Delhi District Court
Workmen vs . on 18 May, 2023
OLD CASE
IN THE COURT OF AJAY GOEL, PRESIDING OFFICER
INDUSTRIAL TRIBUNAL-01, ROUSE AVENUE COURT,
D.D.U. MARG, NEW DELHI.
Ref. No.: F.24 (44)/Lab./SD/2007/11037
Dated : 18.11.2009
NEW I.D. No. : 729/2016
OLD ID No. : 86/2009
Workmen
as represented by
Hotel Mazdoor Union
C-204, Ashok Hotel Staff Quarters
Chanakyapuri, New Delhi
Vs.
The Management of
M/s Aka Saka Restaurant
Defense Colony Market
New Delhi
Date of Institution : 15.01.2010
Date of presentation : 28.02.2023
before this court
Date of Arguments : 09.05.2023
Date of Award : 18.05.2023
AWAR D
1.Labour Department, Govt. of the National Capital Territory of Delhi has referred this dispute arising between the parties named above for adjudication to this Tribunal vide notification No. F.24 (44)/Lab./SD/2007/11037 dated 18.11.2009 ID No. 729/16 Page No. 1 of 29 with following terms of the reference:-
"(i) Whether demand of workmen as mentioned in Annexure 'B' to revise the pay scale as per Annexure'A' is legal and/ justified; and if so, to what relief are they entitled and what directions are necessary in this respect?
(ii) Whether demand of workmen to enhance House Rent Allowance to 30% of revised Basic Pay is legal and/or justified; and if so, to what relief are they entitled and what directions are necessary in this respect?
(iii) Whether demand of workmen for conveyance allowance @ Rs.600/- p.m. is legal and/or justified; and if so, to what relief are they entitled and what directions are necessary in this respect?
(iv) Whether demand of workmen to enhance cash handling allowance is legal and/or justified; and if yes, to what relief are they entitled and what directions are necessary in this respect?
(v) Whether demand of workmen to enhance L.T.A per year is legal and/or justified; and if yes, to what relief are they entitled and what directions are necessary in this respect?
(vi) Whether demand of workmen to give merit increment to those workmen rendering long service with the management is legal and/or justified, and if yes, to what relief are they entitled and what directions are necessary in this ID No. 729/16 Page No. 2 of 29 respect?"
2. Statement of claim has been filed by the claimant/workmen, wherein it is alleged that the Hotel Mazdoor Union has been looking after the interest of the workers of Hotels, Restaurants and Catering establishments in National Capital of Delhi region for the last 40 years; that the workers of AKA SAKA Restaurant are members of Hotel Mazdoor Union for the last about 30 years; that AKA SAKA Restaurant is a chinese restaurant to serve chinese cuisine and also have Bar to serve liquor, wine, bear and cocktails to the customers; that the kitchen of the restaurant has been given on contract at 60:40 basis on food sale, the manager for running/ maintaining the restaurant and get 60% of sale and the contractor who prepare chine's cuisine with his own material and expenses received 40% of sale; that restaurant is a very reputed restaurant and earning a good income from the food and beverage; that the management has very good financial capacity; that the management to run the restaurant is employing only 23 workmen; that the wages and other benefits of the workmen are very low in comparison to net income of the management and most of the workers are very low paid in comparison to other restaurants in Delhi region; that almost they are getting minimum wages; that the prices of all the essential commodities have gone so much hight that it has become very difficult for the workers of restaurant to meet their both ends in the present emoluments/wages; that the workers have to spent more on traveling for duty as they live on distant place; that the bus fare has been increased to more than 200% by ID No. 729/16 Page No. 3 of 29 the Government of NCT of Delhi; that the workers have to pay more on Children Education in the changed atmosphere i.e. in the globalization era; that the workers of the restaurant have been drawing the wages on the basis of settlement of York Hotel as the main negotiator on behalf of the management of York Hotel was Mr. Balbir Singh, who was also the proprietor of the Aka Saka Restaurant; that the last settlement was entered into on 07.08.1997 and was expired on 31.03.2000; that in clause-7 of the settlement, the management agreed that the next settlement shall be for 3 years or as agreed upon by both the parties; that after the expiry of the above settlement, the union on behalf of the workmen served a Charter of Demands upon the management with a request to consider and settle the same across the table, but the management did not concede the just and genuine demands of the workmen; that the workmen started agitation to bring the management on negotiation table to settle the pending Charter of Demands but the management approached the Hon'ble High Court of Delhi and succeeded in obtaining injunction order and on dated 11.12.2001 the Hon'ble High Court has directed the management of various Hotels and Restaurants including the management of M/s Aka Saka Restaurants to negotiate with the union and settle the demands of the workers; that the union requested the management to fix a meeting for negotiation on the Charter of demands served vide union demand notice dated 15.04.2000, but the management did not hold the meeting; that than a reminder was sent to the management to fix meeting to have discussion and settle the demands of the ID No. 729/16 Page No. 4 of 29 workmen and it is thereafter, the management had fixed a meeting and since then the management has been lingering on the matter on one pretext or the other; that the workmen/ Union through letter dated 21.10.2005 again requested the management repeating the contents of Charter of demands dated 15.04.2000 to consider the same; that the management held the meeting with the workmen but not with the union to let down the workmen but of no avail; that the demands of the workmen mentioned in Annexure-A are just and genuine, therefore, they are entitled for revisions of pay, revision in D.A., HRA, Food Allowance Free Meal etc. As mentioned in Demand notice; that the management did not consider the demands of the workmen and the case was raised before the conciliation officer and on failure of the conciliation proceedings, the present case has been referred for adjudication before this Tribunal; that hence the present statement of claim before this Hon'ble Court and that the union has espoused the case of the workmen.
It is prayed in the Statement of Claim that the management be directed to provide the wages, pay scale and other benefits to the workmen being just and genuine from 01.04.2000 and an award to this effect may kindly be passed in favour of the workmen and against the management and also direct the management to pay a sum of Rs.20,000/- in lieu of legal expenses incurred by the workmen in the present as per the provisions of Industrial Disputes Act and rules framed there in the interest of justice.
3. In the written statement filed on behalf of management, ID No. 729/16 Page No. 5 of 29 it is alleged that the present reference, as made to this tribunal, is legally incompetent and this tribunal has no jurisdiction to adjudicate upon the same; that at the behest of Hotel Mazdoor Union, a reference dated 05.03.2008 was made for adjudication of the Industrial Tribunal, Delhi and while the reference dated 05.03.2008 was pending adjudication, a settlement dated 16.01.2009 was arrived at between the management and all its workmen in full and final settlement of all the financial demands of the workmen; that after the settlement was arrived, a joint application dated 16.01.2009 was made both on behalf of the workmen as well as the management, placing on record settlement dated 16.01.2009 and for passing an Award in terms of the settlement; that the Industrial Tribunal based on evidence on record, passed an order dated 27.08.2009, inter-alia, holding that the settlement had been signed by the workmen out of their free will and the same was binding on all the workmen; that the Court further held that the signatures of the workmen were not obtained forcibly as alleged by the Union and once the involuntariness of the settlement has been proved, it is binding on the parties to it; that after having passed the aforesaid Order, the Ld. Tribunal was also pleased to pass an Award dated 06.11.2009 holding that the 22 workmen mentioned in the Annexure -A had entered into the settlement of their own free will with the management, and therefore, the said settlement was binding on them and the reference was answered in terms of the settlement dated 16.01.2009; that in view of the aforesaid settlement arrived at ID No. 729/16 Page No. 6 of 29 between the workmen and the management of Aka Saka Restaurant, all the financial demands raised by the Union and/ or the workmen as on the date of settlement or prior to the same, stood finally settled; that admittedly, the purported demands covered by the present reference were pending before the Conciliation Officer as on the date of settlement, viz. 16.01.2009 as well as on 06.11.2009 when the Award was passed by the Tribunal; that the present reference, thus, made on 18.11.2009 containing various financial demands is legally incompetent and barred by the settlement as well as the Award referred above and as such, this Hon'ble Court has no jurisdiction to adjudicate upon the reference made or grant any relief as claimed; that the workmen through Hotel Mazdoor Union had entered into a settlement dated 09.01.2007 under which the workmen were granted certain monetary benefits; that the said settlement was duly registered by the Conciliation Officer as well; that the said settlement is still valid and binding on the parties, the same having not been terminated as required under law and therefore, bars the present reference; that Hotel Mazdoor Union has no locus standi to put up the purported Statement of Claim; that the status of the union is only that of an agent and not a party to the reference; that the party to the reference are the workmen and as such it is the workmen who are required under law to file the statement of claim which they have not done; that there is, therefore, no proper or valid statement of claim and as such, the same is liable to be dismissed; that the workmen of the establishment have no dispute or demand against the management ID No. 729/16 Page No. 7 of 29 and they have not espoused the subject matter of the reference nor have put up any statement of claim before this Hon'ble Court; that the subject matter of the reference, therefore, has not acquired the character of an industrial dispute and, as such, this Court has no jurisdiction to adjudicate upon the same; that the workmen of the restaurant have not been members of the Union and this being the reason, they have not signed and put up any Statement of Claim; that the management employs only 22 workmen and all of them have signed the settlement and are bound by the same; that the workmen, therefore, have no dispute involving financial demands against the management; that the workmen, therefore, are not entitled to any relief under the present reference; that the workmen of the management are being paid reasonably high emoluments and their wages have never remained static; that the wages being paid are higher than their counterparts employed in comparable establishments; that the management had enclosed a Chart with the written statement, which would go on to show that during the span of last three years, there has been a minimum wage increase of Rs.1,756/- and maximum of Rs.2,186/- by virtue of Dearness Allowance and increments granted to the workmen; that the wage increase in last three years ranges from 25% to 38%; that the workmen are being paid Variable Dearness Allowance @ 2 points per every one point increase in Consumer Price Index; that the workmen unlike other restaurants, are being provided free meals and no deduction is made from their salaries on this account as in the case of other restaurants; that the management also provides tea ID No. 729/16 Page No. 8 of 29 twice daily to its workers; that the free meals and tea provided to the workers entails considerable expenses and the same will also have to be taken into consideration for increase in their emoluments; that the wages being paid to the workmen including perks and benefits are higher than their counterparts employed in comparable restaurants; that no case, therefore, is made out for grant of any further wage increase at that point of time; that by virtue of Variable Dearness Allowance, the workmen are getting periodical wage increase in their emoluments every six months with the rise in Consumer Price Index; that the rise in cost living, therefore, is being fully neutralized; that the salaries and the periodical wage increase by way of dearness allowance adequately takes care of all expenses including traveling expenses and, therefore no increase is warranted on this account; that the emoluments of the workmen have never remained static and there was periodical wage increase in their emoluments neutralizing the cost of living which would include children education as well; that the management of Aka Saka was not entered into long term settlements with the Union; that the last settlement which was entered into between the management and the workmen was dated 09.01.2007 and the said settlement is still valid and being as the same was not terminated; that yet another settlement dated 16.01.2009 was arrived at by virtue of which all the financial demands of the workmen subsisting on the date of the settlement and passing of Award by the Tribunal, stood finally settled and the same include the demands covered by the present reference; that in ID No. 729/16 Page No. 9 of 29 view of the binding statement, therefore, the Union and the workmen are estopped under law from putting up any financial demands on the management and, therefore, the demands referred for adjudication have to be rejected; that since no settlement had been signed or entered by the management, the question of its expiry and submitting any fresh Charter of Demands on the management did not arise; that the workmen have no dispute against the management, much less with respect to the purported demands referred for adjudication at the instance of the union; that the workmen had already signed the settlement and having settled all their financial demands fully and finally are not interest in pursuing the present reference; that the workmen, therefore, are not entitled under law for any further revision in pay, dearness allowance, house rent allowance etc; that that Union without any authorization or consent of the workmen, put up some Statement of Claim in conciliation and the management duly appeared before the Conciliation Officer and place on record the factual position; that the workmen never raised any such disputes in conciliation nor before this Hon'ble Court; that the Union is only an agent and not party to the reference and, therefore, the espousal has to be done by the workmen which is not the case and that the purported dispute, therefore, does not constitute an industrial dispute.
All other averments made in the statement of claim have been denied and dismissal of the same has been prayed for.
4. Rejoinder has been filed by workmen, wherein all averments made in the written statement have been denied and the ID No. 729/16 Page No. 10 of 29 contentions made in the statement of claim have been reiterated and affirmed.
5. On the basis of pleadings of the parties, following issues were framed by Ld. Predecessor vide order dated 13.01.2011 :-
"1. Whether settlement dated 07.08.97 and 16.01.2009 are relevant in the present reference? OPM
2. As per the terms of reference.
6. Thereafter, vide order dated 02.12.2011, the issues framed on 13.01.2011 were re framed as below:
1. Whether the present reference is barred by settlements dated 16.01.2009 and 09.01.2007 as submitted for the management in preliminary objections of written statement? OPM
2. Whether statement of claim filed for workmen is valid and proper? OPW
3. Whether the present claim of the workmen has been properly espoused by the Union? OPW 4 As per terms of reference.
7 To prove their case, workmen examined Sh. M.M. Gope, Vice President of Hotel Mazdoor Union as WW1. In his affidavit by way of evidence, Ex.WW1/A, he has affirmed the contents of his statement of claim. He has also relied upon documents Ex.WW1/1 to WW1/25. On 14.01.2010 and 09.04.2010, Ld. AR for the ID No. 729/16 Page No. 11 of 29 management had cross examined WW1 Sh. M. M. Gope at length.
Workman Sh. Chander Singh appeared as WW2 and WW3 in workmen evidence. He tendered his evidence by way of affidavit Ex.WW2/A and relied upon documents already Ex.WW1/1 to WW1/25. He was also cross-examined by Ld. AR for the management. Workmen also examined Sh. Himmat Changwal, Joint Secretary of All India ITDC Employees Union (Regd.), as WW3 in workmen evidence. He was also cross-examined by ld. AR for the management. Thereafter, ld. AR for workmen closed workmen evidence vide his separate statement.
8. To establish their case, management examined MW1 Sh. R.P Gupta, who happened to be partner of management/Ms. Aka Saka Restaurant and relied upon documents Ex. MW1/1 to MW1/13. MW1 was cross-examined by ld. AR for the workmen at length and on the same day i.e. 27.05.2016, Ld. AR for the management closed management evidence vide his separate statement.
9. Both the parties filed their written arguments. Thereafter, final arguments have been heard at length from both the parties. 10 It has been argued by the ld. AR for the workman that MW-1 has admitted that:
"management has not filed any record of wages of any other establishment to show that we are paying higher wages than those establishment." He further admitted 1 do not remember whether the management revised the wages of workmen @
11.5% since 1996 1 do not remember whether arrears of ID No. 729/16 Page No. 12 of 29 increased wages have been paid by the management to the workers from time to time."
All these facts reveal that management is making false excuses on various pretexts to deny the just and fair demand of the workmen for higher wages to make both ends meet. The management witness MW-1 during examination in chief and cross examination has not submitted any proof of their inability to pay higher wages and benefits to workmen. As regards financial capacity to pay, the management in arguments have admitted that the establishment has been making profits throughout since 2010- 2011, therefore there is no merit or substance in the purported averments that it does not have financial capacity to bear additional financial burden. He further argued that paying capacity cannot be the ground for refusal to deny higher wages as it is not in the hands of workmen to manage financial affairs of the establishment. Hence, parity of wages with workmen of similar restaurant establishments in the same region is the paramount need of the hour to redress the genuine grievance of the workmen for wage revision so as to bring parity of wages between workmen of Aka Saka Restaurant and ITDC hotel workers in Delhi doing the same nature of job.
In this regard, he placed relied on the decision of Hon'ble Delhi High Court in the case of M.C.D. v/s workmen (Mates) & Anr 2003 LLR 1023 (Delhi H.C.) wherein it was held that 'priority of wages granted by Industrial Tribunal to Mates working in MCD to those working with CPWD performing similar ID No. 729/16 Page No. 13 of 29 duties will not be interfered by the High Court. Therefore, the writ petition of MCD against workers will not be tenable.' He further argued hat management has admitted that it has not entered into wage settlements with the Union since 16.01.2009 therefore it has become all the more necessary to revise wages of the workers as the prices have gone up sharply in the past 10 years and run- away inflation has sky-rocketed so fast in the past decade that the only way to do justice to the labour is to evaluate and determine each component of wage in the light of prevailing prices so as to bring it at par with other similarly placed hotels in the region. He further argued that management is not only guilty of delaying and denying wage revision on false and flimsy pretext of incapacity to pay, but also misappropriating service charge @ 10% included in the food and beverage bills collected from customers for the welfare of workers and thus, involved in unfair labour practice besides committing dishonesty, cheating and fraud with workers' money.
11. On the other hand, AR for the management argued that this tribunal has no jurisdiction to adjudicate upon the present case as same is barred by settlement dated 16.01.2009 read with award dated 06.11.2009, passed by POIT-II, Delhi in ID no. 51/2008; that in view of the aforesaid settlement, arrived at between the workmen and the Management of Aka Saka Restaurant, all the financial demands as raised by the Union and or the workmen as on the date of settlement or prior to the same, stood finally settled. Admittedly, the purported demands covered by the present reference were ID No. 729/16 Page No. 14 of 29 pending before the Conciliation Officer as on the date of settlement, viz. 16.01.09 as well as on 06.11.09 when the Award was passed by the Tribunal. The purported demands covered by the present reference. thus, also stand settled; in view of the same, the various financial demands made by the workmen are legally incompetent and barred by the aforesaid settlement as well as the aforementioned Award; Ld. AR for the management relied upon the judgments of the Hon'ble Delhi High Court in Taj Services Ltd., v. Industrial Tribunal-I, Delhi, (2011)VII AD (Delhi) 37, and Management of India Travel Pvt. Ltd., v. Rajinder Kumar & Or, L.P.A 873/2011, decided on 20.10.2011.
He further argued that the workmen also entered into a settlement dated 09.01.07 Ex. WW2/M16 under which the workmen concerned were granted certain monetary benefits, which was duly registered by the Conciliation Officer and same is still valid and binding on the parties and bars the present reference. He further argued that a small restaurant like Aka Saka Restaurant cannot be compared with a big chain of hotels like I.T.D.C. That the workmen have failed to discharge the burden for substantiating their claim for upward revision of wages and allowances, etc, based on the industry-cum-region principle by comparing the wage structure in Aka Saka Restaurant with any comparable restaurant in the same region. It is further argued that management had already paid periodical wage increase in the emoluments of the workmen every six months and allowances with variable dearness allowance (VDA) linked with Consumer Price Index under the VDA Scheme, ID No. 729/16 Page No. 15 of 29 the emoluments of the workmen, never remained static and, thus, there is no justification in the demands raised by them. He further argued that as a result of consistent increase in VDA, year after year, the financial burden on the establishment increased substantially, which the Management afforded despite deteriorating financial capacity of the Management.
To substantiate their case, AR for the management relied upon following case laws:
a) Fresh Motor Car Co. Ltd. v. Workmen, AIR 1963 SC 1327
b) Williamsons (India) Pvt. Ltd. v. Workmen (1962) 1 LLJ 302
c) Novex Drycleaners v. Workmen (1962) , 1 LLJ 271
d) Woolcombers of India Ltd. v. Woolcombers Workers Union, AIR 1973 SC 2758
e) Balmer Lawrie and Company v. Balmer Lawrie and Co.
12. I have gone through the entire record of the case including pleadings of the parties, evidence led and documents proved during evidence.
13. My issue wise findings are:-
The issue no. 1 and issue no. 2 are being taken together as they are interconnected with each other. Issue no. 1 & Issue No. 2:-ID No. 729/16 Page No. 16 of 29
1) Whether the present reference is barred by settlements dated 16.01.2009 and 09.01.2007 as submitted for the management in preliminary objections of written statement? OPM
2) Whether statement of claim filed for workmen is valid and proper? OPW
14. The management has contended that the settlements dated 16.01.2009 and 09.01.2007 were already arrived at between the workman and the management, wherein all the financial demands pending between the parties were stood settled. The present reference dated 18.11.2009 containing various financial demand is legally incompetent and barred by the settlement as well as the awards dated 27.08.2009 and 06.11.2009.
15. The workmen have denied the argument of the management that the financial demands as per the terms of reference have already been settled between the parties. The settlement arrived at between the parties as per the settlements dated 16.01.2009 and 09.01.2007 do not pertain to the demands raised in the present dispute. I have gone through the cross- examination of the management witness i.e. MW-1 dated 27.05.2016, wherein it was admitted that "it is correct that in the settlement dated 16.01.2009 the demand of the workers mentioned in the reference was not specifically mentioned." He further admitted that despite the pendency of the present dispute before the conciliation officer, the management did not file the settlement dated 16.01.2009 before the conciliation officer. The ld. AR for the workman gave the suggestion that the same has not been filed ID No. 729/16 Page No. 17 of 29 because none of the demands as per terms of reference were settled by the management.
16. The bare perusal of the settlement dated 16.01.2009 and 09.01.2007 reveal that the general demands on behalf of the workmen for providing staff uniforms, food expenses, monthly non- veg allowances among other things were raised. Whereas in the present case the workmen have asked for the revision of pay scale, enhancement of house rent allowances, conveyance allowances, cash handling allowances, enhancement of LTA and merit increment. The present demands are totally different from the aforesaid settlements arrived at between the parties. Even otherwise, the settlement dated 16.01.2009 completely bars the workmen concerned from raising any dispute in the future. Such an agreement wherein either party is estopped from availing legal remedies before the court of law is illegal and against the public policy.
17. The hon'ble Supreme Court in the case of LIC v. DJ Bahadur, 1980 AIR 2181, has discussed the validity of the settlement at length. The relevant paragraph is reproduced hereunder:
There are three stages or phases with different legal effects in the life of an award or settlement. There is a specific period contractually or seatutorily [statutorily] fixed as the period of operation. Thereafter, the award or settlement does not become non est but continues to be binding. This is the second chapter of legal efficacy but qualitatively different as we will presently show. Then comes the last phase. If notice of intention to terminate is ID No. 729/16 Page No. 18 of 29 given under s. 19(2) or 19(6) then the third stage opens where the award or the settlement does survive and is in force between the parties as a contract which has superseded the earlier contract and subsists until a new award or negotiated settlement takes its place. Like Nature, Law abhors a vacuum and even on the notice of termination under s. 19(2) or (6) the sequence and consequence cannot be just void but a continuance of the earlier terms, but with liberty to both sides to raise disputes negotiate settlements or seek a reference and award. Until such a new contract or award replaces the previous one, the former settlement or award will regulate the relations between the parties. Such is the understanding of industrial law atleast for 30 years as precedents of the High Courts and of this court bear testimony.
18. As per the settled position of law, the settlement can only be replaced or terminated either by new settlement or an award. The settlement arrived at between the parties cannot bar the said parties from negotiating the new terms of settlements or from raising an industrial dispute to the effect. Therefore, the argument of the management that the workmen are estopped from raising the present industrial dispute as per the settlements dated 16.01.09 and 09.01.07 is not tenable, therefore, this tribunal holds that the present statement of claim filed by the workmen is valid and proper. Hence, the Issue no. 1 and Issue no 2 are decided in favour of the workmen and against the management.
Issue no. 3:-
3. Whether the present claim of the workmen has been properly espoused by the Union? OPW ID No. 729/16 Page No. 19 of 29
19. So far as the issue with regard to proper espousal of present claim of the workmen by the Union is concerned, the Division Bench of Kerala High Court in the matter of Mangalam Publications (India) Pvt. Ltd. v. Saju George, W.A. No. 964 of 2020, decided on 01.12.2020 has held:-
"7......There is no doubt about the fact that the workman was a member of the concerned WA No.964/2020 union. According to the workman, the cause of the workman was undertaken by the union even at the initial stage. Apparently, there was no objection from the side of the management during the relevant time. Thereafter, the matter was considered and ultimately the dispute had been referred for consideration by the Tribunal. Once a reference had been made at the instance of the union, it is not open for the management to contend POIT NO. 932-2016 Page No. 11 of 18 at this stage of the proceedings that the cause of the workman had not been espoused by the union."
.The management has taken this objection in its written statement, however, it does not disclose the ground/reason upon which this objection is taken. The management has failed to show if such an objection has been taken by the management when the proceedings were conducted before the conciliation officer, on the contrary, the management duly participated in the said proceedings. Therefore, at this belated stage the management is not allowed to take this contention more so in the absence of basis/reason for stating that ID No. 729/16 Page No. 20 of 29 the present dispute is not espoused properly by the union. Even otherwise, the present dispute is a collective dispute of general demands of the large number of workmen and therefore, this in itself is an Industrial Dispute and requires no espousal. Hence, this issue i.e. Issue No. 3 is decided in favour of the workman and against the management.
Issue no. 4:-
4. As per terms of reference
20. It is not disputed that the management M/s Aka Saka is a restaurant to serve chinese cuisine situated at Defence Colony, New Delhi and commands good reputation for the last 40 years. It has also come on the record that the kitchen of the said restaurant is being run and mangaged by a third party. This said restaurant is run for the profit making purpose and there is no charitable aspect attached to it. Therefore, in this light this tribunal has to decide the demands of the workmen who have been seeking revision of their pay scales which were last enhanced in the year 1997 as per the settlement dated 07.08.1997. The workmen have contended that the wages and other benefits of the workmen are very low in comparison to the net profit of the management and they are poorly paid. The management on the other hand, has placed on record the details of wages paid to the workmen Ex. MW1/3, wherein certain minimal enhancement of wages were done by the management from 2007 to 2010. Apart from this, the management has not placed any record to show that the wages of the workmen were revised after ID No. 729/16 Page No. 21 of 29 2010.
21. The management has categorically stated that it does not have a good financial capacity, however, the balance sheets placed on record by the management, show that the managmeent is earning net profit every year.
22. Hon'ble Supreme Court in Unichem Laboratories Ltd.
Vs. Workmen, AIR 1972 SSC 2332 has laid down the law for determining the gross profit for the purpose of pay fixation and gratuity. In line of the law laid down by Hon'ble Supreme Court, the gross profit is to be arrived at by not taking into account any tax, depreciation and development reserve. The relevant portion of the judgment is reproduced herein below:-
"In Gramophone Company Ltd. v. Its Workmen(1), this Court, in dealing with a gratuity scheme, had to consider the principles applicable for ascertaining the financial capacity of an employer. In that decision the employer contended that before the real profit for each year can be4 arrived at, the provisions made for taxation and for development reserves should be deducted. On this basis, it was further contended that if these deductions are made, there will not be any profit left which will enable the Company concerned to frame a gratuity scheme. This claim for deducting taxation and development rebate reserves was negatived by this Court as follows :
"When an industrial tribunal is considering the question of wage structure and gratuity which in our opinion stands more or less on the same footing as wage-structure, it has to look at the profits made without considering provision for taxation in the shape of income-tax and for reserves. The provision ID No. 729/16 Page No. 22 of 29 for income-tax and for reserves must in our opinion take second place as compared to provision for wage structure and gratuity, which stands on the same footing as provident fund which is also a retrial benefit."
It was further observed that if an industry is in a stable condition and the burden of provident fund and gratuity does not result in loss to the employer, that burden will have to be born by the employer, like the burden of wage-structure in the interest of social justice. It was finally held that the contention on behalf of the Company therein that provision for taxation and provision for reserves should take precedence over provision for gratuity cannot be accented.
From the above decision it is clear that Fixation of wage- structure stands more or less on the same footing as framing of a gratuity scheme and the principles applicable for ascertaining the profits are the same : (2) Provision for taxation and provision for reserves cannot take precedence over for gratuity and fixation of wages; and (3) The provision for income-tax and for reserves must take second place as compared to provision for wage- structure and gratuity.
The above decision categorically rules out any deduction of taxation. It also excludes from deduction all provision for reserves which will take in depreciation reserve also. But, Mr. Tarkunde contended that the above decision is an authority for the proposition that the only two items that could be deducted are provision for taxation and provision for development rebate reserve. If so, the counsel urges that the deduction of depreciation reserve as claimed by the appellant is justified and, that the Tribunal erred in declining that item to be deducted.
ID No. 729/16 Page No. 23 of 29We are not inclined to accept this contention of Mr. Tarkunde. The above decision is, in our opinion, an authority for the proposition that the provision for taxation and provision for reserves, which expression will take in depreciation reserve also, cannot be deducted for the purpose of computing the profits. At 'any rate the, said decision had no occasion to consider whether depreciation reserve can be deducted or not. We have already pointed out that the only claim made by the appellant therein was for deducting provision for taxation and for development rebate reserve and that claim was rejected. Therefore, looked at from any point of view, the above decision is certainly not in favour of the contention of Mr. Tarkunde that depreciation reserve has to be deducted before arriving at profits.
In The Indian Link Chain Manufacturers Ltd. v.
Their Work-- men(1), this Court had occasion to consider the principles applicable to ascertain the financial capacity of a company in fixing wage scales and dearness allowance and framing of a gratuity scheme. The Principle applicable was stated as follows "It is pertinent to notice that gratuity and wages in industrial adjudication are placed on the same footing and have priority over Income-tax and other reserves, as such in considering the financial soundness of an undertaking for the purposes of introduction of a gratuity scheme the profits )that must be taken info account are those computed prior to the deduction of depreciation and other reserves."
The decision in Gramophone Company v. Its Workmen 2 was quoted with approval in this decision. The Company in that case had calculated profits after deducting depreciation. This method was deprecated by this Court as follows :
ID No. 729/16 Page No. 24 of 29"All these profits it may be mentioned are computed after deducting depreciation and this should betoken into account in considering the desirability of formulating a gratuity scheme for- the Appellant." In the end the provision made for depreciation and which had been deducted by the Company for calculation of profits was added back.
23. In the present matter, the management has filed the statement of accessible income/profit and loss income for the year 2010 to 2014. The management has filed a balancesheet for the year 2010-11 to 2013-14. I have perused and analysed the balancesheets placed on record by the management. In the year 2010-11, the gross profit as per Unichem Labs (supra), is around 29 lacs; for the year 2011-12, the profit is around 21 lacs; for the year 2012-13 the profit is around 14 lacs; and for the year 2013-14, the profit is around 13 lacs. For arriving at this figure, depreciation has not been considered.
24. Considering the above analysis, the argument of the management that it does not have the financial capacity to pay as per the demands of the workmen, is baseless.
25. The management cannot ignore the indispensable role played by these workmen in the success and profitability of the restaurant. They are the backbone of retaurant business, toiling day and night to provide high quality service, culinary expertise, and a pleasant experience to guests. Their commitment and expertise directly contribute to the high reputation and continued growth of these businesses.
26. Moreover, the success and profitability of any business ID No. 729/16 Page No. 25 of 29 are built upon the collective efforts of its workforce. It is disheartening to witness the workmen, who have played an integral part in generating consistent profits for their employers, being neglected when it comes to their own financial well-being. A fair and equitable distribution of these profits is not only morally just but also acts as a powerful motivator for the workmen to continue their hard work and dedication. Furthermore, the failure to increase wages for such an extended period sends a demoralizing message to the workmen. It undermines their sense of value and worth within the organization. When employees feel undervalued and under- appreciated, it can lead to decreased morale, lower productivity, and higher turnover rates. By providing a wage increase that is long overdue, we can instill a sense of pride, loyalty, and motivation among the workmen, which in turn will have a positive impact on the overall performance and reputation of the hotel restaurant industry.
27. In the present dispute the workmen have demanded revision of pay scale; house rent allowance @ 30 % of the basic pay; conveyance allowance @ Rs. 600/- p.m.; enhancement in cash handling allowance; enhancement in LTA; and giving merit increment to workmen, who have been rendering services for long period of time. Workmen examined Sh. Himmat Changwal as WW- 3, who claimed to be Joint Secretary of All India ITDC Employees Union. WW-3 placed on record a memorandum of settlement between ITDC and Trade Union of its workers as Ex. WW3/1. As per this memo of settlement, pay scale, annual increment, dearness ID No. 729/16 Page No. 26 of 29 allowances, house rent allowance, city compensatory allowance, meal allowance, cash handling allowance, leave tracel concession, etc. have been settled between the parties. Annexure A of Ex. WW3/1 consists of a table, wherein revised pay scale w.e.f. 01.01.1997 as well as w.e.f. 01.01.2007 is shown. The revised pay scale demanded by the workmen given in Annexure A of the terms of reference is lower than what was being paid to ITDC employees w.e.f. 01.01.1997. The HRA in the above-said memo of settlement is fixed as 30 % for class X cities, 20 % for class Y cities and 10% for class Z cities. Cash handling allowance @ Rs 200/- p.m.
28. The demand of the workmen for conveyance allowance @ Rs. 600/- p.m. is justified considering the increase in transportation charges and also the location of the management in Defence Colony, New Delhi, which is a posh area and workmen cannot afford to live nearby. The demand of enhancing of LTA to Rs. 4000/- per year is also reasonable as the purpose of the same is to provide a break to the workmen, so that they could rejuvenate themselves. For this purpose, the workmen can take a paid vacation to travel his native place or any other place of their choice.
29. To motivate the workforce, organisations employ different measures such as promotion or career progression schemes. In employment where there is little chance of promotion, the workmen get stuck at one position only. In order to motivate them and reward them for their long service, financial upgradation after certain time period is justified. In the present matter the workmen are demanding 'merit increment' of long service @ one ID No. 729/16 Page No. 27 of 29 increment on 7 to 10 years of service, 2 increments on 10-15 years of service and 4 increments on 15-20 years of service.
30. Applying industry cum region formula and considering the financial capacity of the management, I am of the considered view that the workmen are entitled to revision in pay scale as given in Annexure A of the terms of reference, HRA @ 30% of revised basic pay, conveyance allowance @ Rs. 600/- p.m., cash handling allowance @ Rs. 200/- p.m. The enhancement of LTA @ Rs. 4000/- per year is reasonable and allowed. The merit increment of long service as demanded by the workmen is not uniform as the service intervals are different. The merit increment is allowed as 1 increment each on completion of 10 years, 20 years, 30 years of service.
Relief:
31. In view of the above observation, it is held that the workmen herein are workmen are entitled to revision in pay scale as given in Annexure A of the terms of reference, HRA @ 30% of revised basic pay, conveyance allowance @ Rs. 600/- p.m., cash handling allowance @ Rs. 200/- p.m., enhancement of LTA @ Rs.
4000/- per year, merit increment of long service as one increment in revised pay scale each on completion of 10 years, 20 years, 30 years of service w.e.f. date of terms of reference i.e. 18.11.2009. The management is directed to implement the said award within 60 days of its publication, failing which the management will be liable to pay interest @ 8% per annum from the date of award. The award is passed accordingly.
ID No. 729/16 Page No. 28 of 2932. A copy of this award be sent to the Deputy Labour Commissioner, Government of NCT of Delhi of Distt./Area concerned for publication as per rules and judicial file be consigned to Record Room as per rules.
Announced in open Tribunal On this 18.05.2023 (Ajay Goel) POIT-1/RADC, New Delhi ID No. 729/16 Page No. 29 of 29