Financial Capacity Of Employer Is Important Factor That Can't Be Ignored In Fixing Wage Structure: SC
The Supreme Court held that the financial capacity of an employer is an important factor that cannot be ignored in fixing wage structure.
The Court was deciding a batch of two appeals preferred against the judgment of the Bombay High Court, directing wage revisions pertaining to the workmen of a company named VVF India Limited (employer) working in two units at Sewree and Sion.
The two-Judge Bench comprising Justice Aniruddha Bose and Justice Sanjay Kumar observed, "In particular, the employer has emphasised that the High Court ignored the negative financial status of the company on the ground that the losses made by it was miniscule. In this regard, the judgments of this Court in the case of A.K. Bindal -vs- Union of India & Ors.[(2003) 5 SCC 163] Mukand Ltd. -vs- Mukand Staff & Officers Association [(2004) 10 SCC 460] have been relied upon. Both these authorities lay down the financial capacity of an employer is an important factor which could not be ignored in fixing wage structure."
“In the given facts where the employer seriously contested the use of the concerned units as comparable ones, and highlighted its difficult financial position, the proper course would have been to remit the matter to the Industrial Tribunal rather than entering into these factual question independently in exercise of the writ jurisdiction. This exercise would have required leading of evidence before the primary forum, the Industrial Tribunal in this case.", it also said.
Senior Advocate Sanjay Singhvi appeared on behalf of the appellants while Senior Advocate Jamshed P. Cama appeared on behalf of the respondents.
Facts of the Case -
The appeal was instituted by the employees union against the judgment of the High Court by which it dismissed the union’s petition for review of the judgment passed in 2019. The argument of the union was that their submissions relating to certain allowances were not considered in the main judgment. The proceedings had their origin in a charter of demand raised by the union in 2008.
The demand was in respect of altogether 146 workmen, out of which 80 were engaged at the employer’s establishment at Sewree and 66 of them employed at Sion, both being situated within Mumbai. The original corporate entity VVF Ltd., underwent a demerger process and the units of the company at Sion and Taloja went to VVF India Ltd., the resulting company, during pendency of the reference, arising from the charter of demand.
The Court in view of the facts and circumstances of the case noted, “Analysis of the authorities relied on by the learned counsel for parties reflect the position of law on this point to be that, though the High Court ought not to reappreciate evidence and substitute its own finding for that of the Tribunal, it would not be beyond the jurisdiction of the High Court in its power of judicial review to altogether eschew such a process. The High Court, in the impugned judgment, however, reappreciated the evidence led before the Tribunal in identifying comparable concerns for applying the industry-cum-region test. In particular, the employer has emphasised that the High Court ignored the negative financial status of the company on the ground that the losses made by it was miniscule.”
The Court said that it did not find proper analysis of the employer’s evidence with regard to the financial position of the company.
Accordingly, the High Court disposed of the appeals, set aside the judgment of the High Court, and directed the Industrial Tribunal to re-examine the cases of the respective parties afresh.
Cause Title- The VVF Ltd. Employees Union v. M/s. VVF India Limited & Anr. (Neutral Citation: 2024 INSC 293)
Appearance:
Appellants: Senior Advocate Sanjay Singhvi, Advocates Bennet D' Costa, Jignasha Pandya, Nitin S. Tambwekar, and AOR Seshatalpa Sai Bandaru.
Respondents: Senior Advocate Jamshed P. Cama, AOR Anil Kumar Mishra-I, Advocates Prashant Pavaskar, Supantha Sinha, Aditya Jain - I, and Ankit Dhawan.
