Jalan Trading Co. v. Mill Mazdoor Sabha
Rule established
The Full Bench Formula (laid down in Associated Cement Companies) for fixing wages is not a rigid formula. It provides a floor and framework but must be adapted to the financial capacity of the industry and cost of living. Bonus and dearness allowance are distinct from wages.
Facts
- Mill Mazdoor Sabha demanded revision of wages for textile workers
- Employer argued financial incapacity to pay enhanced wages
- Tribunal applied the Full Bench Formula for determining fair wages
Issue
- Whether the Full Bench Formula is rigidly applicable or admits of modification based on paying capacity.
Held
- Full Bench Formula is a valid framework for wage fixation
- But it must be adapted to the financial capacity of the specific industry
- Components: basic needs + allowance for education, medical, housing at minimum
- Industry's paying capacity is a relevant and limiting factor
- Partial enhancement allowed within paying capacity
Ratio Decidendi
The Full Bench Formula provides a minimum floor for wage computation but is not inflexible. The financial health of the industry is a legitimate consideration that may limit the extent of wage revision.
How to use it in an exam
- Authority connecting Full Bench Formula to paying capacity
- Part B answer on wage fixation principles
- Key line: "In Jalan Trading Co. v. Mill Mazdoor Sabha (1966), the Supreme Court held that the Full Bench Formula guides wage fixation but must be tempered by the industry's paying capacity."
Source
Source: AIR 1967 SC 691
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.