Finding ‘nearest Five Star Hotel’ benchmark found incapable of implementation, the Delhi High Court has set aside the Industrial Tribunal Award, holding that the substantive wage revision and additional service benefits granted to the workmen of Hotel Sofitel Surya lacked the necessary evidentiary foundation. The Court reaffirmed that the burden of proving disparity in wages and conditions of service rests on the workmen, and the mere existence of higher wages in another establishment cannot, by itself, establish a corresponding entitlement at the concerned establishment.
The Court applied the industry-cum-region principle and held that comparable units may be compared, but units which are dissimilar cannot be treated as guides without making adequate allowance for the differences between them. Resultantly, the workmen’s reliance on settlements with Hotel Claridges, Hotel Imperial, Hotel Vikram, Hotel Diplomat and Hotel Alka did not establish any of those establishments as a proper comparator.
A Single Judge Bench of Justice Shail Jain noted that the Management had already effected successive revisions in 1992, 1994 and 1995, which the workmen had accepted without protest. The settlements relied upon by the workmen with Hotel Claridges, Hotel Imperial, Hotel Vikram, Hotel Diplomat and Hotel Alka did not establish any of those establishments as a proper comparator, and the Award itself did not identify the establishment intended as the ‘nearest Five Star Hotel’. The Court also observed that the Industrial Tribunal’s conclusion on financial capacity did not disclose a reasoned reconciliation with the admitted losses during 1991-92, 1992-93 and 1993-94, as deposed by the Financial Controller.
The Court held that the onus of proving disparity in wages and conditions of service rested upon the workmen, and the mere existence of a higher wage or a more favourable benefit in another establishment could not, by itself, establish a corresponding entitlement at Sofitel Surya. Applying the industry-cum-region principle laid down by the Supreme Court in Kamani Metals & Alloys Ltd. v. Their Workmen [(1967) 2 SCR 463], the Court reiterated that comparable units may be compared, but units which are dissimilar cannot be treated as guides without making adequate allowance for the differences between them.
The Court held that the Tribunal travelled beyond the scope of the reference by granting further wage revision and additional service benefits without first determining, on the basis of evidence, whether the workmen were subject to any continuing disparity in comparison with a properly comparable establishment after accounting for the successive revisions already extended.
The Court further held that an adjudicatory award must determine the rights and obligations of the parties with sufficient precision to enable implementation without requiring a fresh adjudicatory exercise, and the Award in the present case was incapable of effective implementation because it did not identify the comparator establishment, the applicable wage structure, or the corresponding categories of employees.
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Briefly, the petitions arose from a common Award dated Aug 01, 2002, passed by the Industrial Tribunal-III, Delhi. The dispute concerned workmen employed at Hotel Sofitel Surya (also referred to as Best Western Surya and Crowne Plaza Surya), a Five-Star hotel in New Friends Colony, New Delhi, represented by the Hotel Mazdoor Union. On March 26, 1992, the Union served a Charter of Demands on the Management seeking revision of pay scales, dearness allowance, house rent allowance, city compensatory allowance, food allowance, leave, night duty allowance, conveyance allowance, uniforms and leave travel assistance, claiming that wages were substantially lower than those prevailing in comparable Five-Star hotels in Delhi.
Upon failure of conciliation, the appropriate Government referred the dispute for adjudication, and the Tribunal ultimately held the workmen entitled to revision of wages and allowances by reference to the ‘nearest Five Star Hotel’ in Delhi but made the revised salary and allowances payable only with effect from Jan 01, 2003.
