PHILIPS INDIA LTD. v. LABOUR COURT, MADRAS & ORS.
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- Court
- Supreme Court of India
- Decided
- (year only)
- Citation
- [1985] 3 S.C.R. 491
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Headnote — Supreme Court Reports (editorial summary, not part of the judgment)
Allowing the appeals, the _Court 1.H ·
Held
I.I A b~re perusal of S<Xitio~ \4(\) ~f \h~ 'J"ainilnadu · Sho?§
Reporter's headnote (continued) and case details
PHILIPS INDIA LTD.
LABOUR COURT, MADRAS & ORS.
26th March, 1985
[0.A. DESAI AND V. KHALID, JJ.] c The Tamil Nadu Shop< and Establishments Act, 1947, Sections -14(]) amJ r 31, interpretation of-Construction of a statutory prqi·isiOn-Can'!n of c:_on_s~ truction Ex viSceribus actus-Words and phrases-Meaning of'~over tim_e·~, ''no such person,", ''such es_tabUshment", "rate of over.time. wages", o_ccurr(ni in Section 14(1) and 31-Where the employer prescribes working hours. l~sS .than _the _maximum permissible. ill .the statute, whether he .i~ obliged to pay .the 'stattitorily. prescribed r.ate .and not .the rates of overtime charges agreed. upon, }n respect of~o_rk do~e in.excess of the number ofwe~kly working hours pres, cribed by the employer and upto the lUlmber of statutorily perm.itted week{y working hours of 48 hOurs.
Under' Secti~n 14(1) of the Tamil Nadu Shops and Establishm~nts Act, 1947, ·"n6 persorl employe"- in .any establishment shaU be required o_r anowe~ E to work ·for m·ore th<i.Q ._e_iglit hours in any day forty-eight hours in.·any we~k, and ·under Sectiori 31 .., Where any persOn employecl i,n any establishrn~.O~-:~S ~quired ~o work ove~time, he shall be entitled~ in respect _of suc.h -oY'ej:ti~~ work, to _wag~s at_ twic~ the. ordiriary rate of wages;" · ·
In the establishment of Philips ·India ·Ltd. which Switched over ·io fiVe ·days ·of week, with effect fron:i ·March ·29, 1965 the total nUmb~r of· ·working .hours· per week· was· flxed at 39 J19urs with. a d8.i1y worl_d_ng ~Jiouf of 7-3/4 houfS --from -Monday through Thursday and 8 hours ott Friday. ·The · compai:iy' -ats& .·iDtrodticed ·the rate. of' overtime· payment ai lf iime -the 'ol-dinary wig-es fol- --Work dorie. over ·and- aboVe the rTiaximum number of working noUfs Per week . -as well - -Rs· for working -on ·ho1idayS. ·This rate ·was admisSible fOf overtlffi"e --'Work don_e beyond .39 ho1:1rs per week ·but this was subject jo in important ..condition that ·whenever the· total working ·hours exceed ~ither 8 hours per qay or 48 hours per week,· the employees were entitled to over time 3.t tWice the ordinary wages as mandated by Section 31 Or the Act. In the establishment of the State Bank of India which is·governed by ihe Desai Award, the daily working hours from Monday to Friday was 6-1/2 hours a day arid 4 hours on Saturday. tota1Iing a weekly 36-1/2 hours. The.rate.of overtime allowance was 1-1/2 times the wages for every quarter of an hour of overtime work done : .for -which P8:yment h~ve '.lo .b~ m~de..
492 SUPREME COURT REPORTS [19~5] 3 S.C.R.
Claim petitions were filed by the employers of Philips India Ltd., and the State Bank of India before different Labour Courts under Section 33(c)(2) of the Industrial Disputes Act, 1947· inviting the Labour Court to compute the monetary benefits in respect of overtime allowance for the work done beyond the prescribed hours of work pe~, week in terms of section 31 of the Act, ~- Their contention was that they were entitled to overtime wages at double the rate of ordinary wages for work done in excess of 39 hours/36-1/2 hours a B week.
Though the matters were before tWo operate Labour Courts and were decided at different intervals, both the Labour Courts held that Section 14 of the Act does not prescribe number of working hours per day but it mere1y specified maximum number of working hours that can be introduced by an employer in an establishment governed by the Act. But once the employer chooses to prescribe working hours per day or total number of working hours per week Jess than permissible under section 14, the rate of overtime allowance as pi'escribed in section 31 would be applicable to the workmen notwithstariding the fact that the prescribed nun1ber of working· hours per day Or total number of work.ing hours per week were less than the maximum which · the statute permitted. Accordingly, both the Labour Court$ computed the monetarY benefits by granting overtime allowance at the rate of double the ordinary wages and the difference between what was p3.id by th~ employer in each case at 1·1/2 times the ordinary wages and what becam·e pa)table ·as pet the Courts order was di re-cted to be paid to each employee, .. Aggrieved thereby, the company and the Bank filed in aJI five writ petitions questioning the correctness of the said decision. Due to a conflict .·~ of opinion in the matter of interpretation of Sections 14 and 31 by two earlier deciSions· of the Madras High Court, the matter was referred to a Division BCnch. The High Court called in aid Section 50 of the Act to observe that if lhe existing right and privileges of an ernployee in any establishment are moie favourable to him than those created by the Act, the same were preserved and held ; (i) that once the employer prescribed daily working hours as well as the weekly total, work rendered in excess of the prescribed working hours would ;C.onstitute overtime work aad when the statute prescribes the rate of overti111e ·Work, it is obligatory upon the employer to make payment . at the statutory rate-; (iij -that even if Section 14(1) was interpreted as prescribing normal • '..wofkh1g hourS and that work in excess of the normal working hours so pr~· "sC.ribed. woUld constitute overtime Which would attract Section 31, yet once the .Crilployer prescribed. hours less than the statutorily permissible working hour!), :ailY Work donC beyond the prescribed working hours would be overtime V'Ork and the raiC of overtime work should be governed by Section 31 of thC Act. :'Tlie High Court accordingly dismissed a1l the petitions. ,. HenCe the appeals by special leave.
- - ·"'. •_ j. - I .PHILIPS INDIA V, LABOUR COURT. 493 .. ...- ~
., arid EStabtishment~ Act, - shows.· that it prescribes a ceiling on w9~king h~u~~· t Ob\o·iously7 it cannot be interpreted to mean that .the employer .. must· P,r.ovid~J maximum number of· working hours· as thCrein set out in the establishment. governed by the Act .. It is open to the·employe~ ·to pre~ribe .working. hOur~~:. fQi a·· day and total number Of working hours for a week less than the ceiliflg prescribed by the statute. Section 14 puts an embargo on the employers• right
. tQ prescribe working hours beyond therein prescribed subject however, to its ua.bility to pay higher fite Of Wages foi the overtime work. done. :. '[sooB-C] I • . •
1:2The prOvisO to Section 14(1) makes it very clear• that1 the ._upper_. Ilinii fixed.by the substantive ProviSion can be exceeded upto the ceiling fixed"' by the Proviso and not beyond in any case •. · This is a prohibition, in· public"'. inierest for S.ifegua"rding the health which may be adversely affected ·by fatigue,· stress and strain consequent upon continuous work daily or for total ·number: of hours in a week. This simultaneausly ensures a v.·eekly off day even if the employer prescribes number of working hours as provided in Section 14(1). [500D-E]
1.3 Section 14(1) upon its true construction permits an eIDptoYer ~t~ prescribe daily workiilg hours not exce"eding 8 ·ho~rS a day and tOtal number· · of working hours at 48 in a week. By the proviso the employer can take overtime work and that the bar imposed by sub-section (1) of Section 14 may be breached to the extent provided in· the prOviso, if the workin"g hours do not exceed 10 hours in any day and total number of working hours at 48 in a week. 8 hours a day and 48 hours in a week would constitute normal working hours. Anything in excess of 8 hours a day but not exceeding IO _hours a day · and 48.hours a week and not Cxceeding 54 hours a week. will ConStitute over; E time. (500E-GJ
2.1 · The expression used in Section 14(1) is "no such person". meaning \he~tiy th3.t person, W~o wou1d be required to work s hOurs a· day Or 48 hou.rs a 'Yeek, may be ·allowed to work 'in e:x:CC:ss of "that. limit subject tO p·aynieut of overtime wages, [500fl). . . . ' .. '. ., . •:, .· 1 . -i.2 .The.~xpre;s.iO~ "such persOn° ..in the· pro~iso _to S~tio~ 14 ,_ rC.feis to. persOn who.is required 'to w'ork rOr s hourS .a day and 48 'h0urs a_ wCek. ·-,' ··1 · · · · · ··.·.' .Jso:1i1 . \ ,,
·.-·· - · ·2.3 The expression "such establishment"; in the Proviso 'to Se~ii~~ -~J4 would indicate that estabt:shment whicbrhas prescribed the working hours as .set outjn the main part of the section namely, 8 hours a day and 48 ,hours in ,a Week•. .Jn __ such an Csi:ablishment QVertime .wOrk for 'Such a person would_ o~y · be that.Work Which: would ,be·. done. in· excess ·or (ither 8 hours a·aay··or. _48 .hours a week •.. Such overtime.work haS to .be compeDSated ;at twice· the-· O[di· ·a·ary-rate ·of.wages prCscribed in Si:Ction· 31.- ·[502C-D] - · 1 · •• • ~-:·, ____ · . -· -· ' - . .. ,. . •' .. '" •' .:~
.~,"' . 2.4.~~ . The_ expression '~such ~ye~ime~· c~n .refe~ to~~~~ . c~n,tfmpl:it~ci :. by ,:Ji the provis9 10 Se'\igq !4(1) 'Ill~ P.9 91~~{·-. R~adin~ S°'ti~piJ4 ~d io$eth;r ·.n ' ' .·-
49<* SUPREME COURT REPORTS (1985) 3 S.C.R.
a scheme emerges. The statute first puts an embargo on the power of the employers to prescribe normal working hours, not exceeding 8 hours per day and 48 hours per week. The proviso makes it obligatory to pay overtime wages for work in excess of the prescribed hours as set out in Section 14(1). [502D-E)
2.5 The employe_r would ordinarily prescribe wages for normal working hours. Once the wages for normal working hours per day and cumulative ·for the week or month are prescribed, they would be styled as ordinary rate Of .wages. T-hus the employer will be liable to pay to the employee wages at the ordinary rate of wages for prescribed hours of work as permissible in Section 14{1) and whenever he takes work in excess of the prescribed hours of work the rate for overtime work prescribed by Section 31 would come into play. [502F-G)
3.1 The canon of statutory construction is that the statute must be read as a whole. This is a general rule applicable to all statutes and known as "construction ex visceribus actus or the "elementary rule" or "settled rule". The onlY recognised exception to this well-laid principle is that it cannot be ,, ca::Ued in aid to alter the meaning of what is of itself clear and explicit. D [503A-BJ
Attorney General v. HRH Prince Earnest Augusts, [1957) 1 All E.R. 497 quoted with approval.
Poppatla/ Shah v. State of Madras, [1953) SCR 677 ; Punjab Beverages E Pvt. Ltd. v. Suresh Chand, [1978) 3 SCR 370 referred to.
It is undoubtedly true that Section 14(1) does not prescribe normaJ·hours .of work but merely,puts an embargo on the employers' right to prescribe daily !and.weekly hour~ of work beyond pe'rmissible under the statute. But where
• the statute itself prescribes such permission hours of work and also makes it obligatory to pay overtime wages and prescribes rates, it can only mean work F Jp :excess of the maximum hours of work permissible under the statute which alone wOuid attract the rate of payment for overtime work. "Such overtime .work" in S~tion 31 would and would only mean ove~time as understood in ' the proviso to Section 14(1) which has reference to maximum hours of work pennitte.d by Section 14(1). This is how the statute has to be read as a whole. . . . ' [506D-F) G 3.3 Applying this wetl-la\d canon ~f construction, the expression "rate of overtime wages" in Section 31 has to be understood and interpreted in the light of the provision contained in Section 14(1) read with its proviso; By reference to the statutory provisions an.d unhampered by precedents, it becomes clear that when normal working hours as permitted by Section 14(1) are pres· cribed by establishment for his employees working in the establishment to which the Act ·.applies, wages for work in ·.excess of such prescribed hours of work wiiI haw to !>C paiil at tiie 111te vresqibed in Se,tipn ?L The fral"ers pf the illlli.IPS rNDIA 11. LABOtiR COURT (Khalid, i.) , 4~! statute provided the whole scheme by first putting an embargo on the maximum .A number of working hours payable at ordinary rates and then permitt~ng over- time work upto the ceiling, simultaneously makin8 it obligatory to pay overtime wages at the rate prescribed in the vety statute:. · [503D-F1
3.4 Where the employer prescribed working hours per day or total number of hours of work per week less than the 'maximum permissible uildcr :;B the statute, in the absence of the dCfi:Oition oft.hat term in ihe Act, iiny work taken in excess of the prescribed hourS Or WOrk would be overtime- work and ·the employer would be liable- to pay· some compensation but not necessarily the statUtorY compensation which would be'attracted o~ly When the. employer takes ·work in excess of the maximum hours of work prescribed bY the stitute. In such a situation the rate of wa8es pay8.ble would be as to what ougbt to. be the rate of wages paYable. Such a rate must be the subject mattet of agree· ment between the parties or an award by: industrial adjudication. Any_. work · taken for a period in excess of the maxifnum· permissible under. the statute Would indisputedly attract the statutory rate of overtime of wages. (506G-H ; 507D)
Indian Oxygen Ltd. v. Their workmen, [1969) l SCR 550, explained and reli~d on. . . · . ·· \;D
AX. Basu v. !CI (India) Pvt. Ltd. and Ors. (1975) I LLJ 239, (Calcutta) ; M/s Carew & Co. Ltd. v. Sailaja Kanti Chatterjee and Anr. (1972] 11 LLJ 359, (Calcutta) overruled. .. {
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 833~34• & E . 835-837 (NL) of 1976. .
From the Judgement and Order dated 4, 4. 1974 of the Madras High Court in Writ Petitions Nos. 2827, 2828/72; 1006, 1007/71. · ·
F.S. Nariman, D.N. Gupta and ,S. Ramasubramanium for the ., , Appellants.
M.K. Ramamurthy, J. Ramamutthy and ·Ambrish Kumar for the Respondents.
Judgment
The Judgment of the Court was delivered by
i KHALID, J. What is the rate of overtime allowance admissible to the-employees of the ·two appellants working their· establishments situated in the State of Tall1il Nadil is \he· .only question -raised in these appeals by special leave 1
t19ssl 1s c.&. . .. (2)M/s Philips'India Ltd. "'the appellant in thdirst batch. of . appe~ls:_a 2onipany incorporated iinoor the Companies Act has an establishment in the State of Tamil Nadu. This establishment is governed by The Tamil Nadu Shops and Establishments Act, 1947 . {'Act'for short). According to the practice followed by the company, :: the e,niployees of the establishment had to.render service for 39 hours ·. a week,. maae up of 7 hours per day from Monday to Friday and 4 · hours on Saturday. Ilffectiv~·from March 29, 1965, when: the com· pany switched ower to five days week, it still ·retained the total num- ' be'r of working' hours per week at 39 by extending· the working hours from Monday to Thursday at 7-3/4 hours and 8 hours on Friday. -~iC . Thus the total working liours per week remained constant at 39. The company ·also introduced the rate' of overtime payment at 1-1/2 time ., the ordinary wages for work done over and above the maximum . number of working hours per week .as. well as .for working on · holidays~ ·This rate was admissible for overtime work done beyond 39 hours per week but this was subject to an important condition that whenever the total worlCing hours· exceed either 8 hours per day or 48 hours per week, the employees were entitled to overtime at tY1.ice the.ordinary wages as mandated by Sec. 31 of the Act.
(3) State Bank of India ('Bank' for short), the appellant in the second batch of appeals, paid overtime allow.ance at the rate as -, :rn awarded by, the National Indus.trial Tribunal (Bank Disputes) popu- . larly known as Desai Award. The Tribunal fixed .the working hours not exceeding 6· l/2 hours a day from Monday to Friday and not exceediµg 4 hqurs a day on Saturday. After thus fixing working hours .;.: '~f 36:li2 'pet week; the Tribunal proceeded to give direction about rafe of overtime allowance admissible to the employees governed ·by award. Modifying the rates as awarded by the Shastri Award, the ·.:Tribunal dir'e\:ted that the rate of overiime allowance would be 1-1/2 times the wages as explained in the relevant portion of the award for every quarter of an hour of overtime work done for which payment ··•has to be made, (See Para 10.46 of the· Desai Award).·
(4) 11 employees of the company filed Claim Petition No. 329/71 'in the Labour Court at Madras under Sec. 33-C(2) of the Industrial Disputes Act, 1947 (l.D. Act for short), inviting the Labour Ctilirt to compute the.monetary benefit in respect of overtime · ' allowance for· the work done beyond the prescribed hours of work .,. per week as· provided in Sec. 31 of th.e Act. In other words, they ···H claimed that in view of the provision contained in Sec. 31 of the Act;
-~HrLl~~ INDIA V. iAttOUR futJRt (KhaitJ, ),) 4§f. the erilployees of the company · wor1dng in the establishment .at Madras are-entitled to overtime wages at double the rate .of ordinary wages for work done in excess of 39 hours pet week and not at l :.J/2 t_imes the rate of ordinary wages as is being done by the company.
· (S) Another Claim Petition No. 306/71 was moved foridenfr cal relief by some other employees of the company. 1J ·, · (6) Similarly three employees of the State Bank of India -filed three separate Claim Petition Nos. 19,20 and 21of1964 before Jhe Central Government Labour Couri, ·Madras praying for, incidental relief on almost identical grounds. In:· other words; they ·claimed overtime wages at double the rate of ordinary wages as prescribed in Sec. 31 of the Act. (7) Though the inatters were. before the ·separat~ ;Labo~r Courts and were decided at different intervals, both the Labour Courts held that Sec. 14 of the Act does not prescribe m,1mber .of · working hours per day but it merely specifies maximum number of working hours that can be introduced.by an employer in an,estabH~)l· ment governed by the Act. But once the employer chooses to pres- cribe working hours per day or total number of working ho11rs per ,- week less than permissible ·uniler Sec. 14, the rate of over:time allowance as prescribed in Sec. 31 would be applicable to the.wor)i:- men notwithstanding tbe fact that the. prescribed number of wofking hours per day or total number of working hours per week were less than the maximum which the statute permitted. Accordingly, boih the Labour Courts computed the monetary benefit by granting -over- time allowance at the rate of double the ordinary wages and the difference .between what was ·paid by the employer in each case at 1-1/2 times the ordinary wages and·what became payable as-per the Courts order was directed to be paid to each employee. : ·. '''·· "
· - (8) The Bank and the company filed in all.five writ petitioi\s questioning the correctness of ·the two common orders made by .the two Labour Courts, 'under Art. 226 of the Constitution in-th.e. High Court of Judicature at Madras. All the five writ petitions came up 'before a learned Single Judge of the Madras High- Court wl)o,~as.of the opinion that there was a conflict in the matter of interpretation 'of Secs. 14 and 3! of the Act in two decisions of the same court being (i) Railway Employees & Co. v. Labour Court (1) a:nd (ii} K.f.V. - . :$ha_ik - ... ·. -..H (!) (!960) II LLJ 215.
s\ii>RilMll eotm.t &ili>o&ts ii 9851 3s.e.11.. A Mohd.. Rowther & Co. v. K.S. Narayanan(') and therefore he referred the petitions to a Division Bench. All the writ petitions were accor- dingly heard by a Division Bench of the same High Court.
(9) The High Court took notice of the fact that the Act does not define overtime work which according to the High Court means work done lieyond the normal working hours in any establishment to which the Act applies. The High Court then proceeded to observe that the proviso to Sec. 14(1) only lays down that overtime wages may be paid for the work done in excess of the normal working hours. The High Court then held that once the employer prescribed daily wor~ing hours as well as the weekly total, work render.ed in excess of the prescribed working hours would constitute overtime work and when the statute prescribes the rate of overtime work, it is obligatory upon the employer to make payment at t'1e statutory rate. Sec. 50 of the Act was called in aid to observe that if the existing rights and privileges of an employee in any establishment are "more favourable to him than those created by the Act, the D fame were preserved. Accordingly, it was held that even if Sec. 14(1) was interpreted as prescribing normal working hours and that work in excess of the normal working hours. so prescribed would constitute overtime which would attract Sec. 31, yet once the emplayer prescribed honrs less than the statutorily permissible working hours, any work done beyond the prescribed working hours would be overtime work and the rate of overtime work should be governed by Sec. 31 of the Act. The High Court accordingly discharged· the rule and confirmed the orders m~de by both I,.abour Courts, Hence these appeals by special leave.
' (10) 1 It is not in dispute that the working.hours in the Bank were ·governed by Desai Award. So also the rate of overtime allowance was ,governed by the Desai Award till the Labour Court ruled to the contrary.. Similarly, the company had prescribed its own working hours and provided for its own rate of payment for overtime work· and the payment was made, accordingly till the Labour Court ruled to the contrary. It is of importance 'to note G that in both the cases the working hours were less than one maxi~ mum permissible under Sec. 14 of the Act. It is equally important lb note· that the rates. of payment for overtime work in both the establishments prescribed by them. were for the period of.overtime work' in' excess of' their own prescribed working hours and upto· the -------- (ll (1972) II LLJ 385
PJltl.IJ>s tNDiA v, .LAnDUR COURT (kha/td, f) 4?~
statutory limit. prescribed in Sec. 14 of the Act. It is admitted that A. where the overtime work exceeded the statutorily prescribed limit, the rate of payment for overtime work was the one statutorily pre- scribed in Sec. 3.l of the Act. Ther<fore, the Contours of controversy is on a correct interpretation of the relevant provisions of the Act, what would be the rate of overtime allowance admissible to the employees of . the establishments of the employer in each case situated in B Tamil Nadu State for .overtime work done in excess ·of the prescri- be.d number of working hours by the employer and upto the number of working hours statutorily permitted. In other words, what ought to be the rate of overtime allowance for the work done in -\\ excess of 39 hours per week in the case of the company and 36 1/2 hours per week in the case of the Bank and ~pto 48 hours per week c in each case.
(11) At the outset let us notice the relevant provisions of the Act. Sec. 14 provides for daily and weekly hours of work. It reads as under : D "14. Daily and weekly hours of work-(!) Subject to the provisions of this Act, no person employed in any establishment shall be required or allowed to work for more than eight hours in any day and forty-eight hours in any week: E Provided that any such person may be allowed to work in such establishment for any period in excess of the liinit fixed nuder this sub-section subject to payment of overtime wages, if the period of work, including overtime work, does not exceed ten honrs in any day and in the aggregate F fifty-four hours in any week."
Sec. 31 prescribes rate of wages for overtime work. It reads as nuder: "31. Wages for overtime work--Wbere any person emplo- G yed in any establishment is required to work overtime, be shall be entitled, in respect of snch overtime work, ·to wages at twice the ordinary rate of wages. Explanation-For the purpose of this section, the expression "-ordinary rate of wages,, shall mean such rate ff of wages as may be calculated in the manner prescribed."
!l9ss1 3s.c.tt. · (12) The first question which we must engage our attention· is: whether Sec. 14 upon its true interpretation prescribes daily ' working hours in an establishment as also total number of working hours per week for which work may be taken in any week without · incurring the liability to pay higher rate of wages for overtime . work. A bare perusal of Sec. 14(1) would show that it prescribes · a ceiling on working hours. Obviously, it cannot be interpreted · to mean that the employer must provide maximum number of working hours as therein set out in the establishment governed by the Ach ·'It is open to the employer to prescribe working hours . for a day and total number of working hours for a week less than the ceiling prescribed by, the statute. Sec. 14 puts an embargo on the · c employers 'right to prescribe working hours beyond therein prescri- bed subject however, to its liability to pay higher rate of wages for . the overtime work done. The proviso however, makes it very clear that the upper limit fixed by the substantive provision can be exceeded upto the ceiling fixed by the proviso and not beyond in any case. This is a prohibition in public interest for safeguarding D the health which may be adversely affected by fatigue, stress and strain consequent upon continuous work daily or for total number of hours in a week. This simultaneously ensures a weekly off day even if the employer prescribes number of working hours as pro- vided in Sec. 14(1). Sec. 14(1) therefore, upon its true construc- E. tion permits an employer to prescribe daily working hours not exceeding 8 hours a day and total number of working hours at 48 in a week. By the proviso, the employer can take overtime work if the working hours do not exceed L hours in any day and 54 hours in a week, The proviso makes it abundantly clear that any work taken in excess of the working hours prescribed in the main part of sub-s. F' (I) of Sec. 14 would' constitute overtime work. 8 hours a day and 48 hours in a week would constitute normal working hours. Any- thing in excess of 8 hours a day but not exceeding 10 hours a day and 48 hours a week and not exceeding 54 hours a week will con- stitute overtime work. This becomes clear from the language' used in the proviso when it says that the bar imposed by sub-s. (I) G of S~c . .14 may be breached to the extent provided in the proviso. The expression used is that "no such . person" meaning thereby that person, who would be required to work 8 hours a day or 48 hours a week, may be allowed to work in excess of that limit subject to payment of overtime wages. 8 hours a day and 48 hours week a constitute normal time of work at ordinary wages and any work in H excess of the time prescribed for work would attract the liability
PHILIPS INDIA v, LABOUR COURT (Kha/id, J,) " 501 to p·ay overtime wages. Undoubtedly. the High Court was right · in saying that the expression 'overtime' is not defined in the. Act but when Sec. 14(1) prescribes permissible hours of ,work.both - daily and weekly and makes it obligatory to pay overtime wages for work in excess of the permissible hours of work, the expression 'overtime' renders itself easy of understanding. · Overtime .work attracts the liability of paying overtime wages. B ' (13) 'Over' is a prefix qualifying the expression 'time' which is well-understood. 'Over' as a prefix generally indicates excessive or excessively ; beyond an agreed or desirable limit. There are more than 150 expressions to which 'over' is added as a prefix. One such expression is 'overtime'. Collins English Dic\ionary c reprinted and updated in 1983 gives the meaning of the expression 'overtime' as (i) work at regular job done in addition ·to regular · working hours ........................... (iii) time in excess of a set period ............... (v) beyond the regular or stipulated time (vi) to exc~ed the required time for (say a photographic exposure). Webster's r:D Third New International Dictionary gives the ,meaning, oC the expression 'overtime'. as (i) time beyond or in excess of a set limit ; working time in excess of a minimum total set for a given period; in excess of a set time limit or of the regular working time., There- fore, even though the expression 'overtime' is not defined in the ·Act, its connotation is unambiguous. In· no· uncertain - t~.rnls, it ·E means in the context of working hours, period in excess of the p!escribed i:vorking hours, · '
. (14) The question. really is not what is understood by the :.expression 'overtime', but what is the admissible rate of payment for · 'overtime work. If the statute permits employment , for a certain -- "number of .hours of work and mandates a higher rate ~f wages for · work done in excess Qf the prescribed hours of work, obviousiy eve;y ~mployerto whom the Act applies will have to pay overtime. wages . i1t tl\~ rates prescribei:I in the statu\e. Accepting what the High {Jpur\ has l\eld that Sec. 14(1) merely prescribes the ceiling on'wor~; jog hours and p~s\s ~n obligation to pay overtime wages as made 'pbligatory in the proviso, the question is what period of work shall :pe treated as overtime wor~ so as to be able to claim overtime wages ·11t statutory rate. ~eeping out of consideration for the time being ·the working hours prescribed by the two appellants, take a cas~ .in JYhich the , working hours are prescribed as permitted by .$ec1 J4(1), J!u11~~911aitr . tra11,slat~<! if an. est~~Usq~~nt baa 1lresQribe~.w9rldns
p. 502
A hours as permitted by Sec. 14( I) i.e. 8 hours a day and 48 hours a week, the employees of such establishment would be entitled to over- time wages as. directed by the proviso and at the rate prescribed in the statute. To some extent, the proviso in this case has made a po· sitive specific provision simultaneously carving out an exception to Sec. 14(1). The proviso first permits work in excess of the prescri- B bed number of the hours but it is hedged in with the condition to pay overtime wages. The expression 'such person' in the proviso refers to person who is required to work for eight hours a day and forty-eight hours a week. The expression 'such establishment' in the • proviso would indicate that establishment which has prescribed the working hours as set out in the main part of the section namely, 8 hours a day and .48 hours in a week. In such an establishment over- time work for such a person would only be that work which would be done in excess of either 8 hours a day .or 48 hours a week. Such overtime work bas to be compensated at the rate prescribed in Sec. tio~ 31 which provides that where any person employed in an establishment is required to work overtime, he shall be entitled in respect of such overtime work to wages at twice the ordinary rate of wages. The expression 'such overtime' can refer to one contemplated by the prov_iso to Sec. 14(1) and no other. Reading sections 14 and 31 together, a scheme emerges. The statute first puts an embargo on the power _of the employers to prescribe normal working hours, not exceeding 8 hours per day and 48 hours per week. The proviso makes it obligatory to pay overtime wages for work in excess of the prescribed hours as set out in Sec. 14(1). Such overtime work has to be compen- sated by payment of overtime wages. And the rate of overtime wages is prescribed in Sec. 31 namely, at twice the ordinary rate of wages. The employer would ordinarily prescribe wages for normal working ll hours. Once the wages for normal working hours per day and cumu- lative for the week or month are prescribed, they could be styled as ordinary rate of wages. Thus the employer will be liable to pay to the employee wages at the ordinary rate of wages for prescribed hours of work as permissible in Sec. 14(1) and whenever he takes work in G excess of the prescribed hours of work the rate for overtime work prescribed by Sec. 31 would come into play. Secs. 14 and 31 provide the whole scheme of prescribing normal hours of work to be paid for as ordinary rates of wages. They permit the employer to take work in excess of the normal working hours upto the ceiling as set. out in the proviso to Sec. 14(1) which makes it obligatory to pay 'H overtime wages for work in excess of the normal working hours an<i the rate for the Sll!lle is pre~9ribed statutoril~ in Sec. 31.
. •, PillLIPS INDIA v, LABOUR COURT (Kha/id, J.) 503 (15) No cannon of statutory construction is more firmly established than that the statute must be read as a whole. This is a general rule of construction applicable to all statutes alike which is spoken of as construction ex visceribus·actus. This rule of statutory · ·construction is so firmly esta'\lished that it is variously styled as 'elementary rule' (See Allorney General v. HRH Prince ·Earnest Augustus) (I) and as a 'settled rule' (See Poppatlal Shah v. State of B Madras)('). The only recognised exception to this well-laid principle is that it cannot be called in aid to alter the meaning of what is of itself clear and explicit. Lord Coke laid down that : 'it is the most natural and genuine exposition of a statute, to construe one part of a statute by another part of the same statute, for that best expresseth c meaning of the makers' (Quoted with approval· in Punjab Breverages Pvt. Ltd. v. Suresh Chand).(')·
(16) Applying this well-laid cannon of construction, the ex- pression 'rate of overtime wages' in Sec. 31 has to be understood and interpreted in. the light of the provision contained in Sec. l4(1) read with its proviso. ·
(17) By reference to the statutory provisions and unhampe- red by precedents, it becomes clear that when normal working hours as permitted by Sec. 14( I) are prescribed by an employer for his employees working in the· establishment to which the Act E applies, wages for work in excess of such prescribed hours of work will have to be paid at the rate prescribed in Sec. 31. The framers of the statute provided the whole scheme by first putting an embargo on the maximum number of working hours p·ayable at ordinary rates and then permitting overtime work upto the ceiling, simul- taneously making it obligatory to pay overtime wages at the rate 'F prescribed in the very statute.
(18) The next question then is : where the employer . prescri- bes working hours less than the maximum permissible in the statute, docs he incur the obligation to pay overtime wages at the rates prescribed in the statute? If the employer were to contend ,) G that even though. it has prescribed normal working hours less than that permitted by the statute, m1d tlwrefore, it woul(j not be liable ' (1) [195711 All E.R. 497 (2) [1953] SCR 677 (3) (1978] 3 SCR 370
504 SUPREME COURT REPORTS (1985) 3 S.C.R, .A to pay any overtime wages for the work taken in excess of its own prescribed rates of wages, the prescription of working hours Jess than the maximum permissible under the statute would be a facade · because thereby the employer would enable itself to increase the working hours without incurring any liability to pay overtime wages. Ordinarily, therefore, where an employer prescribes normal working hours less than the maximum .permitted by the statute and if it seeks to take work in excess of its own prescribed number of hours of work, the employer renders itself liable to pay overtime wages at any rate higher than the ordinary rate of wages. As explailled earlier, prescribed working hours is the normal time of c work and anything in excess of it is overtime work. It was not disputed on behalf of the employer that any work taken for a ' >-- period in excess of the working hours prescribed by both the appel- lants-employers would make it obligatory for the employer to pay ·overtime wages and necessarily that must be higher than the ordin- ary rate of wages prescribed for normal working . hours. This is .o not in dispute. Both the . appellants-employers have prescribed rate of overtime wages at 11;2 time the ordinary wages for the period in excess of the prescribed working hours and upto the maximum permi,sible under the Act. Both concede that beyond · the maximum number of working hours permitted by Sec. 14(1), there is no option with the employer but to µay overtime wages at the rate prescribed in Sec,. 3 I. It is not a case as was sought to -, be canvassed in Indian Oxygen Ltd. v. Their Workmen( 1), where the employer contended that even though it had prescribed total working hours per week at 39 hours and as the establishment was governed by the Bihar Shops and Establishments Act, which per- mits maximum number of hours of work at 48 hours per week '.and provides for double ·the rate of ordinary wages for the work done beyond 48 hours per week, it was not· liable to pay any' overtime wages at a rate higher than ordinary wages for the excess work takell beyond 39 hours per week and upto the ceiling of 48 hours per week. This Court negatived this submission and held that once the employer fixed hours of work less than the maximum prescribed in the statute, the provisions both as to maximum hours as well as rate of overtime allowance beyond the maximum hours·prescribed by the statute has no relevance and canllOt 1?e relied upon. But a~
: 18 ----------- (!) (1969) I SCI\ 5SQ
~il1i..Ii>S 11'iiltA v. LABOUR cOtiRT (klia/td, },) SOS the employer has .prescribed total working hours at 39 hours per A week, any work taken in excess of the prescribed hours of work would be overtime work and that if as contended by the employer, that it was entitled to take any such overtime work at ordinary · rate of wages, it would be paying no' extra compensation at ail for the work done beyond the prescribed hours of work and the com- pany would be in· that case indirectly increasing the hours of work B ., and . consequently alter its conditions· of work. This extreme argu!Jlent was rejected .and the Court upheld the ,award of the Tribunal that for the 'period .in excess of the prescribed working ~ hours and upto the ceilfog of 48 hours. the employer would be • liable to pay overtime wages at the rate of 1! times the ordinary ·wages and dearness allowance payable to them.: Let it be noted c ' that ·court did not interfere with the award by saying that once overtime work is taken irrespective of maximum fixed in the statute, the statutory rate would be attracted. Undoubtedly, therefore,. this decision supports the submission · that where the employer prescribed working hours per day or total number of hours of work per week less than the maximum permissible under the statute, D. any work taken fo excess of the prescribed hours of work would be overtime work and the employer would be liable to pay some compensation but.not necessarily the statutory compensation which would .be attracted only when the employer takes work in excess· of the maximum hours of work prescribed by the statute. E
'(19) Learned counsel for the respondent contended that the.· trend of decisions is in favour of holding that the rate of payment
L for overtime work prescribed. by the.. statute would be admissible even where the employer. prescribed total number of working hours less than .the maximum permissible under the statute. Reliance was placed on AX 'Basuv. l.C.I. (India) Pvt. Ltd. and Ors.(1) wherein a F
Division Bench of the Calcutta High Court after referring to the provisions of the West Bengal Shops and Establishments, 1963 held that once the emp!Oyer prescribed total number of wor- G.) king hours at 36 per week and the statute permitted total number of working hours at 48 hours a week; according to the dictionary - mean_ing,, the employee has worked ·~vertime. Once he was called ..
(I) (1975) I LLJ 239 H•
f19ssj 3s.c.11.. •
A upon to work beyond 36 hours, the rate of overtime payment would be as prescribed in the statute. In reaching this conclusion, reliance was placed on the decision of the Indian Oxygen Ltd.(1) We have already explained the ratio oft.fie decision of this Court in the case of Indian Oxygen Ltd. and it does not bear out the observations of 8 the High Court. Reliance was also placed on M/s Carew & Co. Ltd. v. Sai/aja Kanti Chatterjee and Anr. A learned Single Judge of the Calcutta High Court has taken the same view after distinguishing the decision in the case of Indian Oxygen Ltd. The reasons which appealed to the learned Judge to distinguish the ratio of the decision c in the case of the Indian Oxygen Ltd. failed to impress us. In fact,' the decision in that case clearly rules that the statutory rate of over- time wages bas relation only to the maximum number of hours of work permissible under the statute and any work in excess thereof.
D (20) Reverting to the facts of both the cases, it is undoubtedly true that Section 14(1) does not prescribe normal hours of work but merely puts an embargo. on the employer's right to prescribe daily and weekly hours of work b~yond permissible under th~ Statute. But where the statute itself prescribes such permissible hours' of work. E and also makes it obligatory to pay overtime wages and prescribes rates, it can only mean work in excess of the maximum hours of work permissible under the statute which alone would attract the rate of payment for overtime work. 'Such overtime work' in Section 31 would and could only mean overtime as understood in the ·proviso to F Section 14( I) which has reference to maximum hours of work per- ... mitted by Section 14(1). This is bow the st.atute has to be read as a \ whole.
G (21) We must not be understood to say that where the statute prescribes maximum number of daily and weekly hours of work and the employer prescribes less than the permissible hours of work, work taken in excess of such pres~ribed number of hours will not be over-
H ----------- (6) (1972) II LLJ 359.
• .. l'IIlL!PS INDIA v. LABOUR COURT (Kha/id, J.)
tjme·.'\'l'ork,,or that the employer wo>Jld not be liable to pay wages f0r:'.such.work at a rate higher than the ordinary wages. An attempt to'.~,so c6~tend·was made before this Court fa Indian Oxygen Ltd. vs. <·"'t • ; I (, • • - '
T'h'e(f 'Workmen. That contentiOn was repelled and this Court held: 8. I"'~ . .I ·,; .
~\lflhe ·¢ompany ware asked to pay at the rate equivalent. to ···;the ordinary rate of wages for work done beyond 39 hours, but not exceeding 48 hours 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 be0 indirectly increasing the hours of work and consequently llltering its conditions of service."
:f)le·:"onlt· question in such a situation would be as to ,what D ought to be the rate of wages payable. Such a rate must be the sub· ject matter of agreement between the parties or an award by indus- trial adjudication. Any work taken for a period in excess of the maximum permissible under the Statute would indisputedly attract the statutory rate of overtime of wages,
(22) Both the employers have prescribed the rate of overtime wages at 1l times the ordinary wages for overtime work in excess of its prescribed hours of work and upto the maximum permissible ....... under Section 14(i ). Therefore, they cannot be accused of iudirectly --· extending their working hours. Both employers conceded that for work for a period in -excess of the maximum permissible hours of work under the statute must be paid for and is being paid for at the rate prescribed in the statute. Jn our opinion, therefore, the High Court was in error in directing the employers to payfor overtime work in excess of the prescribed hours of work and upto the maxi· mum permissible under Sec. 14(1) at double the ordinary wages by G invoking Sec. 31. For these reasons, both these sets of appeals will have to be allowed and the common Judgment of the High Court·. governing all the five writ petitions as well as the common orders of both the Labour Courts will have to be quashed and set aside and the applications made by the employees u11~er Sec, 33-C(2) of the II J,O. Agt will have to tlw gjsrµissed, ·
:1· 508 SUPREia COURT REPORTS [1985) 3 S.C.ll.
(23) Accordingly, all the appeals in both the batches succeed and are allowed and the judgment of the High Court from whicl! these appeals arise is quashed and set aside as also the applicatio01 made by .various employees under Sec. 33-C(2) of the l.D. Act are dismissed. B. (24) While granting leave this Court directed that the appel- lants irrespective of the decision in these appeals will have to pay costs· to the respondents in one set only. In accordance with this direction, the· appellants shall pay costs to the respondents in one set only . ., ' ~ c •
S.R. Appeal a/lowed,
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