Workmen of The Calcutta Electric
Supply Corporation Ltd. Vs. Calcutta Electric Supply Corporation Ltd.  INSC
106 (1 May 1973)
REDDY, P. JAGANMOHAN REDDY, P. JAGANMOHAN
CITATION: 1973 AIR 2138 1974 SCC (3) 177
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.
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
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,  1
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1924 of 1968.
Appeal by special leave from the. Award dated
January 31, 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 139 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 non factory 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, 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
140 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 there under,
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
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 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 decision - (1)  1 S.C.R. 550.
141 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 installments over a period of 2 years. We
therefore order accordingly. The parties will pay and bear their own costs.