CLOTHING FACTORY NATIONAL WORKERS UNION AVADI MADRAS Vs. UNION OF INDIA
LAWS(SC)-1990-4-51
SUPREME COURT OF INDIA (FROM: MADRAS)
Decided on April 20,1990

CLOTHING FACTORY,NATIONAL WORKERS UNION,AVADI,MADRAS Appellant
VERSUS
UNION OF INDIA Respondents


Referred Judgements :-

UNION OF INDIA VS. G M KOKIL [DISTINGUISHED]



Cited Judgements :-

FOOD CORPORATION OF INDIA VS. UNION OF INDIA [LAWS(CAL)-2009-7-78] [REFERRED TO]
FOOD CORPORATION OF INDIA VS. UNION OF INDIA [LAWS(CAL)-2009-7-81] [REFERRED TO]
P H KADAM VS. M A DESHPANDE [LAWS(BOM)-1995-1-46] [REFERRED TO]


JUDGEMENT

Ahmadi, J. - (1.)Special leave granted.
(2.)The workmen of the Ordnance Clothing Factory, Avadi, Madras are represented by the petitioner / appellant Union. The workers of the factory are divided into two categories, namely, (i) day workers and (ii) piecerated workers. The day workers are paid wages in the time scale of Rs. 260-400 on the basis of their actual attendance whereas the piece-rated workers are paid on actual output or production calculated on the basis of time required for making the item by multiplying the same by the hourly rate worked out by dividing the mean of the time scale by monthly working hours e.g., Rs. 330-195 hurs = Rs. 1.69 (Rs. 330/ - being the mean of the time scale of Rs. 260-400 and 195 hours being the total monthly hours).
(3.)The appellant-Union contends that the daily normal working hours of the workmen are 8 during the week except on Saturdays when the working hours are 4-3/4 only. Thus the total working hours during the week come to 44-3/4 hours. If the piece-rated workers are required to work beyond the aforesaid normal working hours they are entitled to overtime wages under Section 59 of the Factories Act, 1948. That section, insofar as is relevant, reads as under:
"Section 59(1) - Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of over-time work, be entitled to wages at the rate of twice his ordinary rate of wages."
This sub-section postulates payment of extra wages at twice the ordinary rate of wages for those workers of the factory who are required to work for more than 9 hours in a day or for more than 48 hours in a week. The appellant union filed a Writ Petition No. 2356 of 1985 in the High Court of Madras praying for an appropriate writ or direction to the respondents to pay the piece-rated workers extra or overtime wages at the rate prescribed by Section 59(1) if the total working hours of any workman exceeded 44-3/4 hours in a week. The appellant-union contended that the piece-rate system was introduced sometime in 1963 and since then the piece-rate workers were paid overtime wages accordingly for work done beyond the normal working hours but the same was abruptly discontinued from 1983; so much so that they were even denied the wage at the normal rate for work done beyond 44-3/4 hours and up to 48 hours, i.e., 3-1/4 hours. It is, however, admitted that if the workmen are required to work beyond 48 hours in a week, they are paid extra wages in accordance with section 59(1) of the Factories Act. Thus the controversy is in respect of the rate at which piece-rate workers should be paid wages for the work put in between 44-3/4 and 48 hours in a week. The workers claim they are entitled to extra wages for these 3-1/4 hours at double the normal rate in accordance with Section 59(1) of the Factories Act. In support reliance is placed on the Ministry of Defence letter No.F.8(5)/56/D(Civ.II) dated 1st September, 1959 which inter alia provides that in all cases where overtime pay is admissible to civilian personnel, both under the provisions of the Factories Act and Departmental Rules, the overtime pay should be calculated as under:
(1) For work in excess of normal working hours and up to 9 hours on any day or 48 hours in a week, overtime will be paid at the rate prescribed in the departmental rules. For calculation of overtime pay under this item only basic pay and Dearness allowance shall be taken into account.

(2) For work in excess of 9 hours on any day or 48 hours in a week overtime will be paid at the rates prescribed in the Factories Act. For calculating overtime pay under this item total pay including all allowances will be taken into account.
By a subsequently communication dated 13th February, 1963 the Ministry clarified that having regard to the revision of piece work rates effected in the Ordinance Factories correlating them to the monthly scales of pay sanctioned by the Ministry's letter dated 16th January, 1954, the distinction between High Paid and Low Paid piece workers stood abolished and keeping in mind the Ministry's letter dated 1st September, 1959, the President was pleased to sanction the following methods of calculation and payment of overtime to piece-rate workers:
(i) Piece workers under P and A Regulations Part I 1923.

(a) No overtime will be admissible for working overtime in the day shift. But for the purposes of distribution of P.W. profits, the time wages element in respect of overtime up to 9 hours per day or 48 hours a week will be determined at the rate of P/200 per hour, where 'P' represents the monthly basic pay and dearness pay where admissible.

(b) An extra 1/2 hour pay calculated at the hourly rate of 1/200 of the monthly basic pay or the monthly basic pay and dearness pay, where admissible, for every hour of systematic overtime worked on the night shifts in addition to their piece work earnings.

(ii) Piece workers under the Factories Act
For each hour of overtime excess of 9 hours on any day or 48 hours in a week a piece worker will be 1/ 200 of the monthly basic pay plus 25% of basic pay plus twice all allowances. In other words, if 'P' represents the monthly basic pay and 'D' stands for all allowances such as dearness allowance, house rent allowance, compensatory (city) allowance, overtime for each hour will be P/200 + 1/4 P/ 200 + 2D/200 This, order was directed to take effect from 1st March, 1954. Thereafter, by a corrigendum issued on 21st October, 1965, sub-paragraph (1) of the Ministry's letter of 1st September, 1959 was directed to be substituted w.e.f. 2nd July, 1965 by the following:
" 1. For work in excess of normal working hours and up to 9 hours on any day or 48 hours in a week, overtime will be paid at the rate prescribed in the departmental rules. For calculating overtime pay under this item, basic pay, dearness allowance, special pay, personal pay, pension (to the extent taken into account for the fixation of pay) in the case of re-employed pensioner and city compensatory allowance shall be taken into account. House Rent Allowance, conveyance allowance, travelling and daily allowances, permanent travelling allowance, clothing allowance, uniform allowance, washing allowance and children education allowance shall not be included."
But by a Circular No. 1823 / LB dated 2nd February, 1983 it was stated that orders had since been received from the Ordnance Factory Board 'to stop payment of Departmental Overtime when piece workers work beyond normal working hours and up to 9 hours a day or 48 hours a week. It was further clarified that they would be entitled to piece work earnings only for the period they work extra hours. Thus the payment of departmental overtime for January, 1983 in February, 1983 was stopped. However, with regard to workmen of the Ordnance Factories and other industrial establishments under the Defence Ministry governed by the Factories Act, it was laid down by the communication dated 11th September, 1987 that such workmen shall be entitled to overtime allowance at time rate for work done in excess of prescribed hours and up to 48 hours a week, in accordance with Ministry's O.M. dated 25th June, 1983, but it was clarified that the time rate of wages will be calculated with reference to pay in the revised scale w.e.f. the date the worker has been brought on the revised scale introduced from 1st January, 1986. In the light of the above, the appellant-union contends that as the prescribed hours of work were 44-3/4 hours per week, the workmen were entitled to overtime wage or allowance for work done beyond 44-3/4 hours and up to 48 hours a week at double the ordinary rates, which has been wrongly and illegally discontinued.
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