Full Judgment Text
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PETITIONER:
WORKMEN OF THE CALCUTTA ELECTRIC SUPPLYCORPORATION LTD.
Vs.
RESPONDENT:
CALCUTTA ELECTRIC SUPPLY CORPORATION LTD.
DATE OF JUDGMENT01/05/1973
BENCH:
REDDY, P. JAGANMOHAN
BENCH:
REDDY, P. JAGANMOHAN
VAIDYIALINGAM, C.A.
CITATION:
1973 AIR 2138 1974 SCC (3) 177
ACT:
Industrial Dispute-Overtime wages, rate of-Payment for all
working hours in excess of Prescribed working hours must be
at special rates and not at time rates.
HEADNOTE:
Different categories of employees of the respondent company
had different weekly hours of work prescribed for them. The
weekly hours for some were 48, for others 40 and for some
others 35. Overtime was paid to different categories of
workmen at different rates and was calculated by different
systems. In an industrial dispute between the company and
its workmen the Tribunal held that all employees were to get
overtime for any period in excess of their weekly hours of
work but less than 48 hours a week. at their time rates.
For periods exceeding 48 hours a week all workmen were to
receive, overtime wages at 1 1/2 times their respective
time-rates. In appeal by special leave the appellant
workmen contended that if an employee had to work beyond his
scheduled working hours he should get proportionately more
wages for each of such extra hours.
HELD : The decision of this Court in Indian Oxygen Ltd.
requires payment of overtime wages for all hours in excess
of the prescribed working hours at special overtime rates
and. not at time-rates. In view of this decision, which is
binding, the appeal must be Allowed. Overtime to the
appellants must be paid for at 11/2 times the hourly rate
for all hours of work beyond the scheduled hours and not
merely for hours of work beyond 48 hours in a week. [140H]
[With the consent of the parties the Court further directed
that in respect of the past period overtime payments for
hours of work in excess of the scheduled hours upto 48 hours
should be at 11/4 times the hourly rate which the company
had already paid in terms of the Award].
Indian Oxygen Ltd. v. Their Workmen, [1969] 1 S.C.R. 550.
followed.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1924 of
1968.
Appeal by special leave from the. Award dated January 31,
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1968 of the IInd Industrial Tribunal, West-Bengal, Calcutta
in Case No. VII-65 of 1967 published in the Calcutta
Gazette dated February 29, 1968.
R. K. Garg, S. C. Aggarwala, and Haroobhai Mehta, for the
appellant.
P. P. Ginwalla, Arijit Chauduri, Bhuvanesh Kumari and O.
C. Mathur, for the respondent.
The Judgment of the Court was delivered by
MUKHERJEA, J. This appeal by special leave from an Award
dated 31 January 1968 of the Second Industrial Tribunal,
West Bengal, relates essentially to the manner of
calculation of overtime wages for nonfactory personnel
(including the members of the clerical staff) of the
Calcutta Electric Supply Corporation Ltd. (hereinafter
referred to as the Company). The question that was referred
to the Tribunal for
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adjudication was framed by the Government of West Bengal in
its order of reference in the following manner
"How wages for non-factory personnel
(including the members of the clerical staff)
should be calculated and the date from which
overtime wages for such personnel should be
thus calculated ?"
The Tribunal in its Award directed that the overtime rate
for nonfactory personnel should in no case be less than the
time-rate. The Tribunal further directed that no employee
should get overtime at more than the time rate until he has
completed 48 hours a week but that as soon as he exceeds 48
hours, the overtime rate should be 11/2 timer, the time-
rate. This rate of overtime wages in favour of the non-
factory personnel was directed to be given effect to from 4
February 1967 which was the date of reference. The workmen
of the company have now come on appeal against the decision
of the Tribunal in so far as the Tribunal limited the
overtime wages to the time-rate for any period short of 48
hours a week.
It appears that different categories of employees of the
company have different weekly hours of work prescribed for
them. The weekly hours for some are 48, for others 40 and
for some others 35. The learned Tribunal seems to have been
impressed by the fact that overtime was paid to different
categories of workmen at different rates and that they were
calculated by different ’systems. The Tribunal tried to,
rationalise the situation by providing the payment of
overtime at uniform rates to all employees up to 48 hours a
week : all employees were to get overtime for any period in
excess of their weekly hours of work but less than 48 hours
a week at their time-rates. For periods exceeding 48 hours
a week, however, all workmen were to receive overtime wages
at 1-2 1/2 times their respective time-rates. This is how
the, Tribunal according to the respondent company sought to
establish uniformity in the matter of payment of overtime
wages. The appellants contended that payment of wages for
overtime at the time-rate cannot be taken as overtime
payment at all. If an employee has to work beyond his
scheduled working hours he should get proportionately more
wages for each such extra hour. The respondent tried to
meet this grievance by saying that in some cases the weekly
hours of work were less than 48 only because in the centres
concerned, there was not sufficient work to keep the
employees busy for 48 hours every week. Even so the company
would have been at liberty to fix 48 hours as the weekly
hours of work for all employees. The fact that in the case
of certain employees they fixed a shorter period should not,
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they say, go against the company and they should be allowed
to make the employees work up to 48 hours a week on payment
of overtime wages at the time-rate. It was pointed out that
the award of the Tribunal did not enable the company to get
overtime work without payment of extra wages. All that it
permitted the company to do was to pay overtime wages at the
time-rate up to 48 hours a week, This provision meant that
up to lone point all Workers were placed on the, same
uniform basis. After that point had been reached i.e., to
say for any period of overtime beyond 48 hours a week, the,
employees were to get overtime wages at time-rates.
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The point for decision, in our opinion, is one which is
completely ,covered by the decision of this Court in Indian
Oxygen Ltd. v. Their Workmen.(1) In that case the employees
made various demands of which demand No. 3 was that "the
payment of overtime to office’ staff should be 1 1/2 times
the ordinary rate beyond their normal duty hours". As
regards this demand the contentions urged on behalf of the
appellant company were two-fold. First, that under the
Bihar Shops and Establishments Act the company could be made
liable to pay for overtime ’work at the rate provided in
that Act, viz., at double the ordinary rate when a workman
was asked to work beyond 48 hours per week as provided in
that Act. Therefore, it was argued, the appellant company
could not be asked to pay more than the ordinary rate of
wages payable to workmen if they were asked to work beyond
39 hours but not exceeding 48 hours. Secondly, it was
argued, that if the company were to pay to times its
ordinary rate of wages for overtime it would be paying more
than other similar concerns. This Court rejected both these
,contentions. Shelat J. who delivered the judgment of the
Court made ;the following observations regarding the first
contention :-
"In our judgment both these contentions are
unsustainable. Under the conditions of
service of the company, the "total hours of
work per week are 39 hours. Only workman
asked to work beyond these hours would
obviously be working overtime and the company
in fairness would be expected to pay him
compensation for such overtime work. The
Bihar Shops and Establishments Act has no
relevance to this question as that Act fixes
the maximum number of hours of work allowable
thereunder, i.e., 48 hours a week and provides
for double the rate of ordinary wages for work
done-over and above 48 hours. It is not,
therefore, as if the provisions of that Act
govern overtime payment payable by an employer
where maximum hours of work are governed by
the conditions service prevailing in his
establishment. Therefore, no reliance can be
placed on the provisions of that Act for the
company’s contention that it cannot be called
upon to pay for ,overtime work anything more.
than its ordinary rate of wages if the workmen
do work beyond 39 hours but not exceeding 48
hours a week. It is obvious that if the
company were asked to pay at the rate
equivalent to the ordinary rate of wages for
work done beyond 39 hours but not exceeding 48
hours work a week, it would be paying no extra
compensation at all for the work done beyond
the agreed hours of work. The company would
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in that case be indirectly increasing the
hours of work and consequently altering its
conditions of service."
In view of this decision the matter is no longer res integra
and we are bound by the previous decision. 1 Mr. Ginwala
appearing for the respondent sought to argue that what this
Court had disallowed in the Indian Oxygen Ltd.’s case was
non-payment of extra wages for the extra ’hours of work
beyond the normal Weekly hours until they exceeded 48 hours
of work per week. It was argued that the real ratio of the
deci-
(1) [1969] 1 S.C.R. 550.
141
sion in that case was that the workmen should be entitled to
overtime wages only for a period in excess of the prescribed
monthly workings, hours. This is not, in our opinion, a
correct construction of that decision where this Court
clearly referred to the rate of payment for the extra hours
of work. We, have no doubt in our mind that the decision in
that case requires payment of overtime wages for all hours
in excess of the prescribed working hours at special
overtime rates and not at time-rates.
In this view of the matter we felt inclined to allow the
appeal and to set aside the Award of the Tribunal and to
direct that overtime is to be paid for at 1 1/2 times the
hourly rate for all hours of work beyond the scheduled hours
and not merely for hours of work beyond 48 hours in a week.
This was to apply as from the date of our order. It was,
however, represented to us on behalf of the company that in
respect of the period between the date of the Award and the
date, of our judgment, the total amount involved as a result
of this increase proposed to be sanctioned by us in overtime
rate will be about Rs. 60 lakhs which the company, we were
told, has not the capacity to pay. This might have
necessitated. a remand to the Tribunal on the question of
capacity but the counsel for both the parties have in order
to _avoid any delay in the disposal of the matter agreed-
very rightly and properly, ’in our opinion, to a
suggestion made by us that in respect of the past period
overtime, payments for hours worked in excess of the
scheduled hours up to 48 hours should be at times the hourly
rate instead of the hourly rate which the company has
already paid in terms of the Award. The arrears will be
paid by 12 equal instalments over a period of 2 years. We
therefore order accordingly. The parties will pay and bear
their own costs.
G.C.
142