OVER TIME PAYMENT – WAGES UNDER THE Factories Act, 1948
Case: Heavy Vehicles Factory Employees Union
( Rep. By its general Secretary) & another
vs.
Union Of India
(Rep. By its Secretary to Government, Ministry of Defence & Ors.
(2012 LLR 358)
( Rep. By its general Secretary) & another
vs.
Union Of India
(Rep. By its Secretary to Government, Ministry of Defence & Ors.
(2012 LLR 358)
Forum: Madras High Court
Judgement: The petitioner union are registered and
recognised union representing various categories of employees. The
employees who were working under the third respondent establishment
contended that they were, all along, in receipt of overtime allowances
whenever they were detained for duty beyond the normal working hours of
48 hours in a week, and the said allowances were calculated and computed
by including all allowances admissible to the employees like House Rent
Allowance, City Compensatory Allowance, Transport allowance etc. as per
the provisions of the Factories Act 1948.
The first respondent issued a memorandum, dated 26.06.2009
stating that House Rent Allowance, Travelling Allowance and Small Family
Allowance would stand excluded for the purpose of computation of
overtime allowance without assigning any reason therein for exclusion of
the same. Aggrieved by the order, the employees and the union filed
original applications before the Central Administrative Tribunal.
The Tribunal dismissed their applications on the basis of a
letter received from Legal advisor of the Ministry of Law opining that
allowances are excluded from the term “wages” for the purpose of
calculation of overtime allowance.
On an appeal, the Court observed that as per the definition
of sub section (2) of section 59 of the Factories Act, ordinary rate of
wages means basic wages plus such allowances including the cash
equivalent of the advantage accruing through the concessional sale to
workers of food grains and other articles, as the worker is for the time
being entitled to, but does not include a bonus and wages for overtime
work. The court further observed that, in the absence of any rule to
exclude the aforesaid allowances from the definition of the basic wages,
when the section excludes only two items, viz, bonus and wages for
overtime work, the action of the first respondent in excluding the said
allowances is without any authority and such items should be included.
Accordingly, the order passed by the tribunal was set aside.
Shared by Siju Jose T, +Siju Jose Oil Palm India Limited, Senior Manager - HRD
Shared by Siju Jose T, +Siju Jose Oil Palm India Limited, Senior Manager - HRD
