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(ii) Against this backdrop on 14.01.1999 the Department of Public Enterprises (hereinafter referred to as „DPE‟) called for the commencement of the Sixth Round of Wage Negotiations in Public Sector Enterprises and issued guidelines therefor (hereinafter referred to as "DPE guidelines"). This was novel for the nascently formed Air India Limited and Indian Airlines Limited; the last pay revision effected for five years in 1992 had been carried out by the Government of India. The Managements of these public sector aviation enterprises were now charged with conducting wage negotiations with their respective workers, in accordance with the DPE guidelines.

13. The learned Senior Counsel then submitted that the Petitioner's claim that pursuant to the presidential directive dated 21.07.2006, the revised wage arrears could only be paid prospectively to Respondent No.1 w.e.f. 21.07.2006, was wholly misconceived. He submitted that the presidential directive must be taken as a whole and that clause (i) thereof specified that the revision must comply with the guidelines set forth by the Department of Public Sector Enterprise (DPE Guidelines) on 14.01.1999, and 25.06.1999. He referred to paragraph 1 of O.M. dated 14.01.1999, and paragraph 3 of O.M. dated 25.06.1999to argue that the DPE Guidelines unequivocally stated that wage revisions were to be granted to all employees w.e.f. 01.01.1997. He contended that even the draft directive provided by DPE in O.M. dated 25.06.1999 stipulated that wage revision would be applicable from 01.01.1997.Therefore, Mr. Savla contended that since the Petitioner was mandated to issue the presidential directive in conformity with the DPE Guidelines, the direction given by Respondent No. 2 in the subject PD to make the wage revision prospective was beyond the powers conferred by the Government and contravenes DPE guidelines.

44. As per the DPE guidelines, wages last fixed in 1992 had lapsed w.e.f.

01.01.1997 and the Administrative Ministry‟s presidential directives were to indicate ceiling limits for revised pay scales, dearness allowance, and perquisites that should be observed by enterprises during wage negotiations with workers unions. For reasons best known to it, Respondent No.2 waited seven years to issue the presidential directives in accordance with the DPE Guidelines issued on 14.01.1999 and 25.06.1999, and the format used by it was its own. I must note at this juncture how deeply disconcerting it is that Respondent No.1‟s members were forced to continue their employment with the Petitioner on wages fixed in 1992, until 2007. There is no gainsaying the stark differences in the economic realities of India in 1992 and 2007, not to mention the staggering inflation in the country during that period. For context, as per the DPE Guidelines dated 14.01.1999 even the next pay revision was to become due by 2009. Essentially the pay revision that the Respondent No.1 employees were entitled to in 1999 was allowed to them just two years before the next pay revision fell due. Presumably by this point these employees were desperately awaiting a pay revision, and the Management had them over a barrel.

47. A perusal of the documents placed on record indicate that the Respondent No.2 had likely postponed the presidential directive and incorporated the rule for notional wage fixation, because it was unwilling to increase the wages. This is evident from the records of conciliation that took place between the parties for 6 years. It appears that IAL employees were being denied wage arrears on account of a conflict regarding the payment of Productivity Linked Incentives (PLI) being paid to some employees by the company, these PLI had been regulated by the 1999 DPE Guidelines but Respondent No.2 felt that the wage settlements drawn up did not bring the PLI-related payments in conformity with the DPE Guidelines. Thus Respondent No.2 wanted to stop PLI payments and claimed the same had driven up the cost to the company. This assertion was made by Respondent No.2 to the Petitioner in its letter dated 01.12.2010, and the same read as under: