explained that if the chemical and pharmaceutical departments were placed on a three‑shift system, the subsidiary sections would also have to work in three shifts in order to keep pace with the increased production demands. On that basis, the appellant gave notice of the proposed change to the workmen, and after attempts at conciliation failed, it applied to the Maharashtra Government to refer the dispute to the Industrial Tribunal for adjudication.
The respondents opposed the proposal vigorously. They argued that for many years the workmen had enjoyed a five‑day work week, which had become a term of their employment, and that moving to three shifts would inevitably convert the five‑day week into a six‑day week, a regressive step that would be highly prejudicial to the employees’ interests. The respondents were willing to accept the requirement of working on two Saturdays each month, provided that they received proper overtime wages for such work, but they disputed the appellant’s contention that a drastic change to three shifts was justified. They further contended that the introduction of three shifts would increase the workload of the employees and that the appellant’s proposal represented a complete departure from the prevailing pattern in the pharmaceutical industry in the region. The respondents also challenged the appellant’s claim that the production of P.A.S. was a continuous process. Nevertheless, they expressed willingness to agree that all manufacturing departments could be run on a two‑shift basis, thereby avoiding the need for a third shift, if appropriate adjustments in timing were made.
The Tribunal examined both documentary and oral evidence presented by the parties to support their respective positions. After evaluating the material, the Tribunal concluded that the appellant had not succeeded in establishing a compelling case for the introduction of three shifts. The Tribunal found that the documentary evidence indicated that pharmaceutical factories in Greater Bombay generally operated one shift, and in some instances two shifts, while only a limited number of factories employed three shifts, and those were confined to sections that manufactured chemicals rather than pharmaceuticals. The Tribunal also noted that the evidence did not demonstrate that the production of P.A.S. required continuous operation in three shifts to achieve the desired quality standards. Consequently, the Tribunal held that the appellant’s justification for three‑shift operation was unsupported by the evidence before it. It agreed that the departments like Watch &
Ward and maintenance sections in some companies operated on a three‑shift basis, and the same pattern existed in the appellant’s factory as well. The Tribunal held that introducing a three‑shift system would be inconvenient for the majority of employees because it would require abandoning the five‑day work week. It further observed that, in principle, forcing employees to work at night would be detrimental to their interests and might not even improve the quality of the product. Concerning the appellant’s claim that the production of P A S involved a continuous process, the Tribunal noted that the evidence presented did not demonstrate that a three‑shift arrangement would be convenient for meeting product specifications without excessive rejections. The Tribunal was not persuaded that the manufacture of this drug required uninterrupted three‑shift operation and therefore rejected the appellant’s request for such a system. In denying this claim, the Tribunal also observed that it had already granted the appellant some relief by reducing the number of holidays, which meant there was little justification for increasing working hours. While the dispute was pending, the Tribunal permitted an interim arrangement allowing a third shift in the P A S department, authorising the rotation of up to two employees from other shifts to the night shift. The award stipulated that this interim arrangement should continue for one year after the award becomes enforceable, after which the issue could be reconsidered.
The Tribunal further ordered that the two workers who would rotate to the night shift receive a wage increment of ten percent over their basic wages, plus dearness allowance, for each day they worked in the third shift. Regarding holidays, the Tribunal found that the number of holidays granted by the appellant under the Negotiable Instruments Act was unreasonably high. After comparing the holiday entitlement with that of other concerns, the Tribunal concluded that ten days of holiday per year would be reasonable and just. Consequently, the appellant’s request for a reduction in holidays was allowed, whereas its request for the introduction of three shifts was denied. Before addressing the points raised by the parties in these appeals, the Court noted that it would be useful to set out the existing working arrangements in the appellant’s factory and the changes that would ensue if three shifts were permitted. The factory employed 821 workmen, of whom 235 were women.
Section 66(1)(b) of the Factories Act bars the employment of women in any factory except during the hours of six in the morning and seven in the evening. Consequently, the proposal to introduce three shifts creates a problem only with regard to the rotation of male workmen, and this circumstance must be kept in mind while adjudicating the present dispute. The appellant’s statement of facts (Exhibit C‑1) sets out that its factory comprises four distinct departments. The first department operates on a six‑day week and follows a three‑shift system covering the areas of P.A.S. Watch and Ward, Maintenance and Hydrazine. Each of the three shifts lasts eight hours and includes a half‑hour lunch break together with two ten‑minute tea breaks, which are common to all departments. The actual working time in this department amounts to seven hours and ten minutes per day, giving a total of forty‑three hours per week, and the department employs one hundred and twenty‑five workers. Within this department the P.A.S. section runs three shifts: 07:00‑15:00 with ten workers, 15:00‑23:00 with eight workers, and 23:00‑07:00 with two workers. The second department works five days a week on a single‑shift basis, with an actual working time of eight hours and fifteen minutes per day, equalling forty‑two and a half hours per week. This department is engaged in the production of ointment, mixing injection, orals, INA, INAH, Protinex and Protin Hydrolisate, and it employs seventy‑five persons, of whom eighteen are female and fifty‑seven are male. The third department also works five days a week but on a two‑shift basis, handling packing, filling, washing, tablets and capsules. Its actual working time is eight hours and fifteen minutes per day, also amounting to forty‑two and a half hours per week. The two shifts run from 08:00‑17:15 and from 21:45‑07:00. This department employs three hundred and thirty‑nine workers in the day shift, comprising one hundred and thirty‑four males and two hundred and five females, while the night shift employs one hundred and seventeen males. The fourth department works five days a week on a single‑shift basis and consists of research and development, quality control, factory office, stores and dispatch godown. Its actual working time is eight hours and fifteen minutes per day, giving forty‑two and five‑hundredths hours per week, and it employs one hundred and sixty‑five workers, fourteen of whom are female and one hundred and fifty‑one are male.
The introduction of three shifts as proposed by the appellant would bring about substantial alterations in the working arrangements of the second and third departments, which together will be referred to as Groups II and III. By contrast, there would be no change in the shift hours or the distribution of work in the first department. It is possible that the number of employees in the first department may increase as a result of the overall restructuring.
After the three‑shift system is introduced, the second and third departments will be merged for the purpose of rotating male workmen into the night shift. The proposed shift timings for the combined departments are from seven twenty in the morning to three twenty in the afternoon, from three twenty in the afternoon to eleven twenty at night, and from eleven twenty at night to seven twenty the next morning. The existing lunch break and the two tea breaks will continue without alteration. The introduction of the three‑shift arrangement will increase the total working hours by one and one‑quarter hours, which translates into a net increase of fifty‑five minutes per week. The appellant expects that, once the three‑shift system is operative, employees who are presently on the first shift will be placed in the new first shift, while those who are currently on the night shift will be transferred to the second shift. The appellant also intends to raise the number of employees in the second shift, a increase that was not possible earlier because of rotation difficulties. In the night shift, approximately thirty to fifty employees will be engaged, and night‑shift work will be rotated among male employees more frequently, necessitating the employment of some additional workers which the appellant proposes to undertake. Regarding the fourth department, the current working hours of eight o’clock in the morning to five fifteen in the evening will be altered to a schedule from nine o’clock in the morning to five o’clock in the evening, six days a week. This change will also result in an increase of one and one‑quarter hours in the weekly working time, again amounting to a net increase of fifty‑five minutes per week. Consequently, the work week will shift from a five‑day schedule to a six‑day schedule, with the overall working hours rising by one and one‑quarter hours, the net weekly increase being fifty‑five minutes. In addressing the merits of the dispute in these appeals, the Court must recognise that the prevailing national emergency has fundamentally altered the nature of the problem. The entire economy is now being conducted on a war footing, and industrial production must be expanded to meet the nation’s urgent needs. It is clear that capital, labour and industrial adjudication must all be sensitive and responsive to the paramount requirement of the community, which currently faces a grave danger. Therefore, any legitimate efforts by the employer to increase production of goods required by the community must be met with the cooperation of the employees, of course on reasonable terms. Both the Attorney‑General and the respondent’s counsel acknowledged that, at the time this Court is considering the issues raised by the appeals, it is necessary to decide them in light of the peremptory and paramount requirement of the Nation at this critical hour.
In noting the circumstances, the Court observed that a Tribunal confronting the present dispute at this moment would have taken a completely different approach. The principal contention presented by counsel for the respondents, which had persuaded the Tribunal earlier, concerned the prevailing pattern of industrial employment within the pharmaceutical sector in the Bombay region. Accordingly, the Court set out that, under section 51 of the Factories Act, no adult worker may be required or permitted to work more than forty‑eight hours in any week, and that section 59 provides that a worker who labours more than nine hours in a day or exceeds forty‑eight hours in a week is entitled to overtime compensation as prescribed. Counsel for the respondents lodged a grievance that the introduction of three shifts by the appellant would effectively deprive the workers of the overtime wages they would otherwise claim if they were required to work on Saturdays under the existing arrangement. The Court, however, found that grievance to be inadequately supported because the record showed the appellant’s willingness to remunerate night work and to consider additional payment for a third shift. The respondents, on the other hand, opposed the three‑shift system on principle and therefore declined the proposal. The Attorney‑General further informed the Court that, should the appellant be permitted to institute three shifts, it was prepared to approach the Tribunal for a determination of the appropriate additional remuneration to be paid to employees as a result of the new schedule. Consequently, the Court concluded that the respondents’ claim of total loss of overtime entitlement was substantially weakened. The Court also noted that the present working schedule in the appellant’s factory comprised a maximum of forty‑three hours per week, ranging between forty‑two point zero five and forty‑three hours, and that under no circumstance could the weekly hours exceed forty‑eight. The plan proposed by the appellant would add only one and one‑quarter hours, amounting to an extra fifty‑five minutes per week. In assessing the pattern of employment across the pharmaceutical industry in the region, these facts could not be disregarded. The appellant had submitted document Ext. C‑10, indicating that three‑shift operations existed in fifteen pharmaceutical concerns. The respondents commented on that submission and challenged several assumptions made by the appellant. Counsel for the respondents then presented a typed statement detailing the actual situation in those fifteen factories, and it appeared that the majority of those factories operated three shifts.
The Court observed that the security and maintenance departments of many pharmaceutical factories already operate on a three‑shift basis. In particular, it noted that the security and maintenance staff at Sandoz India Ltd., Thana, work three shifts, as do the workers in the Dextrone Maltose section of Raptakos Brott & Co. Pvt. Ltd. The chemical manufacturing processes at Merck Sharp & Dohme of India Ltd. also run continuously under three shifts. Similarly, at Parke Davis India Ltd. the chemical product operators, together with boiler personnel, watchmen and electricians, perform their duties in three shifts. Several other establishments were cited: certain departments at Sarabhai Chemicals, Baroda, operate on three shifts; some departments at Alembic, Baroda, follow the same pattern; the same is true for selected departments at Hindusthan Antibiotic, Poona. Glaxo, Thana, and Lederlo, Bulsar, also run three‑shift systems in the relevant sections. While the Tribunal expressed reluctance to consider factories located outside Greater Bombay, the Court held that such a rigid stance was inappropriate when the broader issue was whether three‑shift operations could be introduced, at least in the chemical sections of the pharmaceutical industry. On the basis of the material placed before it, the Court concluded that chemical sections of pharmaceutical factories do indeed function on a three‑shift schedule, and that this fact bears directly on the appellant’s request concerning the P.A.S. section of its own plant. Moreover, the Court reiterated that any discussion of three‑shift work must take into account the pressing need for increased production that characterises the present circumstances.
The Court then turned to the question of whether the Tribunal was correct in holding that the production of P.A.S. does not involve a continuous process. For this purpose, the appellant relied on the testimony of Dr. Joshi, who holds an M.Sc. and a Ph.D. in Organic Chemistry from Bombay University. Dr. Joshi joined the appellant’s service as a Research Chemist in 1957 and has been in charge of the appellant’s Research Laboratory since 1956. In his affidavit, Dr. Joshi stated that commercial production of P.A.S. began in January 1962 and that, of the total January output of 2,770 kg, a volume of 1,795 kg (approximately 65 %) was rejected by the Quality Control Laboratory. The principal cause of the high rejection rate was an excessive content of meta‑amino phenol (M.A.P.). Because of this problem, Dr. Joshi was assigned to investigate the reasons for the poor quality of P.A.S. After conducting several test runs in the laboratory, he concluded that the M.A.P. content could be reduced to acceptable limits under the United States Pharmacopeia XVI specifications only if the operations following the purification stage were carried out continuously and as quickly as possible. Dr. Joshi confirmed his conclusion by applying his findings to the main production plant. He explained that the production of P.A.S. comprises eleven distinct operations, the sixth being the purification step. Following purification, the process proceeds to precipitation, which takes one hour, then to centrifuging and washing, during which the centrifuge must be operated for 6.30 hours. This is followed by wet milling, lasting 1.30 hours, then a vacuum‑drying stage that includes charging and discharging and requires nine hours, and finally dry milling and packing, which together take two hours. Dr. Joshi maintained that the six operations beginning with precipitation must be treated as a continuous sequence, because together they require twenty hours of uninterrupted attention, making the use of three shifts unavoidable.
In the process sequence, wet milling accounted for one hour and thirty minutes, followed by a vacuum‑drying operation that, including charging and discharging, required nine hours, and finally a dry‑milling and packing stage that lasted two hours. Dr. Joshi expressed the opinion that the six operations commencing with precipitation should be performed continuously, because the combined duration of these steps added up to twenty hours, making the introduction of three work shifts inevitable. During cross‑examination, Mr. Sule, appearing for the respondents, heavily relied on Dr. Joshi’s statement that if aqueous solutions of P.A.S. are kept below thirty degrees centigrade, deterioration will cease. The Court observed that this temperature‑related remark did not materially influence the principal argument advanced by Dr. Joshi, namely that continuous handling of the twenty‑hour sequence was essential for quality improvement. The respondents attempted to undermine Dr. Joshi’s testimony by calling Mr. Pillai, an employee of the P.A.S. department under Mr. Moeller, to the stand. However, the Court noted that Mr. Pillai was not a technical specialist and therefore his opinions could not outweigh the expert evidence supplied by Dr. Joshi. Moreover, when cross‑examined, Mr. Pillai effectively conceded that the six critical processes would require at least eighteen and a half hours, a duration that likewise justified the need for three shifts.
The Court further observed that Dr. Joshi’s assertions regarding the time required for each operation were corroborated by contemporaneous records maintained by the laboratory workers, records that Dr. Joshi produced and offered to Mr. Pillai, who subsequently refused to examine them. Consequently, the Court concluded that the Tribunal had erred in holding that Dr. Joshi’s evidence failed to establish the appellant’s case that the P.A.S. production process is continuous and that three shifts are necessary to enhance product quality and reduce rejection rates. The Tribunal’s reliance on Mr. Pillai’s statements, despite their partisan nature and lack of technical expertise, demonstrated a failure to appreciate the weight of the expert evidence. Accordingly, the Court held that there was no doubt that the appellant was entitled to commence three shifts in the P.A.S. section, thereby enabling larger and better‑quality output. The discussion then turned to whether other factory departments should also be permitted to operate on a three‑shift basis; the pharmaceutical section, currently running a single shift, was highlighted, and the testimony of the appellant’s Director, Mr. Treharne, was noted as presenting a strong case for extending three‑shift operations to that department as well.
In this matter, the Court examined the submission that the department in question could be operated on a three‑shift basis. The director of the appellant firm testified that the company possessed a factory at Chandigarh and that the overall output of that plant would be enhanced if the subsidiary department were also permitted to run three shifts. On the basis of that evidence, the Court indicated that it could not at the present stage reject the appellant’s request to introduce a three‑shift system. Nevertheless, the Court noted that additional factors required consideration before any final determination could be made. One such factor was raised by counsel for the respondents, who argued vigorously that the existing five‑day work week and the nighttime rest guaranteed to the employees under the present service conditions were highly valued benefits. He maintained that altering these conditions to a six‑day week and compelling some employees to work at night would represent a regressive step. The Court observed that industrial workers have a legitimate expectation of a five‑day week with work confined to daylight hours, and that a two‑day weekend provides ample opportunity for cultural and recreational activities, thereby improving morale and productivity during the remaining workdays. The Court further acknowledged that, in theory, night work may be less desirable, but such preferences could only be fully realized after the nation achieves a sufficiently advanced level of economic and industrial development. Accordingly, the Court cautioned against addressing the issue in a purely doctrinal manner detached from present realities. It held that when an employer wishes to increase production to meet societal needs and is prepared to compensate workers for the additional effort, the adjudicative forum should not discourage such initiatives but should instead encourage cooperative arrangements between capital and labour. Consequently, the academic arguments presented by counsel for the respondents were deemed insufficient to decide the appeals. The Court also referred to broader considerations concerning equipment obsolescence, national emergencies, and the belief that continuous utilization of plant, distributed among shifted workforces, could ease the social burden of labour. The Court noted that prevailing industrial customs regard daylight shifts as normal and night shifts as abnormal, that supervisory and intelligent labour tend to prefer day work, and that studies on night work often show reduced output, though it remains unclear whether this is due to physiological and psychological factors or other causes.
In this case the Court observed that the desire to carry out activities during daylight hours often prevented workers from obtaining normal rest. The Court explained that the principal way to achieve equality between different shifts was to provide night work conditions that were fully comparable to those of day work. This required a thorough establishment of standards relating to skill, materials, facilities, processes, methods, qualities and quantities so that performance could be measured, specified and compared across shifts. When the Court considered the direction in which progress might be made on this issue, it noted that the writers of the consulted literature admitted that the future trend was not entirely clear. They suggested that night work might decline in industries where it was not dictated by unavoidable technical requirements. This possible decline was attributed to a growing recognition of the need for economic balance among industries and to the relatively lower productivity of night work, which together caused the economic advantage of continuous operation to be questioned. Conversely, the writers also entertained the possibility that industry could discover more effective ways of organising night work, could eliminate the present disadvantages for both workers and management, and that society might decide that the social disadvantages of night work were outweighed by the social benefit of shorter overall work periods made possible by continuous operation of machinery with labour applied in short‑time shifts. The Court expressly declined to express a definitive opinion on this theoretical controversy. It reiterated that, as it had repeatedly observed in industrial adjudication, reaching conclusions solely on doctrinaire or theoretical considerations would be undesirable. Moreover, the Court emphasized that adopting a purely theoretical approach had lost much of its validity in the present context. Accordingly, the Court concluded that the Tribunal had not been correct in holding that the appellant’s claim for the introduction of a three‑shift system should be rejected on the ground that it would require the respondents to work at night. The Court further noted, based on the record, that the appellant appeared to be an enlightened employer and that, on the whole, the terms and conditions of service offered to the respondents were very fair. It also observed that the appellant made efforts within the factory to create conditions conducive to the efficient performance of the respondents. For example, the Court referred to the testimony of Miss Kolpe, who had been examined by the respondents, and who stated that aseptic conditions were maintained in sterile areas and that those rooms had to be kept in a sterile condition. The workmen assigned to those jobs sprayed the rooms with certain chemicals, performed swabbing of machines, walls and windows, and applied denatured spirit to machine parts before the machines were used. Cleaning of cabinets and machine parts was also required. The Court acknowledged that a grievance had been raised on behalf of the respondents that, during the night shift, there were no exhaust fans operating, and that this lack could cause skin irritation when methylamine phosphate (M.A.P.) and potassium carbonate were handled without gloves.
The appellant explained that the workers were provided with gloves and that a medical survey had found the complaints of body itching to be without merit. The Court observed that, upon commencement of a three‑shift system, the appellant was expected to adopt all reasonable precautions to ensure that the working conditions for the respondents remained healthy and conducive to the efficient performance of their duties. The Court noted that an additional issue required consideration. The respondents had urged the Tribunal that the proposed factory timetable, which would commence at 7.20 a.m. under the three‑shift arrangement, would cause inconvenience to female employees. To support this claim, two female employees were examined. Miss Desai testified that she resided in Thana and that reporting for duty at 7.20 a.m. would compel her to leave home before 5 a.m. Miss Rodriguies, also residing in Thana, added that an early start would prevent her from obtaining sleep because she gave tuition classes after returning home to support her family, meaning she could not retire before midnight. Evidence was also presented indicating that girls travelling early in the morning in the locality of the factory faced a risk of molestation by undesirable persons. The Court expressed that it was not persuaded by this evidence.
In assessing the respondents’ inconvenience plea, the Court stated that it would be reasonable to rely on isolated instances of female employees who lived outside Bombay, such as in Thana, or who were compelled by adverse economic circumstances to work beyond normal factory hours. The Court concluded, without hesitation, that a 7.20 a.m. start was not an overly early hour for work in Bombay. It further observed that this start time was selected with due regard to the availability of local transport. The Factory Manager, Mr Pillai, examined by the appellant, reported that he had prepared a summary of bus and train schedules and concluded that 7.20 a.m. would be convenient for all workmen. Consequently, the Court found that the ground of inconvenience relied upon by the Tribunal in rejecting the appellant’s three‑shift proposal could not be sustained. The Court also referred to Standing Order 10(1)(a), framed by the appellant, which expressly provides that more than one shift may be worked in any department or section at the discretion of the Manager, and that workmen may be transferred from one shift to another.
There was no doubt that the Standing Orders sanctioned under the Industrial Employment (Standing Orders) Act 1946 constituted statutory terms and conditions of service between the employer and its employees, and therefore the appellant could contend that when the respondents accepted their employment, they were aware that the management possessed the discretion to introduce more than one shift. While it was true that the relevant Standing Order empowered the appellant to introduce additional shifts, the Court observed that if the employees raised a dispute concerning such a change and the matter was referred to an industrial tribunal, the tribunal would be required to assess the reasonableness of the management’s proposed alteration. The Court further noted that the introduction of extra shifts could increase the workload imposed on employees and, in that respect, could amount to a change in the conditions of service, thereby justifying scrutiny by the industrial tribunal. Nonetheless, the Court emphasized that the possibility of more than one shift had been expressly contemplated by the Standing Order and that this fact could not be ignored when examining the reasonableness of the proposed change. In dealing with the competing arguments, the Court declined to adopt either extreme position. It refused to hold that, merely because the Standing Order allowed more than one shift, the management could exercise its discretion to alter the work schedule without any scrutiny by an industrial adjudicating authority, and consequently the appellant’s extreme stance could not be sustained. At the same time, the Court could not accept the contention that the introduction of three shifts, being a departure from the prevailing pattern in the pharmaceutical industry, automatically rendered the change impermissible. The Court stressed that the question must be evaluated in the light of the facts adduced before it, with due consideration given to the importance of increased production and the necessity for such a change. Accordingly, the Court was satisfied that the tribunal had erred in rejecting the appellant’s case for the introduction of three shifts. The Court also recorded that the appellant had consistently expressed willingness to address the issue of additional remuneration for the respondents, either by raising wages or by providing compensation consequent upon the proposed alteration of the factory’s working structure. It was further noted that, although the tribunal had ordered the appellant to pay night workers a ten per cent addition over their basic wages and dearness allowance for days worked in the third shift, the appellant was already paying twelve per cent for the third shift and eight per cent for the second shift. Consequently, the Court concluded that it could not be said that the appellant was unwilling to comply with an order directing appropriate additional payment to employees as a result of the introduction of the third shift.
In relation to the introduction of a third shift, the Court observed that the issue could not be resolved on appeal. Consequently, the Court ordered that the matter be remitted to the Tribunal that originally heard the dispute for a fresh determination. The Tribunal was instructed to allow both parties to present evidence if they so wished, to hear the parties, and to decide what additional remuneration, whether by increasing wages, granting compensation, or through any other appropriate method, should be payable to the employees as a result of the alteration of the factory’s working timetable caused by the third shift. The Court further specified that the three‑shift system would not be implemented until the Tribunal had finally resolved this question. Until such a decision is made, the interim arrangement that was sanctioned by the award would remain in force. The Court also expressed confidence that the Tribunal would consider the remitted issue with due speed.
The discussion then turned to the respondents’ appeal concerning the reduction of public holidays imposed by the award. The Court noted that the appellant had been providing its employees with all public holidays prescribed under the Negotiable Instruments Act, amounting to twenty‑seven holidays in the relevant year. The Tribunal had held that this number was excessively high and had directed that the holidays be reduced to ten. Counsel for the respondents contended that there was no justification for such a reduction, arguing that the employees had enjoyed the holidays as a term of their service and that no case had been made to withdraw that benefit. He further submitted that the Tribunal’s decision to cut the holidays substantially was motivated by its refusal to permit the introduction of the third shift or an increase in working hours, and he argued that if the third shift were allowed, there would be no basis for upholding the Tribunal’s award on holidays. The Court recognised that this latter argument possessed some merit, acknowledging that the Tribunal’s drastic reduction in holidays was partly influenced by its denial of permission to augment working hours. The Court then observed that holidays prescribed under the Negotiable Instruments Act are generally applicable only to Government institutions and carry specific financial and statutory consequences that the Act envisages. Commercial establishments and factories do not ordinarily observe these holidays, and therefore it would be unreasonable to require the appellant to grant holidays mandated by the Act. Moreover, it is widely accepted that the country observes an excessive number of public holidays, and when industrial production is urgent and paramount, it may be advisable to reduce the number of holidays in industrial concerns. In dealing with the present appeals, the Court considered these observations before proceeding further.
The Court observed that the necessity for increased production, which had been a significant consideration in evaluating the issue of operating three shifts, could not be disregarded. It noted that the Government of Maharashtra had historically pursued a comparatively liberal approach toward the grant of public holidays. For example, in the year 1961 the Maharashtra Government declared twenty‑eight public holidays, of which three fell on Sundays. The Court further pointed out that other state governments tended to adopt a more restrained policy. In the same year, the Government of Uttar Pradesh recognized eighteen public holidays, the Government of Andhra Pradesh seventeen, the Government of Mysore fifteen, and the Government of Madras fourteen. According to the Government of India, the general practice across the country was to limit the number of public holidays to sixteen per annum. The Court emphasized that the question of how many holidays should be permitted did not admit a uniform answer applicable in every circumstance; instead, it required an ad hoc determination based on the complete set of relevant facts in each case.
Having examined all the facts presented in the present matter, the Court concluded that the number of public holidays that the appellant was required to grant the respondents should be reduced from the amount sanctioned under the Negotiable Instruments Act to sixteen each year. Accordingly, the Court allowed both appeals. Appeal No 625 of 1962 was upheld, and the change proposed by the appellant, as set out in the notice of change served on the respondents, was permitted, subject to the Tribunal’s decision on the specific question that had been remitted to it. Appeal No 626 of 1962 was also substantially allowed, and the statutory number of paid holidays in a year was increased from ten to sixteen. In view of the circumstances, the Court made no order as to costs, and the appeals were finally allowed.