Greaves Cotton And Co. And Others vs Their Workmen on 14 November, 1963

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 272 to 280 of 1962

Decision Date: 14 November, 1963

Coram: K.N. Wanchoo, P.B. Gajendragadkar, K.C. Das Gupta

In this case the Court recorded that the dispute was between Greaves Cotton and Co. and others, who were the petitioners, and their workmen, who were the respondents, and that the judgment was delivered on 14 November 1963 by a Bench consisting of Justice K. N. Wanchoo, Justice P. B. Gajendragadkar and Justice K. C. Das Gupta; the opinion was authored by Justice K. N. Wanchoo. The case was cited as 1964 AIR 689 and 1964 SCR (5) 362 and it appeared in several reported law reports, including R 1966 SC 305 (41) and RF 1973 SC 2758 (11), among others. The judgment concerned industrial disputes arising under the Industrial Dispute Act relating to wage scales, the industry‑cum‑region formula, the permissibility of dividing unskilled workers into two classes, the payment of dearness allowance, incremental scales and adjustments.

The Court explained that the disputes referred to the Industrial Tribunal involved questions of wages, dearness allowance and gratuity, and that the companies had challenged the Tribunal’s award on several grounds. First, the Court held that the Tribunal’s reference to the Tripartite Conference recommendations, which had introduced a need‑based minimum wage, did not invalidate the award because the Tribunal’s final decision was based on a comparison of prevailing wages rather than on those recommendations, especially with respect to clerical and subordinate staff. Second, the Court observed that when applying the industry‑cum‑region formula for fixing wage scales, the Tribunal should give greater weight to the industry component if a large number of concerns in the same region are engaged in the same industry; however, where only a few concerns of the same kind exist in a region, the regional component becomes more significant, particularly for clerical and subordinate staff. Accordingly, the Tribunal was right to rely more on the regional part of the formula and less on the industry part in the present case, a view supported by the authorities Workman of Hindustan Motors v. Hindustan Motors ([1962] 2 J 352) and French Motor Car Company v. Their Workmen ([1963] Supp. 2 SCR 16).

The Court further held that the Tribunal was not justified in creating two separate classes of higher and lower unskilled factory‑workmen for the purpose of fixing wage scales. It also affirmed that employees who receive the same basic wages must be granted the same dearness‑allowance scales irrespective of whether they are employed as clerks, members of subordinate staff or factory‑workmen. In determining the appropriate dearness allowance for factory‑workmen in comparison with clerical staff, the Tribunal was required to consider the total wage packet of each category and compare it with the total wage packet of comparable concerns, thereby arriving at a just figure for the basic wage of each category of factory‑workmen. Finally, the Court noted that there is no legal bar to an industrial tribunal granting adjustments to employees in revised wage scales even where previous pay‑scales existed, provided such adjustments are made sparingly and after careful consideration of the facts and circumstances of each case.

An industrial tribunal may grant adjustments to employees in revised wage scales even where earlier pay‑scales existed, but such adjustments must be made sparingly and only after considering the specific facts and circumstances of each case. Judgment: Civil Appellate Jurisdiction. The matter concerned Civil Appeals Nos 272 to 280 of 1962, filed by special leave against awards dated 3 June 1960 in reference (IT) Nos 84 and 251 of 1959, 15 June 1960 in references (IT) Nos 112 and 252 of 1959, 16 June 1960 in reference (IT) No 121 of 1959, and 7 June 1960 in reference (IT) Nos 123, 180 and 236 of 1959, all issued by the Industrial Tribunal, Maharashtra at Bombay. Counsel for the appellants in all the appeals comprised S V Gupte, the Additional Solicitor‑General, N V Phadke, J B Dadachanji, O C Mathur and Ravinder Narain. Counsel for the respondents in Civil Appeal No 272/1962 were M C Setalvad, K T Sule, Madan G Phadnis, Jitendra Sharma and Janardan Sharma; and in Civil Appeals Nos 273‑280/62 the respondents were represented by K T Sule, Madan G Phadnis, Jitendra Sharma and Janardan Sharma. The judgment was delivered on 14 November 1963 by Justice Wanchoo. These nine appeals by special leave arose out of the awards of the Industrial Tribunal, Bombay, and were heard together. The disputes involved four appellant companies and their workmen respondents, and the matters were referred to the Tribunal by nine reference orders issued at various dates between April and December 1959. The principal controversy that gave rise to the references concerned the rates of wages, dearness allowance and gratuity; the references also contained other items, but those extraneous matters are not before this Court. The four appellant companies are described as follows: Greaves Cotton and Co. is primarily engaged in investing capital in manufacturing concerns; Greaves Cotton and Crompton Parkinson Private Limited is principally a distributor of the products of Crompton Parkinson (Works) India Limited and provides service and repair for those products at its workshop; Konyon Greaves Private Limited mainly manufactures high‑grade interstranded ropes for the textile industry; and Ruston and Hornsby (India) Private Limited chiefly manufactures oil engines and pumps. The last three companies are, in one way or another, controlled by Greaves Cotton and Co., and consequently the Tribunal dealt with the central dispute relating to wages and dearness allowance as a single matter. Two reference orders were issued concerning each of the first three companies and three reference orders concerned Ruston and Hornsby Private Limited, resulting in nine appeals before this Court. Although nine separate awards were made, the principal award dealing with the core dispute over wages and dearness allowance was common to all. It appears that the wages and dearness allowance prevailing

In this case the Court observed that the wages and dearness allowance that were being paid in the four companies had been in force since 1950, which was the year when the previous award had been made between the parties. The Court further noted that there had been no serious dispute before the Tribunal regarding the financial capacity of the companies. Because the first company exercised control over the other three companies, the Tribunal found that the rates of wages and dearness allowance were identical for the clerical and subordinate staff in all four enterprises. The Court said that the same uniformity appeared to exist for the factory‑workmen as well. Accordingly, the Tribunal had examined the clerical and subordinate staff separately from the factory‑workmen. For the clerical and subordinate staff, the Tribunal first compared the wages and dearness allowance being paid in the four companies with the rates prevailing in comparable concerns. After making that comparison, the Tribunal revised the rates to bring them into line with the comparable standards. The Tribunal then explained how the clerical and subordinate staff would be placed on the new wage scales, and it made certain adjustments. In that connection, the Tribunal granted one to three extra increments to employees depending on the length of their service between 1950 and 1959. The Tribunal finally ordered that the award would take effect from 1 April 1959, a date that was a week before the first reference was made with respect to the first company. The Tribunal subsequently turned to the factory‑workmen and prescribed specific rates of wages for them. It also gave the factory‑workmen the same dearness allowance that had been fixed for the clerical and subordinate staff and directed that the same adjustments be made on that basis. The Tribunal then addressed the question of gratuity. It provided that the maximum gratuity payable could be up to twenty months’ wages and added a provision that if an employee was dismissed or discharged for misconduct that caused financial loss to the employer, gratuity would be withheld to the extent of that loss. The principal ground of attack by the appellants concerned the award’s provisions on wages and dearness allowance. They argued that the Tribunal had failed to apply correctly the industry‑cum‑region formula that is normally used to fix wages and dearness allowance, and that the Tribunal had been unduly influenced by the recommendations of the Tripartite Conference, which had suggested a need‑based minimum wage. They further contended that the comparative analysis had been made with concerns that were not truly comparable and that the wages awarded were even higher than those prevailing in any comparable concern. Additionally, the appellants claimed that the Tribunal had not taken into account the combined effect of the increase in basic wage and dearness allowance, a step that should have been taken to determine whether the total remuneration of the appellants’ employees could be compared with the total remuneration of the comparable concerns. In support of that contention, they pointed out that in the revised wage scales the Tribunal had increased both the maximum and the minimum wages, had raised the annual rate of increment, and had reduced the number of years required to reach the maximum wage level.

The appellants challenged several adjustments made by the Tribunal, including the order that rendered the award enforceable from 1 April 1959. Regarding the factory workmen, they contended that the Tribunal failed to compare the wages in the appellant firms with the wages prevailing in even those establishments that the Tribunal itself deemed comparable. They further alleged that the Tribunal invented a new class of factory workmen termed “higher unskilled,” a class that neither the workmen demanded nor existed in any of the comparable concerns. Consequently, the principal issue for determination was whether the Tribunal erred by not adhering to the industry‑cum‑region principle and by placing excessive reliance on the recommendations of the Tripartite Conference. It is correct that the Tribunal opened its award with a reference to the Tripartite Conference recommendations, which had formulated a need‑based minimum wage. The appellants argued that this reference predisposed the Tribunal to set wage scales at an unduly high level. Nevertheless, a close reading of the award shows that although the Tribunal discussed the Tripartite recommendations at length, it ultimately did not adopt them when fixing the award. The Tribunal explained that it referred to those recommendations because the workmen based their claims upon them and sought a fixing of wage scales in accordance with the Conference. After consideration, the Tribunal concluded that complying with the recommendations was not feasible, even though it recognised that the financial condition of the appellant firms required an upgrade of emoluments. The Tribunal therefore examined the wages prevailing in the establishments it regarded as comparable and fixed the wages for the appellant firms on the basis of those prevailing rates. Accordingly, while the Tripartite Conference recommendations appear in the introductory portion of the award, the final determination was not derived from them; instead the Tribunal performed a comparative analysis with the wages of the concerns it deemed comparable, at least with respect to clerical and subordinate staff. The Court is therefore not prepared to hold that the mere reference to the Tripartite recommendations renders the remainder of the award void. The appellants’ principal contention remains that the Tribunal misapplied the industry‑cum‑region formula, which is the foundation for setting both wages and dearness allowance, by comparing the appellant firms with concerns that were not truly comparable. They further maintain that the Tribunal gave undue weight to the regional component of the formula and insufficient weight to the industrial component when dealing with clerical and subordinate personnel, thereby committing an error. In support of this argument, the appellants cited two precedents of this Court, namely Workmen of Hindusthan Motors v. Hindusthan Motors and French Motor Car Company v. Their Workmen, and emphasized that the principles articulated in the Hindusthan Motors case were more applicable to the present dispute than those articulated in the French Motor Car Company case.

In the Hindusthan Motors case (1) the Court observed that it is ordinarily desirable to achieve as much uniformity as possible in the wage‑scales of different concerns belonging to the same industry and operating in the same region, because such uniformity places similar industries on an essentially equal footing in their production struggle. Consequently the Court adopted the wage‑scales that had been awarded by the Third Major Engineering Tribunal in Bengal in that matter. It was urged that the Tribunal should have taken into account comparable concerns within the same industry and should have fixed wage‑scales on the same lines so that, with respect to the manufacturing concerns in the present appeals, there would be equality in competition. In the French Motor Car Co. case (2) the Court, however, held that with regard to clerical and subordinate staff it may be permissible to consider even those concerns that are engaged in different lines of business, because the work performed by clerical and subordinate employees is more or less the same in all kinds of concerns. The Court expressed the view that there is no inconsistency between the principles laid down in these two decisions. It affirmed that the basis for fixing wages and dearness allowance is the industry‑cum‑region formula. Where a large number of industrial concerns of the same kind exist in the same region, it is proper to give greater emphasis to the industry component of that formula, since doing so places all concerns on a more or less equal footing with respect to production costs and therefore fosters equal competition in the market; this approach also applies to clerical and subordinate staff whose wages and dearness allowance form part of the calculation of production costs. Conversely, where the number of comparable concerns is small in a particular region, the competition aspect is less important and the regional component of the industry‑cum‑region formula assumes greater significance, especially with reference to clerical and subordinate staff. This was the view expressed in the French Motor Car Co. case, where the company already paid the highest wages in its specific line of business and therefore the comparison for fixing wage‑scales and dearness allowance had to be made with the most similar concerns, even if they operated in different lines of business. The principle that emerges from these two decisions is that, in applying the industry‑cum‑region formula for fixing wage‑scales, a Tribunal should stress the industry element when there are many concerns in the same region carrying on the same industry; in such circumstances wages should generally be fixed on the basis of comparable industries so that production costs are not unequal and competition remains balanced. However, when the number of industries of the same kind in a particular region is small, the regional element of the formula becomes paramount, particularly for clerical and subordinate staff, because the nature of their work does not differ markedly across different industries.

In this case the Tribunal considered that when the number of enterprises of the same kind in a particular region was small, the regional component of the industry‑cum‑region formula assumed importance, especially for clerical and subordinate staff, as was pointed out in the French Motor Car Co. case where the work of that class of employees did not differ much across industries. The Tribunal appeared to place greater reliance on the regional element than on the industrial element. The Court held that it could not be said that the Tribunal was wrong for two reasons. First, the four companies were not engaged in the same line of industry; nevertheless, because Greaves Cotton and Co. was the controlling company of the other three, it had been customary to keep identical wage scales for clerical and subordinate staff in all of those concerns. Second, unlike the situation in the Hindusthan Motors case, there was no clear indication that a large number of comparable concerns existed in the same region. In fact the principal enterprise among the four was Greaves Cotton and Co. Limited, which functioned mainly as an investment and financial company, and therefore the Tribunal was right to select for comparison those companies that could be compared with the main concern, namely Greaves Cotton and Co. Both parties filed wage scales that they considered to be prevailing in what they regarded as comparable concerns, and the documents showed that some of the comparable concerns were common to the submissions of both sides. Consequently the Tribunal was not in error in emphasizing the regional aspect of the industry‑cum‑region formula with respect to clerical and subordinate staff. Given the standing of the main company, Greaves Cotton and Co. Ltd., it was not improper for the Tribunal to rely on the comparable concerns cited by the respondents, namely (1) [1963] Supp. 2 S.C.R. 16 (1/SCI/64 --- 24) and (2) [1962] 2 L.L.J. 352, several of which overlapped with those cited by the appellants. The Tribunal then examined the minimum and maximum rates for various categories of clerical and subordinate staff that prevailed in those comparable concerns, together with the annual increments and the period required to reach the maximum rates. Using that information the Tribunal fixed wage scales for the various categories of clerical and subordinate staff of the appellants that lay between the extremes found in the comparable concerns. Further, as the financial capacity of the appellants was not disputed, the Tribunal

The Tribunal positioned the wage scales for clerical and subordinate staff close to the highest scales, noting that from 1950 for nine consecutive years there had been no increase in wage scales. Consequently, the Court concluded that the wage rates fixed by the Tribunal, which were based on the industry‑region formula, could not be successfully challenged by the appellants. The appellants, however, contended that the Tribunal had failed to consider the total wage package comprising basic wages and dearness allowance, and that this omission caused the total remuneration fixed for the appellants to be substantially higher than that in the comparable concerns. The Court acknowledged that the Tribunal had indeed not expressly computed the aggregate wage package on the basis of the prescribed basic wage and dearness allowance. Nevertheless, because the scales fixed by the Tribunal were lower than the highest scales among the comparable concerns yet higher than the lowest scales, it could not be said that the total wage package for the appellants would inevitably exceed that of the other comparable concerns. This point becomes clear when the dearness allowance fixed by the Tribunal is examined, for the allowance is also positioned between the highest and the lowest allowances observed in the comparable concerns. Accordingly, the Court could not conclude that the overall wage package in these matters was the highest in the region. Although the Tribunal should have examined this aspect, its failure to do so does not render its decision vulnerable to attack on the ground that the total wage package is the highest regionally. Turning to the issue of factory‑workmen, the Court found merit in the appellants’ argument concerning the method of fixing wage scales for that group. The respondents had suggested that a separate wage scale should be established for each distinct category of workmen. The Tribunal rejected that suggestion and held that the conventional classification into unskilled, semi‑skilled and skilled grades should be applied, with each worker identified by his designation rather than by the class to which he is assigned. In the present establishments there had previously been six categories—unskilled, semi‑skilled 1, semi‑skilled 2, skilled 1, skilled 2 and skilled 3—and the Tribunal retained these categories while adding a seventh category termed higher unskilled. It is not seriously contested that the higher‑unskilled category does not exist in the comparable concerns, and the Court could not discern a logical basis for dividing the unskilled class into lower and higher sub‑categories, although such subdivision may be understandable for semi‑skilled and skilled groups.

In this case, the Court observed that while the semi‑skilled and skilled categories could be subdivided according to the degree of skill possessed, the unskilled class could not be divided into degrees of lack of skill. Consequently, the Tribunal was not justified in creating a separate “higher unskilled” category. The Court held that it was neither necessary nor desirable to invent such a class and that the six categories that had previously existed should continue to be used.

The appellants challenged the wage scales fixed by the Tribunal for those six categories, contending that the Tribunal had completely ignored the prevailing wages in comparable concerns. The Court noted that a review of the award confirmed this allegation. The Tribunal had failed to consider the wages earned by workers in similar establishments, even though exemplars bearing that information had been filed before it. Rather than making a proper comparison for factory‑workmen, the Tribunal gave scant regard to the exemplars and did not apply the same method of comparison that it had employed for clerical and subordinate staff. In view of these shortcomings, the Court directed that the wage‑scales for factory‑workmen be set aside. The matter was to be remanded to the Tribunal so that it could fix wage‑scales by retaining the existing six categories and taking into account the wages prevailing in comparable concerns. The Court further allowed the parties to adduce additional evidence on this issue.

Turning to the question of dearness allowance, the Court described the allowance that was prevalent in the appellants’ concerns for clerical staff, based on the cost‑of‑living index of 411‑420. For the first hundred rupees of basic salary, the allowance was 115 percent of the basic salary plus an additional 5 percent, or the textile scale for a thirty‑day month, whichever was higher. For the next band of one hundred rupees (₹101‑₹200), the allowance was 35 percent plus 1½ percent. For the third band (₹201‑₹300), it was 25 percent plus 1 percent. For salaries above ₹300, the allowance was 17½ percent plus three‑quarters of a percent.

The Tribunal, however, fixed a different scale of dearness allowance. According to the Tribunal’s schedule, when the consumer price index rose or fell by ten points within the 411‑420 range, the allowance for the first ₹100 of basic salary was 115 percent plus 5 percent; for the second ₹100, it was 50 percent plus 2 percent; for the third ₹100, it was 25 percent plus 1 percent; and for the balance up to ₹600, it was 20 percent plus 1 percent. The Court compared the two sets of figures and observed that there was no difference in the first and third hundred‑rupee bands, a slight improvement in the second band, and a very slight improvement above the third band. The Court noted that the Tribunal’s scale was consistent with other recent dearness‑allowance scales fixed by Tribunals in the same region. While the improvement in the second hundred‑rupee band was the most noticeable, the Court could not conclude that workers in that wage range did not require the higher relief that other tribunals had granted in view of rising prices. Accordingly, the Court expressed the view that the dearness allowance fixed by the Tribunal was not open to successful attack.

The Court observed that the Tribunal’s determination for clerical employees could be challenged, and therefore the discussion turned to the situation of subordinate staff. It was noted that, within the concerned establishments, subordinate workers had been receiving dearness allowance according to various scales that were derived from the old textile dearness‑allowance system. The Tribunal, however, placed subordinate employees on the same dearness‑allowance scale that applied to clerical staff. The Tribunal justified this by stating that any inconsistency in the payment of dearness allowance between clerical and subordinate workers needed to be eliminated. The Court explained that, because different scales were used for the two categories, a subordinate worker earning the same basic wage as a clerical employee would obtain a lower amount of dearness allowance. This disparity was highlighted as being especially stark when compared with the situation of factory‑workmen, who also operated under a different dearness‑allowance scale. The Tribunal therefore concluded that dearness allowance, which is intended to offset the rise in the cost of living, ought to be paid on a uniform basis to clerical staff, subordinate staff and factory‑workmen, since the requirement for cost‑of‑living neutralisation was felt equally by all categories of employees.

The Tribunal further pointed out that there was a growing tendency toward uniformity in dearness‑allowance scales among clerical staff, other employees and factory‑workmen, and it cited several firms where identical scales were already in use for all workers. The appellants argued that the prevailing practice in the region was to maintain separate dearness‑allowance scales for clerical staff and for other categories, including factory‑workmen, and that the Tribunal should have adhered to this regional pattern. The Court found the Tribunal’s reasons for applying the same dearness‑allowance scale to all categories to be well‑founded. It held that, at this stage, employees who receive the same basic wage should also receive the same dearness allowance, regardless of whether they are clerks, subordinate staff or factory‑workmen, because all face the same pressure of high prices. Moreover, subordinate staff and factory‑workmen, like clerical employees, are equally eager to educate their children and to enjoy comparable amenities. Consequently, there is no justification for a differential dearness‑allowance amount among workers of different categories who earn the same wages. In the Court’s view, the Tribunal correctly followed the emerging regional trend by fixing a uniform dearness‑allowance scale for subordinate staff, clerical staff and factory‑workmen.

The Court observed that the dearness allowance granted to subordinate staff and to factory workmen should be the same as that granted to clerical staff. Accordingly, with respect to the subordinate and clerical categories, the Court found no reason to disturb the rate of dearness allowance that had been fixed by the Tribunal. The matter then turned to the specific question of dearness allowance for the factory‑workmen. In that part of the dispute, the Court had already set aside the Tribunal’s award concerning the wage scales. Because the wage‑scale award was voided, the Court held that the award relating to dearness allowance must also be set aside, having previously indicated that the Tribunal must consider the total remuneration package – that is, the combined amount of basic wages and dearness allowance – when fixing both wages and dearness allowance. The case was therefore remitted to the Tribunal for fresh determination of wages and dearness allowance for the factory‑workmen. On remand, the Tribunal would be free to fix the same rate of dearness allowance for factory‑workmen as it fixes for clerical staff, provided that, in making any comparison, it incorporates the total wage package (both the basic wage it determines and the dearness allowance) and measures this total against the total wage packages of comparable establishments. By doing so, the Tribunal would be able to arrive at a just figure for the basic wage of each category of factory‑workman. The Court emphasized that the whole exercise was left to the discretion of the Tribunal, which could adopt any method it considered appropriate so long as the method led to a fair conclusion after the requisite comparisons had been made.

The Court then turned to the issue of adjustment. It noted that the Tribunal had allowed one to three increments for employees depending on length of service during the period from 1950 to 1959. Counsel argued that no adjustment should have been permitted because incremental scales had already been in force in the concerned undertakings, and because the Tribunal’s award had increased both the minimum and maximum wage levels while also granting generous annual increments that reduced the time required for an employee of the clerical or subordinate staff to reach the maximum rate. The argument relied heavily on the decision of the French Motor Car Co. case. The Court acknowledged that the Tribunal’s decision to provide larger increments indeed shortened the period needed to reach the maximum wage. However, the Court held that this fact alone did not preclude the grant of an adjustment. The counsel further submitted that the French Motor Car Co. case held that where wage scales already existed, no further adjustment should be granted by way of extra increments, and that this authority should be applied fully to the present facts. The Court examined the reasoning of that earlier decision, which observed, after reviewing a large number of awards dealing with adjustments, that adjustments are usually granted when wage scales are being fixed for the first time. Nevertheless, the Court stressed that there is no statutory prohibition against an industrial tribunal granting adjustments in revised wage scales even where prior pay‑scales existed; such adjustments must nevertheless be made sparingly, taking into account the specific facts and circumstances of each individual case.

The Court observed that even when wage‑scales already existed, an adjustment might still be warranted where the earlier increments were exceptionally small, making a second adjustment necessary to achieve fairness. A further ground for a second adjustment was the overall low level of the pay‑scales themselves. In such situations tribunals have, on several occasions, granted a second adjustment. The Court also referred to an earlier decision in which it was noted that the incremental scales prevailing in the company under consideration were the highest in that particular industry. Consequently, the Court in that earlier case set aside the adjustments that had been granted and directed that clerical employees be placed on the next higher step of the new scales where the new scale did not contain a step that matched the clerk’s existing salary. From this discussion the Court derived that the question of whether an adjustment should be granted is never a matter of rule but must be decided by examining the specific facts and circumstances of each case. Accordingly, the Court turned to the facts of the present matter to determine whether the adjustment ordered by the tribunal was appropriate.

The tribunal had placed before it tables of comparative increment rates for various grades of clerks, as recorded in the report cited as [1963] Supp. 2 S.C.R. 16. A careful review of those tables together with the pay‑scales that had been in force in the appellants’ establishments since 1950 showed that the scales were not competitive when compared with those of similar establishments; in fact, they were on the lower side. For example, junior clerks in the appellants’ firms received a first increment of Rs 5, and that rate persisted for thirteen years. By contrast, other firms that also started with a Rs 5 first increment changed to a higher rate after a much shorter period—never more than eight years and often after only three or four years. Moreover, some comparable firms began with a first increment that was higher than Rs 5. A similar pattern was observable for senior clerks, whose initial increments were also low and persisted for an extended period. Therefore, the first increments in the appellants’ concerns were generally lower and lasted longer than those in comparable industries. Under these circumstances, the tribunal’s decision to provide increments through a second adjustment cannot be said to be erroneous. The factual matrix of these cases differed from that of the French Motor Car Co. case, and consequently the Court found no ground to disturb the tribunal’s order of adjustment. After the revision of wage‑scales, the addition of dearness allowance and the adjustment, the employees of the appellants’ establishments would now compare favourably with the leading establishments in the region. Considering that the appellant, Greaves Cotton & Co., possesses adequate financial resources and enjoys a strong reputation in the area, the Court concluded that the overall wage package fixed was neither abnormal nor disproportionately high in relation to comparable concerns, and therefore there was no justification for intervening in the adjustments ordered.

In this matter the Court considered the issue of the alleged retrospective operation of the award. The Tribunal received its first reference on 8 April 1959 and its final reference in December 1959. The Tribunal subsequently granted wage‑scales and related allowances effective from 1 April 1959. The Court held that this cannot be described as truly retrospective because the operative date coincides with the date of the first reference concerning the principal company. Accordingly, the Court found no justification for disturbing the Tribunal’s determination of the date from which the award would become operative.

The Court then turned to the question of gratuity. Two points were challenged. First, the Tribunal fixed the maximum gratuity at twenty months rather than the previously usual fifteen months. Second, the Tribunal provided that deductions from gratuity should be limited to the amount of financial loss caused by misconduct in cases of dismissal for misconduct. The Court observed that the second provision reflects the customary practice in the region and is therefore not open to dispute. Regarding the increase to a twenty‑month ceiling, the Court noted that the Tribunal relied on several authorities where the maximum gratuity exceeded fifteen months. Moreover, tribunals have begun to set higher ceilings, exemplified by the agreement in the Mackinnon Mackenzie concern that fixed the ceiling at thirty months. In view of this development, the Court concluded that no interference with the Tribunal’s decision was warranted.

Consequently, the Court dismissed the appeals insofar as they concerned the retrospective effect, the adjustments, and the determination of wages and dearness allowance for clerical and subordinate staff. The appeal relating to the factory‑workmen was allowed in part, and the cases were remanded to the Tribunal to fix the wage structure, including basic wage and dearness allowance, and to grant adjustments in accordance with the observations made by the Court. The new award issued on remand will also take effect from 1 April 1959. The appeals concerning gratuity were dismissed. The Court ordered each party to bear its own costs and permitted a period of two months from the date of the order for payment of any arrears. The appeal was therefore partly allowed and remanded.