Overtime Allowance Calculation: HRA, TA, SFA Inclusion Mandated by Supreme Court Affirmation.

The applicants, employees/retired employees of Small Arms Factory/Field Gun Factory, Kanpur, sought the inclusion of House Rent Allowance (HRA), Transport Allowance (TA), and Small Family Allowance (SFA) in the calculation of Overtime Allowance (OTA).

This claim was based on Section 59(2) of the Factories Act, 1948, and supported by a judgment of the Hon'ble Madras High Court in W.P. No. 609/2011.

The respondents initially rejected their claim via a speaking order dated April 17, 2025, citing the pendency of a Special Leave Petition (SLP) before the Hon'ble Supreme Court.

Subsequent representations from the applicants on March 3, 2025, and April 15, 2025, requested reconsideration in light of evolving judicial pronouncements.

On January 20, 2026, the Hon'ble Supreme Court decided Union of India & others vs. Heavy Vehicles Factory Employees’ Union & another (Civil Appeal Nos. 5185–5192 of 2016), affirming the Madras High Court's judgment on this issue.

1. Whether the respondents should be directed to grant the benefits of HRA, TA, and SFA in the calculation of Overtime Allowance and pay arrears with interest.

2. Whether the Speaking Order dated April 17, 2025, should be quashed.

3. Whether the respondents should be commanded to consider the applicants' representations dated March 3, 2025, and April 15, 2025, in light of judgments from the Hon'ble Madras High Court, other Tribunals, and affirmed by the Hon'ble High Court and Hon'ble Supreme Court.

The primary legal principle concerns the proper calculation of Overtime Allowance under Section 59(2) of the Factories Act, 1948, which the Hon’ble Madras High Court interpreted to include HRA, TA, and SFA.

This interpretation was affirmed by the Hon'ble Supreme Court in Union of India & others vs. Heavy Vehicles Factory Employees’ Union & another (Civil Appeal Nos. 5185–5192 of 2016), decided on January 20, 2026.

The Tribunal noted that the respondents' initial rejection of the applicants' claim, articulated in the order dated April 17, 2025, was solely due to the pendency of a Special Leave Petition before the Supreme Court.

Crucially, the Supreme Court has now delivered a final judgment in Union of India & others vs. Heavy Vehicles Factory Employees’ Union & another on January 20, 2026, affirming the Madras High Court’s ruling that HRA, TA, and SFA should be included in OTA calculations.

Given this development, the learned counsel for the respondents expressed no objection to a direction requiring the competent authority to consider the applicants' grievance in light of the Supreme Court's decision.

The Tribunal, therefore, found that keeping the Original Application pending would serve no fruitful purpose, as the legal uncertainty that previously justified the rejection had been resolved.

The Tribunal directed the respondents to consider the applicants' representations dated March 3, 2025, and April 15, 2025, in light of the Hon’ble Madras High Court’s judgment in W.P. No. 609/2011 and connected matters, as affirmed by the Hon'ble Supreme Court in Union of India & others vs. Heavy Vehicles Factory Employees’ Union & another dated January 20, 2026.

The respondents were ordered to pass a reasoned and speaking order in accordance with law within three months from the receipt of a certified copy of the order, and to communicate the decision to the applicants forthwith.

The Original Application stood disposed of, with no order as to costs.