# HINDUSTAN LEVER LTD v. RAM MOHAN RAY & ORS

- **Citation:** [1973] 3 S.C.R. 624
- **Court:** Supreme Court of India
- **Decided:** 1973-03-01
- **Bench:** A. Alagiriswami, I. D. Dua, C. A. Vaid!Alingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hindustan-lever-ltd-v-ram-mohan-ray-ors-5910
- **Pages:** 13

## Headnote

Industrial DiJ/putes Act (14 of 1947) ss. 9A, 33A and 33C and 4th
Schedule items 8, 10 and 11-Scope of Industrial DiJ/pute-Reference to
Tribunal Applications by Workers pending reference-DiJ/posed of by
different Tribunal-Contradidory findings-Procedure not illegal.
Constitution of India, 1950, Article 13~cope of.
Before September 196.6 the marketing organisation of the employer·
company was in three divisions.
Thereafter it was organised into two
divisions. There were extensive and prolonged consultations. between the
employer and the employees but the reorganisation was not approved by
the employees. The new scheme was introduced on the 5th or 6th 5eptember and the industrial dispute arising therefrom was referred to the
Tnbunal on 30th September. The workers presented themselves for work
every day and offered to work according to the old scheme but they were
not given any w(!rk. They were told that as long as they refused to work
under the new scheme they would not be paid any wages. Some workers
had voluntarily retired and the vacancies were not filled. Therefore, pending th~ adjudication on the reference already made, se~n workers filed
applications under s. 33A of the Industrial Disputes Act, 1947, alleging·
that during the pendency of the adjucation, their service conditions bad
been changed adversely and that their salary for the month of October
had not been paid.
The Industrial Tribunal was
different in the two
cases as also the evidence let. in. in the two cases.
In the main reference,
the Tribunal held in favour of the" employer.
With reference to
the
applications of the employees, the other Tribunal held in favour ·of the
employees on the grounds that the conditions of . work had been changed
to the workers' prejudice, that the reorganisation was likely to lead to re·
trenchmen~ that the matter thus fell under item I 0 of Schedule 4 to the
Act and that· therefore, the employees were justified in refusing to work.
Both parties appealed to this Court.
HELD : On a consideration df the material in each of the awards
both the awards should be upheld.
[628 A-BJ
. (I) The evidence given in the main reference not being a part of the
evidence in the applications filed by the employees it is . not open to this
Court to take it mto consideration in deciding the appeals filed by the
employer as against the award in favour of the employees. [628AJ
(2) This Court, in considering a matter under Art. 136, does not
ordinarily reassess the evidence on the basis of which the Tribunal came
to its conclusion. It will interfere with ftndings of fad> only if they are
unsupported by any evidence or are wholly perverse.
[628 D-BJ
(3) The reorpnisation is neither a change in usage
fallin11
tmder
item 8 of the 4th Schedule to the Act, nor rationalisati0n falling under
item 10, nor an increase or reduction in .the nUIJlber of. persons employed
in any department falling under item 11; and hence, it w.s not necessary
.. ,, give any notice under s. 9A of the Act. (633 D-BJ
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HINDUSTAN LEVER V. R. M. RAY
625
(a) The employer has a right to organise his work in the manner he
pleases.
[631C]
(b) The various decisions shoW that whether any particular practice
or allowance or concesSion had become a condition
of service
would
always depend upon the 'facts and circumstances of each. case..
On the
evidence and findings given by the Tribunal it cannot be held that there
has been any change in the terms and conditions of service of the workers
in this case to their detriment.
[633 C-El
Parry & Campany's [19701 1 L.L.J. 429; Dharangadhara
Chemical
Works Ltd. v. Kan/u Kalu & Ors. [1955] 1 L.L.J.
316; Chandramalai
Estate'· It; Workmen [1960] 2 L.L.J. 243; The Graham Trading Co.
(India) Ltd. v. It~ Workmen [1960] 1 S.C.R. 107; Workmen of HindUJ>o
tan Shipyard Ltd. v. l.T. [1961] 2 L.L.J. 526; McLeod & Co, v. Its Work:
men [1965]
1 L.L.J.
396; Indian Overseas Bank v.
Their Work7?1en
[1967-68]
33
F.J.R..
457; Indian Oxygen Limi

## Text

624
HINDUSTAN LEVER LTD.
V.
RAM MOHAN RAY & ORS.
(With cannected appeal)
March 1, 1973
(A. ALAGIRISWAMI, I. D. DUA AND C. A. VAID!ALINGAM JJ.)
Industrial DiJ/putes Act (14 of 1947) ss. 9A, 33A and 33C and 4th
Schedule items 8, 10 and 11-Scope of Industrial DiJ/pute-Reference to
Tribunal Applications by Workers pending reference-DiJ/posed of by
different Tribunal-Contradidory findings-Procedure not illegal.
Constitution of India, 1950, Article 13~cope of.
Before September 196.6 the marketing organisation of the employer·
company was in three divisions.
Thereafter it was organised into two
divisions. There were extensive and prolonged consultations. between the
employer and the employees but the reorganisation was not approved by
the employees. The new scheme was introduced on the 5th or 6th 5eptember and the industrial dispute arising therefrom was referred to the
Tnbunal on 30th September. The workers presented themselves for work
every day and offered to work according to the old scheme but they were
not given any w(!rk. They were told that as long as they refused to work
under the new scheme they would not be paid any wages. Some workers
had voluntarily retired and the vacancies were not filled. Therefore, pending th~ adjudication on the reference already made, se~n workers filed
applications under s. 33A of the Industrial Disputes Act, 1947, alleging·
that during the pendency of the adjucation, their service conditions bad
been changed adversely and that their salary for the month of October
had not been paid.
The Industrial Tribunal was
different in the two
cases as also the evidence let. in. in the two cases.
In the main reference,
the Tribunal held in favour of the" employer.
With reference to
the
applications of the employees, the other Tribunal held in favour ·of the
employees on the grounds that the conditions of . work had been changed
to the workers' prejudice, that the reorganisation was likely to lead to re·
trenchmen~ that the matter thus fell under item I 0 of Schedule 4 to the
Act and that· therefore, the employees were justified in refusing to work.
Both parties appealed to this Court.
HELD : On a consideration df the material in each of the awards
both the awards should be upheld.
[628 A-BJ
. (I) The evidence given in the main reference not being a part of the
evidence in the applications filed by the employees it is . not open to this
Court to take it mto consideration in deciding the appeals filed by the
employer as against the award in favour of the employees. [628AJ
(2) This Court, in considering a matter under Art. 136, does not
ordinarily reassess the evidence on the basis of which the Tribunal came
to its conclusion. It will interfere with ftndings of fad> only if they are
unsupported by any evidence or are wholly perverse.
[628 D-BJ
(3) The reorpnisation is neither a change in usage
fallin11
tmder
item 8 of the 4th Schedule to the Act, nor rationalisati0n falling under
item 10, nor an increase or reduction in .the nUIJlber of. persons employed
in any department falling under item 11; and hence, it w.s not necessary
.. ,, give any notice under s. 9A of the Act. (633 D-BJ
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HINDUSTAN LEVER V. R. M. RAY
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(a) The employer has a right to organise his work in the manner he
pleases.
[631C]
(b) The various decisions shoW that whether any particular practice
or allowance or concesSion had become a condition
of service
would
always depend upon the 'facts and circumstances of each. case..
On the
evidence and findings given by the Tribunal it cannot be held that there
has been any change in the terms and conditions of service of the workers
in this case to their detriment.
[633 C-El
Parry & Campany's [19701 1 L.L.J. 429; Dharangadhara
Chemical
Works Ltd. v. Kan/u Kalu & Ors. [1955] 1 L.L.J.
316; Chandramalai
Estate'· It; Workmen [1960] 2 L.L.J. 243; The Graham Trading Co.
(India) Ltd. v. It~ Workmen [1960] 1 S.C.R. 107; Workmen of HindUJ>o
tan Shipyard Ltd. v. l.T. [1961] 2 L.L.J. 526; McLeod & Co, v. Its Work:
men [1965]
1 L.L.J.
396; Indian Overseas Bank v.
Their Work7?1en
[1967-68]
33
F.J.R..
457; Indian Oxygen Limited v. Udaynath Singh
[1970] 2 L.L.J. 413; Oil & Natural Gas Commission v. Their Workmen
[1972] 42 F.J.R. 551 and Tata Iron & Steel Co. v. Workmen A.l.R. [1972]
S.C. 1917, referred to.
(c) The Tribunal held on the basis of oral as well as documentary
evidence that the contention of the workers that it was a condition
of
serviCe of every employee to work for only One division at a time was
not established.
The arrangement of the words and phrases in item
10
shows that only rationalisation or standardisation or improvement
of
plant or technique
which is likely t.o lead to retrenchment of workmen
that would fall under that item and not mere rationalisation or standardi·
sation. The retrenchment contemplated is retrenchment as defined
in
s. 2(00), which does not include voluntary retirement of the workmen.
Therefore. the \VOrkers cannot make a grievance of the voluntary retirement and non-filling Of vacancies and try to bring the matter under item
10. The employer had the right to decide the staff complement and to
fi11 only such jobs as continued to exist and not automatically
replace
every individual.
[630 A-HJ
Alembic Chemical Works Co. Ltd. v. The Workmen, [1961] 3 S.C.R.
297, referred to.
Therefore, there is no reason for differing from the findings of the
Tribunal that there ·bas been no change in usage adversely affecting the
workers coming under item 8, and that there has been no retrenchment
under ilem 10.
[63201
( 4) The 4th schedule relates to conditions of service for change of
which the notice is to be given, and s. 9(A) requires the employer to give
notice under that section to the workmen likely to be affected by such
change. The word 'affected' in the circumstances could only refer to the
worken being adversely affected and unless it could be shc.wn· that the
abolition of one department has adversely affected the workers it cannot
be brought under item 11.
[631 A-CJ
["The. question whether the prolonged and detailed discussion between
the. parbes was a substantial compliance wilh the provisions of s. 9 A not
decided].
f633El
(5) But the non-payment of wages in the circumstances of this case
amounts to "!' alteration in the conditions of serviee and the fact that the
scheme was 10troduced before the reference under s. lO was made does
not bar an application under s .. 33A. The tribunal was justified in coming to lhe conclusion that 1his alteration in the conditions of service could
not have been made without the notice under s. 9A. [634 OD; 635 B-C:
626
SUPREME COUR.T REPORTS
[1973] 3 S.C.R.
(a) The applications in this case were not for wages
due for the
<month of September but for October.
[634E]
(b) The refusal to pay wages was not a solitary instance in respect of
which an application could have' been Irulde under s. 33C. It was a con·
tinued refusal and the cause of action arises de die in diem. If the refusal
of the workers to work under reorganisatidn scheme is justified then the
refusal by management to pay unless they work under the reorganisation
scheme would
amount to alteration of the conditions of service <if
Workers. [634 G·HJ
(c) Even if an application had been made under s. 33C the whole
scheme would have been considered and it is not fair at this distance of
time to drive the workers to file application under that section, the procedure for which would be the same as under s. 33A, merely on die
ground that the introduction of the scheme had taken place before the
reference to the adjudication was made. [636 B-C]
(d) The Tribunal had found that the
reorganisation
scheme had
rendered some workers surplus, that the scheme had seriously prejudiced
tile workers, and that the apprehension of the workers that the reorganisation· would result in some members of the staff becoming surplus had
come true. [635 A-Bl
North Brooke Jute Co. Ltd. [1960) 3 S.C.R. 364, National Coal Co. v.
L. P. Dave, [1956] A.I.R. Patna 294, Shamo, Biscuit Co. v. Their Workmen
[1952] 2 L.L.J. 353, referred to:
Ram Nath Koeri v. Lakshmi Devi Sugar Mills & Ors. [1956] 2 L.'L.J.
11, approved.
(e) If all the evidenee which was let in in the main referenae were
available to the Tribunal which decided the applications of the workert,
the result might have lieen llift'erent. But it could not be said that the
Tribunal is wrong in having proceeded to dispoee <if the matte~ the
way it. did. f,636 A-Dl
CML APPELLATE JUIUSDrcnoN : Civil Appeals Nos. 675 to
681 of 1967.
'·
.Appe8Js by special leave from the Award dated ,March 23,
1967 of the Third Industrial Tribunal, West Bengal in Misc. Cases
Nos. 161, 160, 162-64 and 167 of 1966.
AND
Civil Appeal No. 1759 of 1971
Appeal by special leave from the Award dated August 11,
1969 of the Third Industrial Tribunal, West Bengal, Calcutta
in Case No. vm:-373 of 1966 published in the. Calcutta Gazette
dated 27-9-1969.
·
S. V. Gupte, G. B. Pai, Bhuvan.esh Kumari, B. Ram Rakhlanl
and/, B. Dadochanji & Co. for the. appellant. (In C.As, 675681/67).
.
V. M. Tarkunde, ]Wthin TJas, litendra Sharma and s. IC.
Ganguli & Co. for the appellant. (In C.A. 1759/71).
.
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HINDUSTAN LEVER v. R. M. RAY (Alagiriswami, !.)
627
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the Respondent.
The Judgment of the Couvt was delivered by
ALAGIRISW AMI; J .-The first batch of appeals are by the
Hindustan Lever Ltd. (hereinafter called the
Employer)
and
Civil Appeal No. 1759 of 1971 is by the Mazdoor Sabha of the
workers of the same employer in its Calcutta Branch.
The Calcutta Branch was concerned only with marketing. From
the year 1956 at least, if not earlier, the company's marketing
organisation was in three divisions, the Soaps Division, the Foods
Division and the Toilet Preparations Division. From 6-9-66 ·the
Company reorganised this marketing organisatioi:i into two divisions, the Main Lines Division and the Speciality Lines Division.
On 30-9-66 the Government of West Bengal referred to the Third
Industrial Tribunal the following question for adjudication :
"Is the human rationlilisation as a measure of economic reorganisation of the Company reflected through
job-integration that have either been effected or proposed to be effected justified ? To what relief, if any,
are the workmen entitled?"
Pending adjudication of this issue seven workers filed applications
under seotion 33A of the Industrial Disputes Act before the same
Tribunal alleging that during the pendency of the adiudication
their service conditions had been changed adversely and their
salary ~or the month of October 1966 had not been paid. The
Tribunal held in favour ol. the workers and passed its award on
23-3-1967. By special leave granted by this Court the employer
has filed the above 7 appeals.
The main reference was finally
disposed of on 11-8-69 by the same Tribunal holding in favour
of the employer and the workers have, therefore, filed Civil Appeal
No. 1759 of 1971 by special leave granted by this Court.
It should be mentioned that the Presiding Officer of the Industrial Tribunal was different in the two cases but the different conclusions arrived at by the two Presiding Officers were not due to
G
the accident of difference in personnel. There was a vast mass
of evidence let in by the employer in the maili refererrce on a
consideration ol which the Tribunal held in favour of the employer.
On the other hand the evidence in the applications, filed
under
section 33A of the Industrial Disputes Act, let in by the employer
was meagre and the Tnbunal came to the conclusion un the
material available before it that the conditions of work of workers
H
had been changed to their prejudice, that. the reorganisation was
likely to lead to retrenchment and that the matter thus fell under
Item 1 O of Schedule IV of the Industrial Disputes Act. The evi-
628
SUPREME COURT REPORTS
[1973] 3 S.C.R.
dence given in the main reference not being part of ti)e evidence
in these 7 cases it is not open to this Court to take it into consideration in deciding these 7 appeals. On an exhaustive consideration of the material in bpth the awards we have come to the conclusion that both the awards should be upheld.
Though the decision in the appeals by the management is
based on the finding .of the Tribunal that the conditions oi work
had been changed to the disadvantage of the workers, and the
decision in the appeal filed by the workers is in effect that the conditions have not been so changed, that is due to the evidence available in the ~o cases. Mr. Tarkunde appearing on behalf of the
workers in the appeal filed by them in C.A. No. 1759 of 1971
in effect invited us to re-assess the evidence in that case.
His
whole point was that the reorganisation effected by the management
in September 1966 was one which attracted items 8, 10 and 11
of the IVth Schedule to the IndU9trial Disputes Act and as such
a notice in accordance with Rule 34 of the West Bengal Industrial
Disputes Rules and Form (E) appended to those rules,
under
section 9A of that Act was necessary. He was at pains to estab'lish this proposition lest it should effect the workers in the others
1 appeals filed by the employer.
This Court in considering a matter under Article 136 does not
ordinarily re-assess the evidence on the basis of which the Tribunal
came to its conclusions. It will interfere with the findings of facts
by the Tribunal only if it is unsupported by any evidence or is
wholly perverse. It will not interfere with findings of the facts
if two views are possible as to the conclusions to be arrived at' on
the ·basis of the evidence even though the conclusions arrived at
by the Tribunal might not commend itself to this Court. Mr.
Tarkunde even indicated that he was not very much interested in
the success of the· appeal of the workers in the sense that he wanted
the scheme oi reorganisation introduced by the employer to be
dropped.
According to him the employer had the right to reorganise his business subject only to his compliance with the provisions of section 9A of the Industrial Disputes Act, which according to him has not been done in this case. He wanted to establish
this proposition only for laying a foundation for the argument that
when after the introduction of the reorganisation by the employer
the workers refused to work except on the basis of the previous
system of working. they were perfectly within their rights and it
was, therefore, illegal for the management to have refused to pay
them their salary and that this was an. alteration of the conditions
of their semce during the
pendency of an adjudication of an
industrial dispute before the Industrial Tribunal. But in the view
we are taking regarding the correctness of the award of the Industrial Tribunal on the applications of the workers under.section 33A
the workers would probably. have no grievance.
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HINDUSTAN LEVER v. R. M. RAY (Alagiriswami, J.)
629
We shall first of all deal with the appeal by the workers. Two
points were raised by Mr. Tarkunde :
1. That it was necessary to give notice under section
9A and wait for 21 days before implementing the
scheme of reorganisation, and
2. as notice was necessary, the scheme cannot be said
to b;e justified when it was implemented.
As regards non-payment of wages, as subsidiary paints, he raised
the questions :
1. the workmen were justified in refusing to
work
under the new scheme, and
2. the non-payment of wages amounted in the circumstances of the case to an alteration in the conditions of service to the prejudice of workers.
These two are really questions which arise in the appeals flied by
the employer and not in this appeal.
According to Mr. Tarkunde
the very fact that three Divisions were sought to be reduced to two
would show that it would increase the workload on the workmen
and result in retrenchment. We do not think that the matter could
be disposed of on such a priority consideration. His grievance also
was that the employer had agreed to. consult the workers but did
not do so.
He also urged that three godowns which previously
existed were reduced to two godowns and that proved a ~eater
burden on the Godown Keeper. He further urged that the Journey
Cycles, i.e. the period during which salesmen were expected to
be on tour contacting the various dealers were increased from
4 weeks to 6t weeks and that this also proved a greater burden
on the salesmen. He urged that the Sabb.a had a reasonable apprehension that there will be retrenchment if the 6t week cycles were
introduced.
Bui he conceded that this was avoided in
actual
working.
As already mentioned earlier, he contended that the
Sabha has now no objection to the present arrangement but the
employer contends that conditions are very unstable and they now
have 3 and even 4 divisions. According to him the reorganisation
is either a change in usage falling under item 8 of IVth Schedule
to the Act or rationalisation falling under item 10 or incr~ase or
reduction in the number of persons employ~d in any department
net o.:casioned by circumstances over which the employer has no
control falling under item 11.
According to him the workers
having been accustomed to working under 3 divisions, reorganisation into 2 divisions amounted to a change in usage.
He also urged that rationalisation and standardisation per se
would fall under item 10 even if they were not likely to lead to
retrenchment of workmen and only improvement of plant or
technique would require that they should lead to retrenchment of
8-l 761Sup.C.I./73
•
630
SUPREME COURT REPORTS
[1973) 3 S.C.R.
workmen in order to fall under item 10. A further submission of
his i.vas that standardisation merely meant standardisation of wages.
We are not able to accept this argument. It appears to us that
the arrangement of words and phrases in that item shows that only
rationalisation or standardisa'tion or improvement of
plant or
technique, which is likely to lead to retrenchment of workmen
would fall under that item. In other words,
rationalisation or
standardisation by itself would not fall under item 10 unless it is
likely to lead to retrenchment of workmen. The reference to
rationalisation at page 257 of the report of the Labour Commission and the reference to standardisation of wages in it are not
very helpful in this connection.
Standa~disation can be of anything, not necessarily of wages.
It may be standardisation of
workload, standardisation of product, standardisation of working
hours or standardisation of leave privileges. Indeed in one deci ·
sion in Alembic Chemical Works Co. Ltd. v. The Workmen(')
there is reference to standardisation of conditions of service, standard\sation of hours of work, wage structure. That case itself was
concerned with standardisation of leave. The whole question
whether this reorganisation falls under item 10 depends
upon
whether it was likely to lead to retrenchment of workmen.
On
this question, as already indicated, the two Tribunals have arrived
at two different conclusions. But as already indicated, it depended
upon the evidence in each case.
It is not disputed that the reorganisation has not resulted in any retrenchment. Moreover, during
the o;;0urse of rather prolonged negotiations between the parties
the employer made it abundantly clear again and again that no
body would be retrenched.
It was clearly made part and parcel
of the scheme of reorganisation.
Hindustan Lever Ltd. being a
large organisation covering the whole of the country there was no
difficulty abOut giving effect to 1this reorganisation scheme without
retrenching anybody. It was, however, urged on behaY of the
workers that there have been a numi,er of voluntarily induced
retirements and that many posts were not filled after the holders
of these posts had retired or left. We are of opinion that the retrenchment contemplated under Hem 10 is retrenchment as defined
in clause ( oo) of section 2 where it is defined as the termination
by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include voluntary retirement of the
workman.
The workers cannot, therefore. make a grievance of
the voluntary retirement and non-tilling of vacancies and try to
bring it under item 10.
As regards item 11 it was urged that as one department out
of three has been abolished, ithis item applies. Though to bring
the matter under this item the workmen are not required to show
!I) [1961] 3 S.C.R. 297.
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HINDUSTAN LEVER v. R. M. RAY (Alagiriswami, /.)
631
that there is increase in the workload, it must be remembered that
the 4th Schedule relates to conditions of service for change
of
which .notice is to be given and section 9A requires the employer
'to give notice under that section to the workmen likely to be
affected by slich change. The word 'affected' in the circumstances
could only refer to the workers being adversely effected and unless
it could be shown that the abolition of one department has adversely affected the workers it cannot be brought under item 11. The
same consideration applies to the question of change in usage under
item 8. Let us, therefore, see what was the scheme of reorganisation to which the workers took exception.
There can be no dispute that the employer has got the right
to organise his work in the manner he pleases as w:is held in
Parry & Company's(') case.
As we have pointed out earlier
there was extensive and prolonged consultation between the parties.
The real grievance of the workers seems to be that the reorganisation of the working did not have their approval.
Before the
Tribunal the objection ol the S;abha to the Company's scheme of
reorganisation was that it ~as a condition of service_ of every employee to work for only one division at a time after amalgamation
af the three companies and for only one company prior to amal-
'gamation. But the conditions in the levters of appointment of every
worker in the company show the contrary.
The Tribunal also
found that the Salesmen of the company did in fact handle products
of more 1han one division a.t..a time in the course of joint selling
operation since 1960. It was admitted that they also did it in the
course of integrated selling in Assam since 1964 but that is said
to be tecause that was done on an experimental basis. It was admitted that there are many employees in different departments of
the company who by virtue of their jobs cannot be attached to any
one division. The Tribunal, therefore, held on the basis of oral
as well as documentary evidence that the contention of the workers
that it Wlls a ·condition of service of every .employee to work for only
one division at a time was not established. It Is in evidence that
the company on occasions transferred products from one group
to the other group to meet the business exigencies of the company.
After referring to such instances the Tribunal has held tha!I in certain cases a system of joint selling of products of the three divisions
by the same salesmen through Sales Vans in several markets in
India was adopted. According to the employer if the three divisional set up had been continued, it would have adversely affected
the business of the company and kept a large number of salesmen
of the Foods Division only partly occupied and the company could
have had no option but to retrench some number of salesmen work-
(I) [1970] I.L.L.l. 429.
632
SUPREME COURT REPORTS
[1973] 3 S.C.R.
ing in the Foods Division. It, itherefore, effected the reorganisation
to meet the challenge of. change in marketing conditions.
The scheme of reorganisation in this case was : Firstly, as a
result of the regrouping of the products from the three divisions
into two lines, the sales management staff of the company was
redeployed on a geographical basis instead of product group basis.
Secondly, the employer reorganised its trade outlets so that ReDistritution Stockists would handle all the products of the company rather than the products of any particular division. Thirdly.
the entire sales force was redeployed over two products groups,
i.e. Main Lines and Speciality Lines. The Tribunal following the
decision of this Court in Parry & Co. case held that the employer
has the right to decide the staff complement and to fill only such
jobs as continued to exist and not automatically replace every
individual. The Tribunal has gone elaborately into the question
of workload and come to the conclusion that there is no increase
in the workload.
We have already referred to the question of
journey cycles. We see no reason to differ from the finding of the
Tribunal that there has been no change in usage adversely effecting
the worker. and that as there has been no retrenchment item 10 of
Schedule IV is not attracted nor is item 11.
It is hardly necessary to refer to the various decisions which
were cited before us as to what would constitute conditions of
service the change of which would require notice under section
9A of the Act. In Dharangadhara Chemical Works Ltd. v. Kantu
Kalu & Ors. ( 1) the Labour Appell:rte Tribunal of India held that
the increase in the weight of bags to be carried from 1 cwt to 1 t
cwt was a change in !he workload and the com11any was bound
•to pay wages as the workmen were willing to work ~t did nJt
work on account of the unreasonable attitude adopted by the
management. In Chandramalai Estate v. Its Workmen(') the
payment of Cumbly allowance was held to have become a condition of service . In The Graham Trading Co. (India) Ltd. v. Its
Workmen(") it was held that the workmen were not entitled to
Puja bonus as an implied term of employm~nt. In Workmen of
Hindustan Shipyard Ltd. v. l.T.(') in the matter of withdrawal
of concession of coming late by half an hour (than the usual hour),
it was held that the finding of the Industrial Tribunal that section
9A did not apply to the case did not call for interference. But the
decislan proceeded on 1he basis that the Court will not interfere
in its jurisdiction unless there was any manifest injustice. In
McLeod & Co. v. Tis Workmen(') the provision for' tiffin was
held to be an amenity to which the employees were entitled, and
(l) [1955] I L.L.J. 316.
(3) [1960] I S.C.R. 107,
(5) !1964] I L.L.J. 386.
(2) [1960] 2 L.L.J. 243.
(4) [1961] 2 L.LJ. 526.
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the provision of cash allowance in lieu of free tiffin directed to be
made by the industrial tribunal could not be considered to be
erroneous in law. In India Overseas Bank v. Their Workmen(')
"key allowance " was treated as a term and condition of service.
In Indian Oxygen Limited v. Udaynath Singh(') withdrawal by
the management of the supply of one empty drum at a time at
reasonable intervals was held not to contravene section 9A and
33. In Oil & Natural Gas Commission v.
Their Workmen(')
where there was nothing to show that it was a condition of service
that a workman should work for 6t hours only, no notice of change
was held to be required under section 9 A for fixing the hours of
work at eight. In Tata Iron & Steel Co. v. Workmen(') change
in weekly days of rest from Sunday to some other day was held
to require notice. A close scrutiny of 1the various decisions would
show 'that whether any particular practice or allowance or concession had become a condition of service would always depend
upon the facts and circumstances of each case and no rule applicable to all cases could be culled out from these decisions. In the
face of the elaborate consideration of the evidence and findings
made by the Tribunal we are unable to hold th3'1: there has been
any change in the terms and conditions of service of the workers
in this case to their detriment. It follows, therefore, that section
9A is not attracted. It is,. therefore, unnecessary to consider the
question whether the argument advanced by Shri Gupte on b~half
of the employer that in view of ithe very prolonged and detailed
discussions that went on between the parties there was a substantial
compliance with provisions of section 9A and othe mere faot that
a formal notice was not given under section 9A would not make
the reorganisation scheme not valid.
In the applications filed by the workers the Tribunal was c0nscious of the employer's right to reorganise his business in any
fashion he likes for purposes of economy or convenience and that
no body is. entitled to tell him how he should conduct his business.
But it was of the opinion that this right of 1he employer is subject
to the limitations contained in section 9A. It specifically considered the applicabfili1y of item 10 of the Fourth Schedule to the
Act and relying upon the decision in
North Brooke Jute Co.
Ltd. (1) held that no schenie of rationalisation could be given
effect to if it was not preceded by a notice under section 9A. ·It
did not c<msider it necessary to give a final decision regarding the
legality or otherwise of the scheme introduced by the company.
But it considered .whether the workers' refusal to work under the
new scheme was justified. On the evidence it held tha't the Union
had the apprehension that the proposed
reorganisation
would
(I) (1967-68) (33) F.J.R. 457.
(3) (1972) 42 F.J.R. 551.
(5) [1960) 3 S.C.R. 364.
(2) [1970) 2 L.L.J. 413.
(4) A.l.R. 1972S.C.1917.
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SUPREME COURT REPORTS
(1973] 3 s,c.&.
result in some members of the staff becoming surplus, and that
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this apprehension was not without justification, and that the apprehension became true when the reorganisation was actually introduced.
It also held that the workload of the various applicants
increased as a result of the reorganisation.
It, therefore, held that
worke.rs were within their legitimate right to refuse ti:> do the work
under the new scheme as no notice has been given under item 9A.
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It held that however laudable the object of the reorganisation may
be, it cannot be doubted for a moment on the evidence on record
that the scheme has seriously prejudiced the workers. It, therefore,
directed the employer to pay all the workers their wages for October
1966.
Mr. Gupte appearing for the employer contended relying on the
decision in the case of North Brook Jute Co, Ltd. v. Their Workmen (supra) that the 1.1lteration .of the conditions of service in •this
case, even 1f it should be held that non-payment of wages amounted
to alte.ration of conditions of service, was made not when a reference under section 10 was pending but that •the reference itself
having been made after the reoganisation, no application could
be made under section 33A. Technically no doubt this contention
is correct because the scheme was introduced on the 5th or 6th
of September and the reference was made on 30th of S~ptcmber.
But the applications in this case were not for the wages due for
the month of September but for October. The applications proceeded on the basis that the non-payment of wages was an alteration in the conditions of service, and it is to that question that we
must first address ourselves. Mr. Gupte contended that non-payment of wages is not an alteration of conditions of service and that
no applicirtion under section 33A could be made in such cases
as the remedy available was under section 33C. We are not able
to appreciate &is argument. Indeed payment of wages is one of
the most important among the workers' conditions of service. The
worker works essentially only for the wages to be paid to him.
Therefore, the question that would really have to be answered is
whether the refusal of the worker to work was justified or not.
It is in evidence that the workers presented themselves for work
every day and offered to work according to the old scheme but
that they were not given any work according to the old scheme
They were told that as long as they refused to work under the new
scheme they would be paid no wages. The refusal to pay, there~
fore, was not a solitary instance in respect of which an application
could have been made under section 33t:. It was a continued rec
fusal.
It was, lherefore, a permanent alteration of the conditions
of service. The cause of action, so to say, arises de die in diem.
If the refusal of the workers to work under the rorganisation
scheme is justified then the refusal of the management to pay
unless they worked under the reorganisation scheme would amourn
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HINDUSTAN LEVER v. R. M. RAY (Alagiriswami, J.)
635
to alteration of the conditions of service oi workers. If on the
other hand the workers were not justified in doing so then no
other question arises. But in the face Of the findin)l of the Tribuanl
that the reorganisation scheme rendered some workers surplus
and that the scheme had seriously prejudiced the workers, and
that the apprehension of the workers that the reorganisation would
result in some member of. the staff becoming surplus came true, it
cannot be said that the failure of the employer IO give notice under
section 9A and introducing the scheme of reorganisation without
such notice is ju~tified. It means that the workers were justified
in rofusing to work under the new scheme.
It follows that the
refusal to pay their wages amounted to alteration of conditioJ:!s of
service and the applications were, therefore, rightly made under
section 33A.
Even apart from thllt it was urged by Mr. Gup,te relying upon
the decision in National Coal Co. v. L. P. Dave( ) that non-payment of wages was neither an alteration in the conditions of service
nor is it a punisluflent and as such ca:nnot come within the mischief of section 33 of the Act. The Patna High Court relied also
for its decision on the decision in Shama Biicuit Co. v.
Their
Workmen(').
The facts of that case are not quite clear.
The
Court gives no reason tor its view that the non-payment of wages
is not an alteration of conditions of serv.ice· applicable to workmen
and that it was only a case of default of payment of wages on the
pay day falling under Payment of Wages Act.
The facts there
were in any case different from the facts of the present case. We
may refer to. the decision of the Allahabad High Court in Ram
Nath Koeri v.Lakshmi Devi Sugar Mills. & Ors.(') where it wa&
observed that the payment of wages is one of the essential ingredients of the contract of employment and that the word 'conditions' includes the idea conveyed by the word 'terms' but goes beyond it and is not confined to what is included in that word. The
Court also held that 'terms and conditions of employment' is wider
in scope than the expression 'terms and ·conditions ·of labour'.
But as we have already observed failure or refusal to pay wages
for a certain period may necessitate proceeding under section 33C,
but refusal to pay wages indefinitely on the refusal of the workers
to work according to a scheme of reorganisation which was not
a valid one, because of the failure to give notice under section 9A,
cannot but be considered to be an altera1ion in the conditions of
service of the workers.
Mr. Gupte complained that the Tribunal has not decided the
question whether the reorganisation was justified.
He also contended that the applications by the workers as well as the reference
(1) A.LR. 1956 Patna 294.
(3) [1956] 2 L.L.J. II.
(2) [1952] 2 L.L.J. 353.
636
SUPREME COURT REPORTS
[1973] 3 S.C.R.
made by the company should have been heard together and should
not have been disposed of separately. That is really the main complaint of die employer. As we have pointed out earlier if all the
evidence which was Jet in in the reference were available to th~
Tribunal which decided the applications of the workers, the result
might well have been different. But we do nO't consider that the
Tribunal was wrong in having proceeded to dispose of the matter
in the way it did. Mr. Tarkunde rightly contended that even if an
application had been made under section 33C, the whole scheme
would have to be considered and i<t is not fair at this distance of
time to drive the workers to file applications under section 33C,
the procedure for which would be the same as under section 33A,
merely on the ground that the introduction of the scheme had taken
place before the reference to adjudication was made. We consider
that as an application under section 33A has to be decided as if
it were a reference under section I 0, the fact that the scheme had
been introduced earlier than the reference to arbitration
under
section 10, does not bar• an application under section 33A in the
circumsitances we have explained.
We thus come to the conclusion (I) that non-payment of
wages in the circumstances of this case amounts to an alter11:tion
in the conditions of service, (2) the fact that the scheme was
ill'troduced before the reference under section I 0 was made does
not bar an application under section 33A, and (~) that the Tribmal was .iustified in coming to the conclusion that this alter&tion
in the conditions of service could not have been made without
notice under section 9A.
The result is 1hat all the appeals are dismissed. There will be
no order as to costs.
V.P.S.
Appeals dismissed.
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