# SALEM ERODE ELECTRICITY DISTRIBUTION COMPANY LTD v. SALEM ERODE ELECTRICITY DISTRIBUTION CO. LTD. EMPLOYEES UNION

- **Citation:** [1966] 2 S.C.R. 498
- **Court:** Supreme Court of India
- **Decided:** 1965-11-03
- **Case number:** C.A. No. 305 of 1964
- **Bench:** P. B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah, V. Ramaswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/salem-erode-electricity-distribution-company-ltd-v-salem-erode-electricity-3603
- **Pages:** 13

## Headnote

A
B
Industrial Employment (Standing Orders) Act, 1946-Application for
amendment of certified Standing Order$-Proposed amendments applying
C
different rules to existing and new employees-Whether fair and reasonable
-Whether certifying officer has power in law to refuse amendment.
The appellant company, which carried on the business of buying bulk
electrical energy and distributing it to consumers, made an application
under the Industrial Employment (Standing Orders) Act, 1946, to the
Certifying Officer, Madras, for an amendment of two of its certified
Standing Orders relating to holidays and leave.
It was claim~d by the D
appellant that the urgent need for increased production and for increased
supply of electrical energy could be met if the existing rules embodied
in the two standing orders were suitably amended; the amendments pr<>-
posed sought to introduce different rules relating to holidays and leave
for employees who were appointed before a specified date and those who
joined service after that date.
The proposed amendments were resisted by the respondents' union on
E
the ground, inter a/ia, that they would introduce discrimination betwcco
one set of employees and another resulting in industrial unrest and disharmony. The Certifying Officer upheld the respondents' plea and negatived the amendments.
An appeal to the appellate authority against this
decision was dismissed.
It was contended on behalf of the appellant that the proposed amendments11 werethfair1
anhd dreasonedable1
and_ thatt the tCertf
. ifyi1'hng SOtfficder an0ddthe
F
appe ate au on y a err
m aw m no cer 1 ymg
e
an mg · r ers
as proposed to. be amended.
HELD : (i) The Certifying Officer and the appellate authority committed no error of law in refusing to certify the modified Standing
Orders. [510 E]
The Act prmides a self-contained code and the Certifying Officer is
given the power to consider questions of fairness and reasonableness as
G
well as other questions indicated by s. 4(a) and (b).
An appeal is
provided against tlte decision of the Certifying Officer and in case a
dispute arises as to the interpretation or the application of the Standing
Order, a remedy is provided in s. 13A.
A right is given both to the
employer and the workman to move the appropriate authorities for modi·
fication of the existing Standing Orders. [505 G-H]
(ii) It is clear from the provisions of the Act requiring industrial
establishments to have their Standing Orders certified that matters specifted
H
in the Schedule to the Act should be covered by uniform Standing Orders
<:
applicable to all workmen employed in an industrial establishment.
[SOS
BJ
'
·'
..
•
A
B
SALEM m;.ECTRICITY v. EMPLOYEES ( Gajendragadkar, C.l.) 4 9 9
Rai Bahadur Diwan Badri Das v. The Industrial Tribunal, Punjab;
(1963] 3 S.C.R. 930; Associated Cement Staff Union v. Associated Cement
Co. & Ors. (1964) I L.L.J. 12; Guest Keen Williams Private Ltd. v. F. l.
Sterling and others : [1960] 1 S.C.R. 348; referred to.

## Text

SALEM ERODE ELECTRICITY DISTRIBUTION
COMPANY LTD.
v.
SALEM ERODE ELECTRICITY DISTRIBUTION
CO. LTD. EMPLOYEES UNION
November 3, 1965
[P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO,
M. HIDAYATULLAH AND V. RAMASWAMI, JJ.J
A
B
Industrial Employment (Standing Orders) Act, 1946-Application for
amendment of certified Standing Order$-Proposed amendments applying
C
different rules to existing and new employees-Whether fair and reasonable
-Whether certifying officer has power in law to refuse amendment.
The appellant company, which carried on the business of buying bulk
electrical energy and distributing it to consumers, made an application
under the Industrial Employment (Standing Orders) Act, 1946, to the
Certifying Officer, Madras, for an amendment of two of its certified
Standing Orders relating to holidays and leave.
It was claim~d by the D
appellant that the urgent need for increased production and for increased
supply of electrical energy could be met if the existing rules embodied
in the two standing orders were suitably amended; the amendments pr<>-
posed sought to introduce different rules relating to holidays and leave
for employees who were appointed before a specified date and those who
joined service after that date.
The proposed amendments were resisted by the respondents' union on
E
the ground, inter a/ia, that they would introduce discrimination betwcco
one set of employees and another resulting in industrial unrest and disharmony. The Certifying Officer upheld the respondents' plea and negatived the amendments.
An appeal to the appellate authority against this
decision was dismissed.
It was contended on behalf of the appellant that the proposed amendments11 werethfair1
anhd dreasonedable1
and_ thatt the tCertf
. ifyi1'hng SOtfficder an0ddthe
F
appe ate au on y a err
m aw m no cer 1 ymg
e
an mg · r ers
as proposed to. be amended.
HELD : (i) The Certifying Officer and the appellate authority committed no error of law in refusing to certify the modified Standing
Orders. [510 E]
The Act prmides a self-contained code and the Certifying Officer is
given the power to consider questions of fairness and reasonableness as
G
well as other questions indicated by s. 4(a) and (b).
An appeal is
provided against tlte decision of the Certifying Officer and in case a
dispute arises as to the interpretation or the application of the Standing
Order, a remedy is provided in s. 13A.
A right is given both to the
employer and the workman to move the appropriate authorities for modi·
fication of the existing Standing Orders. [505 G-H]
(ii) It is clear from the provisions of the Act requiring industrial
establishments to have their Standing Orders certified that matters specifted
H
in the Schedule to the Act should be covered by uniform Standing Orders
<:
applicable to all workmen employed in an industrial establishment.
[SOS
BJ
'
·'
..
•
A
B
SALEM m;.ECTRICITY v. EMPLOYEES ( Gajendragadkar, C.l.) 4 9 9
Rai Bahadur Diwan Badri Das v. The Industrial Tribunal, Punjab;
(1963] 3 S.C.R. 930; Associated Cement Staff Union v. Associated Cement
Co. & Ors. (1964) I L.L.J. 12; Guest Keen Williams Private Ltd. v. F. l.
Sterling and others : [1960] 1 S.C.R. 348; referred to.
CIVIL APPELLATE JURISDICTION : C.A. No. 305 of 1964.
Appeal by Special Leave from the order dated the 9th April,
1963 of the Labour Court, Coimbatore, in C.S.O. Appeal No. 1
of 1962.
M. C. Setalvad, and Naunit Lal, for the appellant.
M. K. Ramamurthi, R. K. Garg, D. P. Singh and S. C. AgarC
wa/a, for the respondents.
The Judgment of the Court was delivered by
Gajendragadkar, C.J.
The appellant, Salem Erode Electricity
Distribution Co., Ltd., is a licensee under the Indian Electricity
Act,. 1910, and its business consists in buying electrical energy
D in bulk from the State Electricity Board of Madras and selling
it to consumers in Salem and Erode and certain rural districts in
the State of Madras.
For the purpose of carrying on. this business, the appellant has an industrial establishment at Salem.
In or about 1940, when the number of the appellant's conE sumers was about 3,000, and that of its workmen about 45, the
appellant framed certain terms and conditions of its workmen's
employment.
Amongst these were included terms about leave
and holidays. Later, when the Industrial Employment (Standing
Orders) Act, 1946 (No. 20 of 1946) (hereinafter called 'the
Act') came into force, the provisions as to leave
and holidays
F
which had been introduced by the appellant in the terms and
conditions of the employment of its workmen, were embodied in .
the appellant's Standing Orders whlch were certified under tho
relevant provisions of the Act in or about 194 7. The said terms
read thus:-
G
H
"Standing Order 5 ( b)
The number of holidays to be granted to the workmen and the days whlch shall be observed as holidays
by the Establishment shall be regulated in accordance
with the Factories Act, 1948 or other relevant law for
time being in force and the custom or usage of the
Establishment, viz., holidays under the Negotiable Instruments Act, 1881 and festival holidays peculiar to this
locality which are being given.
500
SUPREME COURT REPORTS
[1966] 2 S.C.R.
Standing Order lO(a) :
Leave will be given in accordance with the law and
existing practice provided the leave facilities now available to the workers are not curtailed in any manner".
The proceedings which have given rise to the present appeal
A
by special leave between the appellant and the respondents, its
B
employees, began with the application made by the appellant on
the 6th October, 1960, before the Certifying Officer, Madras, for
~
the amendment of the certified Standing Orders to which we have
just referred.
By its application, the management of the appellant wanted the said Orders to read thus :-
"Standing Order 5 ( b) :
For all workmen who have joined service prior to
.... holidays under the Negotiable Instruments Act,
1881, and festival holidays of one day per year which
day may be chosen by the workmen shall be given. For
all workmen who have joined on and after ....... .
holidays under the Madras Industrial Establishments
(National and Festival holidays) Act, 1958 shall be
given."
"Standing prder IO(a) :
Leave will be given to all employees who are
appointed on and after .... in accordance with the provisions of the Madras Shops and Establishment Act,
194 7 or any statutory modification thereof (irrespective
of whether this Act applies or not to any category of
employee or employees).
Provided, however, that for
all employees who have been confirmed prior to the
above said date, viz .. ....... the leave facilities now
available are not curtailed in any manner''.
c
E
F
It is relevant to mention the background of the present application.
The appellant believed that the urgent need for increased
production and for increased supply of electrical energy could be
G
met if the existing rules embodied in Standing Orders 5 (b) and
IO(a) were suitably modified; and so, the appellant wanted to
make the change in the said two Standing Orders on the lines
indicated by it in its application to the Certifying Officer.
It
appears that these Rules were introduced by the appellant on the
!st October, 1960, and were embodied in the contracts of service
H
of new entrants who joined the appellant's employment as from
that date. In fact, they were agreed to by such new entrants.
•
_ ...
,
•
SALEM ELECTRICITY v. EMPLOYEES ( Gajendragadkar, C.J.) 501
A In order to regularise the steps taken by the appellant by revising
the relevant Rules in respect of the new entrants to its employment, the appellant made the present application.
The change proposed to be made by the appellant in the two
Standing Orders in question was resisted by the respondents'
B Union. It was urged by the respondents that the proposed change
was unfair and unreasonable, and it was also argued that it would
introduce discrimination between one set of employees and another
working under the same employer, and that would naturally cause
industrial unrest and disharmony.
The Certifying Officer upheld
the pleas raised by the respondents and he accordingly directed
c that the proposed amendments should be negatived.
The appellant then preferred an appeal against the said order
before the appellate authority.
Both the parties urged similar
contentions before the appellate authority and the said authority
agreed with the view taken by the Certifying Officer and dismissed
the appeal preferred by the appellant.
It is against this order
D that the appellant has come to this Court by special leave.
On behalf of the appellant, Mr. Setalvad has urged that the
change which the appellant wants to make in the two relevant
orders is, on the merits, fair and reasonable; and he adds that
the appellant wanted to prove its bona fides by making the changed
E Standing Orders applicable to the future entrants and not extending them to its employees who were already in its employment and
who are governed by the existing Standing Orders.
According
to Mr. Setalvad, the Certifying Officer and the appellate authority have erred in law in not certifying the changed Standing
Orders as proposed by the appellani.
F
In dealing with this point, it is necessary to examine the broad
features of the Act and consider its main purpose and object.
The Act was passed in 1946 and its main object was to require
the employers in industrial establishments to which the Act applied,
to define formally the terms and conditions of employment in their
resnective establishments.
In imposing
this obligation on the
G employers, the Act intended that the terms and conditions of industrial employment should be well-defined and should be known to
the employees before they accepted the employment. As we will
presently point out, one of the objects of the Act was to introduce
uniformity of terms and conditions of employment in respect of
workmen belonging to the same category and discharging the
H same or similar work under an industrial establishment.
Before
the Act was passed, employees in many industrial establishments
were governed by oral terms and conditions of service which
M3Sup.CJ/66-2
'
502
SUPREME
COURT
REPORTS
(1966] 2 S.C.R.
were not uniform and which had been entered into on an ad hoc A
basis.
The Act now requires that terms and conditions of employment in relation to matters specified in the Schedule must be
included in the Standing Orders and they must be certified. It
would at once be clear that by the operation of the Act, all industrial establishments will have to frame tenns and conditions of
service in regard to all the matters specified in the Schedule, and
B
that naturally would introduce an element of uniformity inasmuch
as industrial employment in all establishments to which the Act
applied would, after the Act was passed, be governed by tenns
and conditions of service in respect of matters which are common
to all of them. That, in brief, is the object which the Act intends
to achieve.
C
Let us now see the scheme of the Act.
"Standing Orders"
are defined by s. 2(g) as meaning rules relating to matters set
out in the Schedule; these matters are 11 in number, and the
last one of them refers to any other matter which may be pres-·
cribed "Prescribed" according to s. 2 ( f) means prescribed by
D
rules made by the appropriate Government under this Act; and
so, Standing Orders mean rules made in relation to the matters
enumerated in clauses 1 to 10 in the Schedule as well as any other
matter which may in future be added by means of rules to be
made by the appropriate Government.
This gives a general idea
E
about the matters which are intended to be covered by the Standing Orders.
Section 3 of the Act requires the submission of draft Standing Orders by the employer within six months from the date on
which the Act becomes applicable to an industrial establishment.
A statutory obligation has been imposed upon the employer to
F
take necessary action as required by s. 3 ( 1). Section 4 requires
that the Standing Orders must deal with every matter set out in
the Schedule which is applicable to the industrial establishment,
and must be in conformity with the provisions of the Act.
Section
5 deals with the proceedings for certification of the standing
orders by the Certifying Officer. Section 6 provides for appeals G
against the orders passed by the Certifying Officer Section 7
prescribes the date on which the certified standing orders will
come into operation.
Section 10(2) provides for the modification of the standing orders. Section l 3A provides for the machi-
•
nery to deal with questions in relation to the application or interH
pretation of the standing orders certified under the Act; and s. 15
confers powers on the appropriate Government to make rules to
carry out the purposes of the Act.
•
SALEM ELECTRICITY v. EMPLOYEES (Gajendragadkar, C.J.) 503
A
When the Act was originally passed, the powers of the Certifying Officer as well as those of the appellate anthority were
limited to consider the question as to whether the standing orders
submitted for certification were in accordance with the Act or not.
By an amendment made in 1956, jurisdiction has been conferred
on the Certifying Officer as well as the appellate authority to
B adjudicate upon the fairness or reasonableness of the provisions
of the Standing Orders submitted for certification. That means
the jurisdiction of the appropriate authorities functioning under
the Act has now been widened and they are required to consider
whether the Standing Orders submitted to them for their approval
are fair or reasonable.
Parties can make their contentions in
C respect of the fairness or reasonableness of the proposed Standing
Orders, and the appropriate authorities will adjudicate upon the
said contentions. That is one change made in 1956.
The other change made in the original provisions of the Act
whlch is relevant for our purpose is in regard to the provisions
D contained ins. 10(2). Under the original provision of s. 10(2),
it was only the employer who was authorised to make au application to the Certifying Officer to have the Standing Orders
modified.
By the amendment made in 1956, even workmen are
now entitled to apply for the modification of the Standing Orders.
The result of this amendment is that if workmen are dissatisfied
E with the operation of the existing Standing Orders, they can move
for their modification by applying to the Certifying Officer in that
behalf. Before this amendment was made, the only course open
to the workmen to adopt for securing any modification in the
existing Standing Orders was to raise an industrial dispute and
move the appropriate government to refer the said dispute to the
F
adjudication of the appropriate Industrial Tribunal.
Both these
amendments have been introduced by Act No. 36 of 1956.
Now, the question which we have to decide is : is it permissible for an industrial establishment to have two sets of Standincr "
Orders to govern the relevant terms and conditions of its emploG yees ? Mr. Setalvad argues that if the change is intended to be
made in the existing Standing Orders, it should be permissible
and indeed legitimate for an employer to seek for the change on
the ground that the said change would be reasonable and fair,
provided the existing rights of employees already employed are
/
H. not affected by such change. Prima facie, this argument appears
to be attractive; but if we examine the scheme of the relevant
provisions of the Act in the light of the matters specified in the
Schedule in respect of which Standing Orders are required to b"
504
SUPREME COURT
REPORTS
[1966] 2 $.C.R.
made, it appears that two sets of Standing Orders cannot be made
A
under the Act.
Let us first examine the matters specified in the Schedule.
They are specified under els. (1) to ( 11). The first is in regard
to classification of workmen.
The second is in relation to the
manner of intimating to workmen periods and hours of work,
B
holidays, pay-days and wage rates.
The third has reference to
shift working; the fourth to attendance and late coming. Clause
( 5) relates to conditions of, procedure in applying for, and the
authority which may grant, leave and holidays. Clause ( 6) deals
with the requirement to enter premises by certain gates, and
liability to search. Clause ( 7) is concerned with the closing and c
reopening of sections of the industrial establishment, and temporary stoppages of work and the rights and liabilities of the employer and workmen arising therefrom.
Clause ( 8) deals with the
termination of employment, and the notice thereof to be given by
employer and workmen.
Clause ( 9) covers the subject of suspension or dismissal for misconduct, and acts or omissions which
D
constitute misconduct.
Clause ( 10) relates to means of redress
for workmen against unfair treatment or wrongful exactions by
the employer or his agents or servants. Clause ( 11) is the residuary clause which refers to any other matter which may be
prescribed.
One has merely to examine these clauses one by one to be
E
satisfied that there is no scope for having two separate Standing
Orders in respect to any one of them. Take the case of classification of workmen.
It is inconceivable that there can be two separate Standing Orders in respect of this matter.
What we have
said about classification is equally true about each one of the other F
said clauses; and so, the conclusion appears to be irresistible that
the object of the Act is to certify Standing Orders in respect of the
matters covered by the Schedule; and having regard
to these
matters, Standing Orders so certified would be uniform and would
apply to all workmen alike who are employed in any industrial
establishment.
G
Prior to the enactment of the Act, industrial establishments
used to employ workmen on different terms and conditions of
service and they used to enter into separate agreements with employees on an ad hoc basis.
It was precisely with the object of
avoiding this anomalous position that the Act has been passed
and an obligation has been imposed upon the industrial establishH
ments to have their Standing Orders certified by the appropriate
authorities.
Therefore, we do not think Mr. Setalvad is right in
•
.
SALEM ELECTRICITY v. EMPLOYEES ( Gajendragadkar, c .T.) 5 c 5
A contending that it is open to an industrial establishment to have
two sets of Standing Orders certified in relation to leave and
•
holidays provided that the modified Standing Orders apply to
future entrants and the existing Standing Orders apply to entrants
who are already in the employment of the establishment.
B
On principle, it seems expedient and desirable that matters
specified in the Schedule to the Act should be covered by uniform
Standing Orders applicable to all workmen employed in an industrial establishment.
It is not difficult to imagine how the application of two sets of Standing Orders in respect of the said matters
is bound to lead to confusion in the working of the establishment
c and cause dissatisfaction amongst the employees. If Mr. Setalvad
is right in contending that the Standing Orders in relation to these
matters can be changed from time to time, it may lead to the
anomalous result that in course of 10 or 15 years there may come
into existence 3 or 4 different sets of Standing Orders applicable
to the employees in the same industrial establishment, the appliD cation of the Standing Orders depending upon the date of employment of the respective employees. That, we think, is not intended
by the provisions of the Act.
Once the Standing Orders are made, it is not unlikely that disputes may arise between the employer and the employees in regard
E to their application or their interpretation, and the Act has specifically made a provision for dealing with problems of this kind.
As we have already indicated, section 13A provides that i~ any
question arises as to the application or interpretation of a Standing
Order certified under the Act, an employer or a workman may
refer the question to any one of the Labour Courts indicated by
F the section, and the said Labour Court shall, after giving the
parties an opportunity of being heard, decide the question and
such decision be final and binding on the parties.
The result, therefore, appears to be that in regard to the certification of the Standing Orders, the Act provides for a self,contained Code. The Certifying Officer is given the power to
G consider questions of fairness and reasonableness as well as the
other questions indicated by s. 4(a) and (b).
An appeal is
provided against the decision of the Certifying Officer and in case
a dispute arises as to the interpretation or the application of the
Standing Order, a remedy is provided by s. 13A.
Besides, as
we have already pointed out, a right is given both to the employer
H
and the workmen to move the appropriate authorities for modification of the existing Standing Orders. That is why we do not
think that Mr. Setalvad is right in contending that the Certifying
~.
JL;·~
506
SUPREME COURT REPORTS
[1966] 2 S.C.R.
Officer as well as the appellate authority erred in law in refusing
A
to certify the modified Standing Orders submitted by the appellant
for certification.
It may be that even in regard to matters covered by certified
Standing Orders, industrial disputes may arise between the employer and his employees, and a question may then fall to be conB
sidered whether such disputes can be referred to the Industrial
Tribunal for its adjudication under section 10( 1) of the Industrial
Disputes Act.
In other words, where an industrial dispute arises
in respect of such matters, it may become necessary to consider
whether, notwithstanding the self-contained provisions of the Act,
it would not still be open to the appropriate Government to refer
C
such a dispute for adjudication.
We wish to make it clear that
our decision in the present appeal has no relation to that question.
In the present appeal, the only point which we are deciding is
whether under the scheme of the Act, it is permissible to the employer to require the appropriate authorities under the Act to
certify two different sets of Standing Orders in regard to any of D
the matters covered by the Schedule.
It now remains to consider the three decisions to which
Mr. Setalvad has invited our attention.
In Rai Bahadur Diwan
Badri Das v. The Industrial Tribunal, Punjab('), this Court had
to consider the question as to whether the Tribunal against whose
E
award an appeal had been brought to this Court by the appellant
Rai Bahadur Diwan Badri Das was in error in refusing to allow
the appellant's prayer that he should be permitted to introduce
a new rule in respect of leave with wages applicable to the entrants
in his employment after the 1st of July, 1956. It appears that
on the said date, th.e appellant made a rule that every workman
F
employed on or before that date would be entitled to 30 days
leave with wages after working for 11 months and workmen
employed after that date would be entitled to earned leave in
accordance with the provisions of s. 79 of the Indian Factories
Act.
This rule led to an industrial dispute which was referred
to the Industrial Tribunal, and the Tribunal held that all the
G
workmen were entitled to 30 days earned leave as under the existing rule and that the rule made by the appellant on the 1st of
July, 1956 cannot be enforced.
It was this award which was
challenged by the appellant before this Court, and the challenge
was based on the broad and general ground that the employer
had full freedom of contract to make a rule for the employment
H
of his employees and that the Industrial Tribunal is not entitled to
(I) [1963] 3 S.C.R. 930.
t
•
-
'"
•
•
,
A
B
c
SALEM ELECTRICITY v. EMPLOYEES (Gajendragadkar, C.J.) 507
interfere with his freedom of contract. It appears that the change
which the employer sought to make by the new rule did not involve any appreciable financial burden, and it was not the case
of the appellant that the existing rule caused any hardship to him.
The appellant, however, wanted to urge before this Court the
theoretical ground that in a matter of employment, an industrial
employer is entitled to make his own conditions with his employees
and that industrial adjudication should not interfere with his freedom of contract in that behalf. Indeed, as the majority judgment shows, the appellant was a good employer and was treating
his employees in a very liberal manner. He, however, brought
the dispute before this Court in order to assert the general principle which was raised for the decision of this Court. That is the
background of the majority decision in Rai Bahadur Diwan Badri
Das's(') case.
Dealing with the broad point raised by the learned SolicitorGeneral on behalf of the appellant in that case, this Court held
D that several decisions pronounced by industrial adjudication had
now established the principle that the doctrine of absolute freedom
of contract had to yield to the higher claims for social justice .
Even so, this Court took the precaution of making it clear that
the general question about the employer's right to manage his own
affairs in the best way he chooses, cannot be answered in the
E abstract without reference to the facts and circumstances in regard
to which the question is raised, and it was pointed out that in
industrial matters of this kind, there are no absolutes and no
formula can be evolved which would invariably give an answer
to different problems which may be posed in different cases on
different facts.
F
Having thus dealt with the general point raised by the learned
Solicitor-General in Rai Bahadur Diwan Badri Das's( 1) case, the
majority decision considered the facts in that particular case and
held that the Tribunal was not shown to have been in error when
it held that in the matter of earned leave there should be uniforG mity of conditions of service governing all the employees in the
service of the appellant. It was in that connection that reference
was made to the fact that in regard to all the other terms and
conditions of service, there was uniformity in the appellant's establishment itself; and so, it was thought that the Tribunal might
have been justified in discouraging a departure from the said
H
uniformity in respect of one item, viz., earned leave. It would
thus be clear that this decision does not lay down any general
(I) [1963] 3 S.C.R 930.
508
SUPREME COURT REPORTS
[1966] 2 S.C.R.
principle at all. In fact, this decision emphatically brings out the
A
point that in dealing with industrial disputes, industrial adjudication should always resist the temptation of laying down any broad,
general or unqualified propositions. Therefore, we do not think
that the decision of this Court in the case of R. B. Diwan Badri
Das(') is of much assistance.
In that case, the Court was dealing with an award pronounced by an Industrial Tribunal in an B
industrial dispute; and the narrow question which the Court decided was that the Industrial Tribunal was not in error in not upholding the rule made by the employer on the 1st July, 1956.
In the present case, we are dealing with proceedings arising under
the Act and that means that considerations which govern the
present proceedings are not necessarily the same as those which
would govern the decision of an industrial dispute brought before
the Industrial Tribunal for its adjudication under the Industrial
Disputes Act.
c
The next decision to which Mr. Setalvad has referred was
pronounced by this Court in the case of Associated Cement Staf}
D
Union and Another v. Associated Cement Company and Others( 2 ).
During the course of the hearing of this appeal, some arguments
were urged before us on the question about the relation between
terms and conditions of service governing working hours, leave,
and the like, and the wages paid to the employees. Mr. RamaE
murti who appeared for the respondents conceded that the terms
and conditions in regard to leave or working hours can be changed;
•
-
but he contended that the increase in the working hours or the
-t;
reduction of earned leave should not be permitted to be introduced
"'
without taking into account the question about the consequent
increase in the wage structure itself; and it was with a view to F
combat this contention that Mr. Setalvad referred us to the decision in the Associated Cement Co.(2). In that case, the question
of holidays, working hours and wages were all referred to the
Industrial Tribunal for its decision.
The matter which arose for
the decision of this Court in the appeals which were brought to
this Court in that case, was, inter alia, in regard to holidays. The G
Tribunal had allowed 21 holidays, whereas this Court reduced the
number to 16.
Dealing with the question about the normal
working hours, this Court observed that "once a conclusion about
the normal working hours is reached after considering the optimum working hours on a consideration of all the relevant
iifactors, industrial adjudication cannot hesitate to give effect to its
H
conclusion merely because the workmen would have been entitled
,
(l) [1963] 3 S.C.R 348.
(2} (1964] I L.L.J. 12.
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SALEM ELECTRICITY v. EMPLOYEES (Gajendragadkar, C.J.) 509·
A to more wages at overtime rates if the hours of work had been
fixed at less''.
Mr. Setalvad relies upon this observation. But
we think it would be unreasonable to read this observation in
isolation, because in the very next sentence, this Court has added
that it is true that in fising the proper wage-scale, the question
of workload and the matter of working hours cannot be left wholly
B out of consideration, though it further observed that many other
.factors including the need of the workmen, the financial resources
of the employer, the rates of wages prevailing in other industries
in the region, have all to be considered in deciding the wagescale. It appears that in that case, the Tribunal itself had held
that 21 holidays erred on the side of excessive liberality, and yet
C it did not reduce that number.
That is why this Court reduced
the number of holidays from 21 to 16.
This decision, in our
opinion, does show that where industrial adjudication has to deal
with an industrial dispute in relation to wage structure, working
hours, and holidays, it must consider the problem comprehenD
sively and in prescribing the working hours, and making provision
for holidays and leave with or without pay, amongst other relevant
factors, the wages paid to the employees have no doubt to be taken
into account. But these considerations do not arise in the present
proceedings, because what the appropriate authorities under the
Act had to consider was whether two sets of Standing Orders
E should be permitted under the same establishment or not.
The last case to which reference must be made is Guest, Keen,
William Private Ltd. v. P. J. Sterling and Others(').
In that
case, the Standing Order had been certified under the Act prior
to its amendment.
The relevant Standing Order had relation to
F
the age of retirement of the employees under the establishment in
question.
When the Standing Order was certified, its fairness and
reasonableness could not have been examined by the Certifying
Authority.
After it was certified, the employer sought to give
effect to the age of retirement in regard to employees who were
already in its employment; and that gave rise to an industrial
G dispute.
The employees who were already in the employment of
the employer, contended that prior to the certification of the
Standing Order, there was no age of retirement in the concern
and they urged that the certified Standing Order could not affect
their right to continue in the employment so long as they were
fit to discharge their duties. It was in the context of this dispute
H that the question arose as to whether the certified Standing Order
applied to the previously existing employees. The Labour Appel-
(1) [1960] I S.C.R. 348.
/
510
SUPREME COURT REPORTS
[1966) 2 S.C.R.
late Tribunal against whose decision the appeal was brought to
A
this Court by the appellant Guest, Keen, Williams Private Ltd.,
had held that the certified Standing Order could not apply to the
employees who were already in the employment of the appellant.
This Court affirmed the view expressed by the Labour Appellate
Tribunal that the certified Standing Order could not affect the
rights of the previous employees; nevertheless, it was held that
B
the question of prescribing an age of retirement for them could be
ronsidered in the proceedings before the Court and under the
special circumstances to which reference has been made in the
judgment, it was thought that the age of superannuation for prior
employees could be reasonably and fairly fixed at 60 years. This
decision again is not of any assistance, because the matter came
C
to this Court from an industrial dispute which was the subjectmatter of industrial adjudication before the Industrial Tribunal
and the Labour Appellate Tribunal; and all that this Court did was
to fix an age of superannuation or workmen who had been employed prior to the date of the certification of the relevant StandD
ing Order, at 60, and that course was adopted under the special
and unusual circumstances expressly stated in the course of the
judgment.
As we have already pointed out, the question as to
whether two sets of Standing Orders can be certified under the
provisions of the Act, did'not fall to be considered in that case.
Therefore, we are satisfied that the Certifying Officer as well as
E
the appellate authority conunitted no error of law in refusing to
certify the modified Standing Orders submitted by the appellant
in the present proceedings.
The result is, the appeal fails and is dismissed with costs.
Appeal dismissed.
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