Employer is Liable to Pay Overtime not for All Employee

Employer is Liable to Pay Overtime not for All Employee

Bombay High Court Union Of India And Anr. vs B.D. Rathi And Ors. on 26 April, 1962

Equivalent citations: AIR 1963 Bom 54, (1962) 64 BOMLR 676, 1962 (5) FLR 435, ILR 1962 Bom 830

The employees applied to the Authority alleging that they worked for 51 hours a week, although according to the provisions and rules framed under the said Act they were required to work only for 48 hours during a week; thus they have worked overtime for three hours per week, and hence they were entitled to extra wages payable as per rules framed under the said Act for the overtime work done by tem during the period beginning with 1-4-1952 upto the date of the applications. It is common ground that the employees are monthly rated employees, and that they are workers in a scheduled employment.

These applications were opposed by the Central Railway on the ground that the Authority had no jurisdiction to entertain claims prior to 1957, and that the Minimum Wages Act, 1948, was not applicable to the employees-applicants, as these employees are entitled to remuneration as per Prescribed Scale of Pay and Hours of Employment Regulations of Central Railway, from the moment they are brought on monthly rates of pay.

It was not disputed before the Authority, nor before us, that the employees concerned are railway servants whose employment is "continuous," and their cases fall under Rule 5 of 'Railway Servants (Hours of Employment) Rules 1951.' The point that was urged before the Authority was that the rules framed under Section 71E of the Indian Railways Act provide for the remuneration, i.e., wages, payable to employees, including wages for overtime work, the employees concerned are governed by these rules, and hence the provisions of the Minimum Wages Act, 1948, and rules framed thereunder do not apply to the cases of these employees.

The Authority over-ruled this contention

 It was also urged before the Authority that in view of Rule 32 of the Minimum Wages (Central) Rules, 1950, the provisions of the Minimum Wages Act did not apply.

This contention also was over-ruled.

In view of these conclusions, the Authority held that the employees-applicants were entitled to the benefits conferred on them by the Minimum Wages Act, and were entitled to claim wages for overtime work as provided by the said Act, and rules framed thereunder. It is against this decision that these Special Civil Applications are preferred to this Court under Article 227 of the Constitution.

Article 227 of the Constitution confers on every High Court the power of superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction excepting any court or tribunal constituted by or under any law relating to the armed forces.

The main question for consideration is: what is the liability of the employer, in view of the provisions of the Minimum Wages Act, 1948 ?

Section 2(h) defines "wages" and that definition indicates that the expression "wages" includes all remuneration capable of being expressed in terms of money payable to an employee, but it excludes certain items mentioned in the said definition. This definition makes it clear that the expression "wages," as used in the said Act includes not only the basic wages, but also other types of remuneration included in that definition. Section 3 casts a duty on the appropriate Government to fix the minimum rates of wages. Section 3 Sub-section (2) reads thus:

"The appropriate Government may fix,
(a) a minimum rate of wages for time work (hereinafter referred to as "a minimum time rate");
(b) a minimum rate of wages for piece work (hereinafter referred to as "a minimum piece rate");
(c) a minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis (hereinafter referred to as "a guaranteed time rate");

(d) a minimum rate (whether a time rate or a piece rate) to apply in substitution for the minimum rate which would otherwise be applicable, in respect of overtime work done by employees (hereinafter referred to as "overtime rate")"

Section 3 Sub-section (2) thus makes it clear that the expression "wages" consists of component parts, one of which is 'overtime rate.' Section 3 Sub-section (3) makes it clear that the fixation of minimum rates of wages would be in relation to the factors mentioned in that sub-section, such as different scheduled employments, different classes of work in the same scheduled employment, adults, adolescents, children and apprentices, and different localities; so also the fixation of minimum rates of wages would be with reference to the period of work, viz. by the hour, by the day, by the month, or by such other larger wage period as may be prescribed by rules under the said Act Section 4 provides inter alia that the minimum rate of wages fixed or revised by the appropriate Government shall consist of not only the basic rate of wages with or without the cost of living allowance, but also of the cash value of the concessions in respect of supplies of essential commodities at a concession rate where so authorised. Thus the cost of living allowance and the cash value of the said concessions are to be computed while fixing of revising the minimum wages.

Section 5 lays down the procedure for fixing and revising minimum wages. Sections 7 to 9 provide for Advisory Board, Central Advisory Board, composition Committees, etc. to help and advise the committees mentioned in Section 5 and the appropriate Government in fixing and revising minimum wages. Section 11 lays down that minimum wages shall be payable in cash unless otherwise provided for. Section 12, which is material for the determination of the question arising in these applications, lays down the liability of an employer. Relevant portion of that section reads thus:

"12. Payment of minimum rates of wages. (1) where in respect of any scheduled employment a notification under Section 5 is in force, the employer shall pay to every employee engaged in a scheduled employment under him wages, at a rate not less than the minimum rate of wages fixed by such notification for that class of employees in that employment without any deduction except as may be authorised within such time and subject to such conditions as may be prescribed."

"14. Over-time - (1) Where an employee, whose minimum rate of wages is fixed under this Act by the hour, by the day or by such a longer wage-period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or for part of an hour so worked in excess at the overtime rate fixed under this Act or under any law of the appropriate Government for the time being in force, whichever is higher."

It is clear that from the wording of Section 14 that section imposes liability on the employer to pay the employees wages for the overtime work done by them at the rate fixed under the provisions of the said Act or under any law of the appropriate Government for the time being in force, whichever is higher.

This section makes it clear that the employees doing overtime work are entitled to get wages for the overtime work either at the rate fixed under the provision and rules of the said Act, or under any other law of the appropriate Government, if such wages fixed by the latter law are higher than those fixed by the former one.

Section 22 lays down penalties for breach of some of the provisions of the said Act by employers. For example, if an employer pays less than the minimum rates of wages fixed according to the provisions of the said Act, he will be liable to punishment; so also if he contravenes any rule or order under Section 13, he will be liable to punishment as provided by Section 22. Section 22A provides for punishment for contravention of those provisions of the said Act, which are not covered by Section 22. Section 25 reads thus:

"25. Contracting out.- Any contract agreement, whether made before or after the commencement of this Act, whereby an employee either relinquishes or reduces his right to a minimum rate of wages or any privilege or concession accruing to him under this Act shall be null and void in so far as it purports to reduce the minimum rate of wages fixed under this Act."

It is clear that Section 25 is intended to secure for scheduled employees minimum wages as prescribed by the said Act, and hence may contract by which an employee agrees to relinquish or reduce his right to get minimum rate of wages is declared void. These are the provisions of the Minimum Wages Act, 1948, with which we are concerned.