Supreme Court declines the right of Government employees to claim double overtime allowance under the Factories Act, of 1948

Introduction:

The Supreme Court of India in its recent Judgement, Security Printing & Minting Corporation of India Limited v. Vijay D. Kasbe held that Government Employees cannot claim double overtime allowance under Section 59 (1) of the Factories Act, 1948 as they are civil position holders and can’t be equated to a Factory Worker. The Judgement was the result of an Appeal filed by the Security Printing & Minting Corporation of India Ltd. challenging the order, of the Bombay High Court, which allowed the government employees to claim overtime allowance.

Facts:

The Ministry of Finance incorporated its nine production units of Currency Manufacturing into a company named Security Printing & Minting Corporation of India Ltd. All the Assets and Liabilities including the litigations were transferred to the Company (including the one on hand).

In 1988, a Special Officer (Currency & Coinage) issued an order directing that the shop floor and the ministerial staff under the category of non-gazetted supervisory staff would be compensated for extended hours of work at certain rates i.e., for overtime allowances. Further, the Government of India clarified that the staff whose basic pay exceeded the ceiling limit of Rs. 2,200/- per month will not be entitled to any overtime allowance.

In 1988, a group of eight supervisory employees approached the Bombay High Court to claim the overtime allowance. The Court transferred the petition to the Central Administrative Tribunal and the tribunal dismissed the petition by stating it does not have jurisdiction. Further, another group of Supervisory employees (AK Biswas and Others) approached the Central Administrative Tribunal[i] to claim double overtime allowance and their petition was also dismissed by the Tribunal.  Both these orders of the Tribunal were challenged in the High Court and the Court remanded the matter afresh to the Tribunal. With a fresh hearing Central Administrative Tribunal held that the batch of writ petitions filed by AK Biswas and Others shall not be allowed to claim double overtime allowance but for the other batch of writ petitions (filed by the eight employees in 1988), it was stated that they shall be allowed to claim double overtime allowance.  

These two orders were again challenged at Bombay High Court and by a common order the Court upheld that for the writ petition filed by AK Biswas and Others, they shall be allowed to claim the double overtime allowance and for the writ petition filed by the Corporation, against the order of the tribunal which allowed the claim of double overtime allowance, shall be dismissed. Thereby, against this common order passed by the High Court, the Corporation has come up with the appeals.

Issues:

Whether persons employed as Supervisors are entitled to Double Over Time Allowance under Section 59(1) of the Factories 1948 Act?

Submission(s) by Appellants:

It was submitted by the Appellants to the Court that a perusal of the list of duties assigned to the Respondents clearly shows that the respondents were performing supervisory duties, exercising control over 50 to 100 workers. Further, it was contended that the employees falling under the definition of Rule 100 of 1963 Rules (which defines the scope of the ‘position of supervisors’) can’t be considered for overtime allowance under Section 59(1) of the Factories Act, 1948 and in the present factual matrix the employees do fit in the definition of ‘position of supervisors’. Thereby, they are supervisors and enjoy higher scales of pay than workers, and can’t claim the benefit of overtime allowance as extended to workers.

Submission(s) by Respondents:

The claim of the Appellants was contested by the Respondents by stating that the respondents are performing manual labour or clerical work as a regular part of their duties and, hence, Rule 100 of the 1963 Rules has no application. Further, it was contended that the Tribunal had itself passed an order in favour of employees, identically placed for and working as supervisors, by allowing them to claim Over Time Allowance (in the case of the batch of the writ petition filed by eight employees). Thereby, in the present matter as well the employees shall be granted the right to claim overtime allowance under Section 59(1) of the Factories Act, 1948.

The decision of the Supreme Court:

The Court upheld that, since the employees were central government employees, their claim of double overtime allowance is related to ‘service matters’ of an employee as defined in Section 3(q) of the Administrative Tribunals Act, 1985. Further, the Court stated that the appointment either to a civil post or in civil services of the Union or State is not governed strictly by a contract of service or solely by labour welfare legislation but by statute or statutory rules issued under Article 309 of the Constitution of India or its provision.

The court was of the view that workers employed in factories are different from the ones who are employed as the holders of civil posts or in the civil services of the Union. Moreover, the civil post holders are required to place themselves at the ‘disposal of the government’ all the time in accordance with Rule 11 of Fundamental Rules of and Supplementary Rules. Further, the Court was of the view that the High Court and the Tribunal completely lost sight of those Rules and the distinction between employment in a Factory and employment in Union or State Services. Thereby, the Court upheld that the civil post holders can’t be equated to factory workers and they can’t claim the benefit of Double overtime allowance as given to a factory worker.

The Court further directed that in the present matter, the nature of employment of the employees was ‘Supervisory’ and the manual work which the employees performed was incidental or ancillary to their main work. Hence, Rule 100 of the 1963 Rules will be applicable as they hold the ‘position of supervision’ and the Government employees will not be able to claim the overtime allowance under Section 59(1) of the Factories Act, 1948.

Conclusion:

Thereby, the Court declared that in the present matter, government employees can’t be equated to factory workers as they are employed under the Civil services of the Union and while adjudicating the matter the High Court should have tested the claim of the respondent to see whether it is an attempt to get the ‘best of both the worlds.’ Further, for the present matter, the Court upheld that the nature of the work of the employees was of supervisory nature and thereby they cannot claim overtime allowance under Section 59(1) of the Factories Act, 1948.

Read the complete judgment here.


[i] Original  Application No. 26 of 2000, CAT


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