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Showing contexts for: overtime wages in Philips India Ltd vs Labour Court, Madras & Ors on 26 March, 1985Matching Fragments
Sec. 31 prescribes rate of` wages for overtime work. It reads as under:
"31. Wages for overtime work -Where any person employed in any establishment is required to work overtime, he shall be entitled, in respect of such overtime work, to wages at twice the ordinary rate of wages.
Explanation-For the purpose of this section, the expression "ordinary rate of wages 'shall mean such rate of wages as may be calculated in the manner prescribed.' (12) The first question which we must engage our attention is: whether Sec. 14 upon its true interpretation prescribes daily working hours in an establishment as also total number of working hours per week for which work may be taken in any week without incurring the liability to pay higher rate of wages for overtime work.A bare perusal of Sec. 14(1) would show that it prescribes a ceiling on working hours. Obviously, it cannot be interpreted to mean that the employer must provide maximum number of working hours as therein set out in the establishment governed by the Act. It is open to the employer to prescribe working hours for a day and total number of working hours for a week less than the ceiling prescribed by the statute. Sec. 14 puts an embargo on the employers 'right to prescribe working hours beyond therein prescribed subject however, to its liability to pay higher rate of wages for the overtime work done. The proviso however, makes it very clear that the upper limit fixed by the substantive provision can be exceeded up to the ceiling fixed by the proviso and not beyond in any case. This is a prohibition in public interest for safeguarding the health which may be adversely affected by fatigue, stress and strain consequent upon continuous work daily or for total number of hours in a week. This simultaneously ensures a weekly off day even if the employer prescribes number of working hours as provided in Sec. 14(1). Sec. 14(1) therefore, upon its true construction permits an employer to prescribe daily working hours not exceeding 8 hours a day and total number of working hours at 48 in a week. By the proviso, the employer can take overtime work if the working hours do not exceed I hours in any day and 54 hours in a week, The proviso makes it abundantly clear that any work taken in excess of the working hours prescribed in the main part of sub-s. (I) of Sec. 14 would constitute overtime work. 8 hours a day and 48 hours in a week would constitute normal working hours.
Anything in excess of 8 hours a day but not exceeding 10 hours a day and 48 hours a week and not exceeding 54 hours a week will constitute overtime work. This becomes clear from the language used in the proviso when it says that the bar imposed by sub-s. (1) of Sec. 14 may be breached to the extent provided in the proviso. The expression used is that no such person meaning thereby that person, who would be required to work 8 hours a day or 48 hours a week, may be allowed to work in excess of that limit subject to payment of overtime wages. 8 hours a day and 48 hours a week constitute normal time of work at ordinary wages and any work in excess of the time prescribed for work would attract the liability to pay overtime wages. Undoubtedly, the High Court was right in saying that the expression 'overtime' is not defined in the Act but when Sec. 14(1) prescribes permissible hours of work both daily and weekly and makes it obligatory to pay overtime wages for work in excess of the permissible hours of work, the expression 'overtime' renders itself easy of understanding. Overtime work attracts the liability of paying overtime wages.
(14) The question really is not what is understood by the expression 'overtime', but what is the admissible rate of payment for overtime work. If the statute permits employment for a certain number of hours of work and mandates a higher rate of wages for work done in excess of the prescribed hours of work, obviously every employer to whom the Act applies will have to pay overtime wages at the rates prescribed in the statute. Accepting what the High Court has held that Sec. 14(1) merely prescribes the ceiling on working hours and casts an obligation to pay overtime wages as made obligatory in the proviso the question is what period of work shall be treated as overtime work so as to be able to claim overtime wages at statutory rate. Keeping out of consideration for the time being the working hours prescribed by the two appellants, take a case in which the working house are prescribed as permitted by Sec. 14(1). Functionally translated if an establishment, has prescribed working hours as permitted by Sec. 14(1) i.e. 8 hours a day and 48 hours a week, the employees of such establishment would be entitled to overtime wages as directed by the proviso and at the rate prescribed in the statute. To some extent, the proviso in this case has made a positive specific provision simultaneously carving out an exception to Sec. 14(1). The proviso first permits work in excess of the prescribed number of the hours but it is hedged in with the condition to pay overtime wages. The expression 'such person' in the proviso refers to person who is required to work for eight hours a day and forty-eight hours a week. The expression 'such establishment' in the proviso would indicate that establishment which has prescribed the working hours as set out in the main part of the section namely, 8 hours a day and 48 hours in a week. In such an establishment overtime work for such a person would only be that work which would be done in excess of either 8 hours a day or 48 hours a week. Such overtime work has to be compensated at the rate prescribed in Section 31 which provides that there any person employed in an establishment is required to work overtime, he shall be entitled in respect of such overtime work to wages at twice the ordinary rate of wages. The expression 'such overtime' can refer to one contemplated by the proviso to Sec. 14(1) and no other. Reading sections 14 and 31 together, a scheme emerges. The statute first puts an embargo on the power of the employers to prescribe normal working hours, not exceeding 8 hours per day and 48 hours per week. The proviso makes it obligatory to pay overtime wages for work in excess of the prescribed hours as set out in Sec. 14(1). Such overtime work has to be compensated by payment of overtime wages. And the rate of overtime wages is prescribed in Sec. 31 namely, at twice the ordinary rate of wages. The employer would ordinarily prescribe wages for normal working hours. Once the wages for normal working hours per day and cumulative for the week or month are prescribed, they could be styled as ordinary rate of wages. Thus the employer will be liable to pay to the employee wages at the ordinary rate of wages for prescribed hours of work as permissible in Sec. 14(1) and whenever he takes work in excess of the prescribed hours of work the rate for overtime work prescribed by Sec. 31 would come into play. Secs. 14 and 31 provide the whole scheme of prescribing normal hours of work to be paid for as ordinary rates of wages. They permit the employer to take work in excess of the normal working house up to the ceiling as set out in the proviso to Sec. 14(1) which makes it obligatory to pay overtime wages for work in excess of the normal working hours and the rate for the same is prescribed statutorily in Sec. 31.
(18) The next question then is: where the employer prescribes working hours less than the maximum permissible in the statute, does he incur the obligation to pay overtime wages at the rates prescribed in the statute ? If the employer were to contend that even though it has prescribed normal working hours less than that permitted by the statute, and therefore, it would not be liable (1) [1957] 1 All E.R. 497 (2) [1953] SCR 677 (3) [1978] 3 SR 370 to pay any overtime wages for the work taken in excess of its own prescribed rates of wages, the prescription of working hours less than the maximum permissible under the statute would be a facade because thereby the employer would enable itself to increase the working hours without incurring any liability to pay overtime wages. Ordinarily, therefore, where an employer prescribes normal working hours less than the maximum permitted by the statute and if it seeks to take work in excess of its own prescribed number of hours of work, the employer renders itself liable to pay overtime wages at any rate higher than the ordinary rate of wages. As explained earlier, prescribed working hours is the normal time of work and anything in excess of it is overtime work. It was not disputed on behalf of the employer that any work taken for a period in excess of the working hours prescribed by both the appellants-employers would make it obligatory for the employer to pay overtime wages and necessarily that must be higher than the ordinary rate of wages prescribed for normal working hours. This is not in dispute. Both the appellants-employers have prescribed rate of overtime wages at 11/2 time the ordinary wages for the period in excess of the prescribed working hours and up to the maximum permissible under the Act. Both concede that beyond the maximum number of working hours permitted by Sec. 14(1), there is no option with the employer but to pay overtime wages at the rate prescribed in Sec. 31. It is not a case as was sought to be canvassed in Indian Oxygen Ltd. v. Their Workmen(l), where the employer contended that even though it had prescribed total working hours per week at 39 hours and as the establishment was governed by the Bihar Shops and Establishments Act, which permits maximum number of hours of work at 48 hours per week and provides for double the rate of ordinary wages for the work done beyond 48 hours per week, it was not liable to pay any overtime wages at a rate higher than ordinary wages for the excess work taken beyond 39 hours per week and up to the ceiling of 48 hours per week. This Court negatived this submission and held that once the employer fixed hours of work less than the maximum prescribed in the statute, the provisions both as to maximum hours as well as rate of overtime allowance beyond the maximum hours prescribed by the statute has no relevance and cannot be relied upon. But as (1) (1969) 1 SCR 550 the employer has prescribed total working hours at 39 hours per week, any work taken in excess of the prescribed hours of work would be overtime work and that if as contended by the employer, that it was entitled to take any such overtime work at ordinary rate of wages, it would be paying no extra compensation at all for the work done beyond the prescribed hours of work and the company would be in that case indirectly increasing the hours of work and consequently alter its conditions of work. This extreme argument was rejected and the Court upheld the award of the Tribunal that for the `period in excess of the prescribed working hours and up to the ceiling of 48 hours. the employer would be liable to pay overtime wages at the rate of 11/2 times the ordinary wages and dearness allowance payable to them. Let it be noted that court did not interfere with the award by saying that once overtime work is taken irrespective of maximum fixed in the statute, the statutory rate would be attracted. Undoubtedly, therefore, this decision supports the submission that where the employer prescribed working hours per day or total number of hours of work per week less than the maximum permissible under the statute, any work taken in excess of the prescribed hours of work would be overtime work and the employer would be liable to pay some compensation but not necessarily the statutory compensation which would be attracted only when the employer takes work in excess of the maximum hours of work prescribed by the statute.