' This appeal is directed against an order passed by the learned 2nd Labour Court, on 4-2-1980, on an application under section 34, I. R. O., filed by the Karachi Pipe Mills Employees' Union, directing the appellant-Company to pay to its workers overtime wages on the basis of their total remuneration which would include allowances also.
2. The dispute in the instant case between the appellant-Company and the C. B. A., representing its workmen, the respondent herein, is in regard to the mode of computing the overtime wages payable to the workmen. Whereas, it is the case of the appellant that, according to the long- standing practice prevalent in the Company for over 20 years, overtime wages are payable at double the basic wages and Court of Living allowance and 1 times the food subsidy, the claim of the respondent union is that the overtime wages should be paid strictly in accordance with the provisions of section 47, Factories Act, 1934. In other words, its claim is that payment for all overtime work should be at double the ordinary rate of pay and this should include allowances save those which are expressly excluded by section 47 of the Factories Act. The learned Labour Court upheld the contention of respondent Union and has directed that for the computation of payment for overtime, all allowances, such as housing allowance, milk allowance, etc., should be included in the remuneration.
3. I have heard Mr. S. M. Yaqoob, the learned counsel for the appellant-Company, and Mr. S.P. Lodhi, who appeared for the respondent Union. Mr. Yaqoob raised a two-fold contention, namely, what is meant by 'ordinary rate of pay', under the Factories Act, and whether the workmen of the appellant-Company are entitled to retain benefits both under the agreements/practice and also under the law.
4. Section 47 of the Factories Act provides when extra pay for overtime work is payable and also at what rate it is payable. Subsection (1) of the said section, which was substituted for the original subsection (1) and (2) by Act X of 1946, reads as follows:- ' Section 47. Extra pay for overtime,-(1) Where a worker-
(a) in a non-seasonal factory works for more than nine hours in any day or for more than forty- eight hours in any week, or
(b) in a seasonal Factory works for more than minc hours in any day or for more than fifty hours in any week, he shall be entitled in respect of the overtime worked to pay at the rate of twice his ordinary rate of pay.
Explanation.-In this subsection, ordinary rate of pay means all remuneration capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a worker in respect of his employment or of work done in such employment, but does not include-
(i) the value of any house-accommodation, supply of light, water, medical attendance or other amenity;
(ii) any contribution paid by the employer to any pension fund or provident fund;
(iii) any travelling allowance or the value of travelling concession; or
(iv) any gratuity, bonus or share in the profits of the factory."
5. A bare perusal of the above subsection makes it clear that extra pay for overtime, as provided in the said subsection, is only admissible to a workman in a factory, who works for more than 9 hours in any day or more than 48 hours in a week. The payment for the overtime work is to be at double the rate of the ordinary rate of pay. The expression 'ordinary rate of pay' has been defined to mean all remuneration capable of being expressed in terms of money which is payable to a worker in respect of his employment under the terms of employment. As such, the expression would not only include all monetary payments made to the worker under the contract of his employment but also payments made in kind which are capable of being expressed in terms of money. However, 4 categories of payments are expressly excluded from the definition of 'ordinary rate of pay'. The most important category excluded is expressed in clause (i) of the Explanation namely, the value of any house-accommodation, supply of light, water, medical attendance or other amenity. It was contended by Mr. S. M. Yaqoob that whether a workman was provided with the residential accommodation or was granted house rent allowance makes no material difference and both have to be excluded from the definition of 'ordinary rate of pay', as in one case the worker is actually provided with residential accommodation which in the other case, he is given money for providing himself with a house. The learned counsel argued that it could not possibly be the intention of the Legislature to exclude the value of the house provided to the workman from being considered as a part of the ordinary rate of pay but to include a house rent allowance which is for the purposes of the same facility or amenity. In support of his contention, the learned counsel relied upon the decisions in the cases of National Tyre and Rubber Company v. Sind Labour Court and National Book Foundation v. Mazharul Haque Alvi. No doubt, the above 2 decisions support the contention of Mr. Yaqoob, but it may respectfully be pointed out that in the first case, which a decision by a learned Single Judge of the Karachi High Court, it has been assumed that house rent has been excluded from the definition of wages under the Payment of Wages Act, 1936, while in the second case, the learned Chairman of the Labour Appellate Tribunal Punjab, disallowed a workman's claim for house rent under the Payment of Wages Act, since according to him, house rent was excluded from the definition of wages as given in the said Act. In neither of these decisions has there been any discussion as to the interpretation of the words 'value of any house accommodation' nor has any distinction been sought to be drawn between these words and the expression 'house rent'. To my mind, there is substantial difference between the 2 expressions. In1 2 one case,, the workman is provided with residential accommodation, while in the other case, the workman is only given a house rent allowance which may fall far short of the expenditure incurred by the worker in providing himself with suitable residential accommodation. The exception in the case of providing of housing accommodation should be read along with similar exception in the case of supply of light and water. It may perhaps be pertinent to point out that traditionally factories have residential colonies attached to them, where substantial number of workmen are housed. It is presumably on account of this practice that it was considered appropriate by the Legislature to exclude the value of residential accommodation and supply of light and water from the definition of wages. In Webster's II1rd New International Dictionary, the word 'value' has been defined as; "the monetary worth of something; marketable worth of something." House rent, on the other hand, is a totally different proposition. Because of rising costs of construction and the difficulty in finding enough land in the factory's premises itself, it is no longer possible for a factory to provide housing accommodation to even a substantial proportion of its workmen. In consquence, the present trend is to grant workmen house rent instead of providing them with housing accommodation in or near the factory's premises. Since house rent is a cash allowance, and further it may bear little relationship with the actual expenses incurred by the workman in providing himself with housing accommodation, it cannot be considered as the value of housing accommodation. Furthermore, since house rent is a cash payment, there cannot be monetary worth of house rent. It may also be pointed out that where the Legislature intended that a cash allowance be excluded from the definition of 'ordinary rate of pay', it makes express provision in this behalf as in the case of travelling allowance. It is pertinent to note that clause (iii) of the definition of 'ordinary rate of pay' not only includes travelling allowance but also the value of the availing concession. The Legislature thus has consciously made the distinction between the cash allowance and the value of concession or amenity, and if its intention was not only to exclude the value or amenity or concession but also the cash allowance meant for providing workman with such amenity or concession, it would have expressly excluded, such allowance from the definition of 'ordinary rate of pay' as in the case of travelling allowance. Accordingly, with deep respect for the 2 reported decisions referred to above, I am in agreement with the view taken by the learned Labour Court that house rent does not come within the ambit of expression 'value of housing accommodation', for the purposes of ascertaining 'ordinary rate of pay' under the Factories Act, and accordingly it has to be included.
6. Apart from house rent, the appellant company is giving a number of other allowances to the workmen such as food subsidy, heat allowance, fume and milk allowance, coil pit and cash allowance, chapel allowance and washing allowance. It was contended by Mr. Yaqoob that these allowances amenities for the purposes of clause (i). Of the definition of 'ordinary rate of pay' as given in the Factories Act, and hence they should be excluded for computing ordinary rate of pay.
One may agree with the learned counsel that these allowances are given to the workman for the purposes of providing themselves with certain amenities, although they could more appropriately be described as fringe benefits, but the important question is whether any of these allowances can be considered to be value of amenities. The point that am trying to make is that where amenities are granted to the workmen, such as supply of uniforms, food, milk etc., or washing of uniforms is undertaken by or through the factory, the value thereof would be excluded while computing the ordinary rate of pay of a workman for the purposes of determining payment of overtime work, but where the amenities are not provided by the factory, but only allowances are given, as in the instant case, the same would not be excluded for the purposes of determining the ordinary rate of pay. In fact, the same arguments would prevail in respect of such allowances as in respect of house rent allowance. The Indian Supreme Court in the case of Crown Aluminum Works v. Their Workmen, upheld the Labour Appellate Tribunal that food concession granted by the company3 had become part of the wages of the workmen and could not be withdrawn. Similarly in the case of Senett Coleman & Company v. Punya Praiya Das Gupta, it has held that car and telephone allowances granted to journalists were part of their wages. I am, accordingly in agreement with the finding of the learned Labour Court that the various allowances given by the appellant-Company to its workmen, excluding a travelling allowance which may be given to any workman, form part of the 'ordinary rate of pay' for the purposes of computing extra payment for overtime work.
7. It was next contended by Mr. S. M. Yaqoob that the workmen of the appellant-Company would be entitled either to the benefits admissible to them under the previling practice in the Company and in accordance with the agreements executed between the Company and the C. B. A, or as are admissible to them under the law, but they cannot claim benefits both under the prevailing practice as well as the law. There can be no quarrel with this proposition. In fact, Mr. Lodhi, the learned representative for for the respondent-Union, submitted that the Union was claiming extra payment for overtime work in accordance with the law. Now, extra payment for overtime work under section 47, Factories Act, is payable only to that workman who works for over 9 hours a day or 48 hours a week. However, the practice in the appellant Company is to pay for overtime to a workman who works more than 8 hours on any day or 45 hours in the general, 2nd and third shift and 43 hours in the first shift. Now as regards extra payment for overtime work done beyond 9 hours in a day or 48 hours in a week, payment has to be made at double the ordinary rate of pay, as provided in section 47, Factories Act and such rate of pay will include all the cash allowances as admissible to the workman, as already held. The question, however, that remains to be considered is at what rate is a workman to be paid for the overtime work which is below the period for payment of overtime prescribed under section 47, but for which payment is presently admissible to workmen under the practice prevailing in the Company. I am of the view that for this overtime, the workman will continue to be entitled to be paid overtime at the rates which are presently admissible to them, namely, at double the basic wages and Cost of Living Allowance plus 1i times the food subsidy. Mr. Yaqoob contended that there was no practice prevalent in any factory where different rates of overtime are payable. I am not in a position to say whether in any factory in Karachi, there are different rates for payment of overtime work. But in the case of India Oxygen Ltd. v. Their Workmen the Supreme Court of India rules that since the total hours of work per week in the India Oxygen Ltd. Were 39 hours under the conditions of service of the company, any workman asked to work beyond those hours would obviously be working overtime and the Company would be expected to pay him the compensation for such overtime work. It accordingly approved the decision of the Labour Appellate Tribunal that for such overtime work, the Company should pay workmen at 1} times of the ordinary rate. However, for overtime work beyond 48 hours a week, the Company was required to pay to the workmen at double the ordinary rate, as provided in the Bihar Shops and Establishments Act. There would thus appear to be no difficulty in making payment for overtime work at different rates, the existing rate, per practice for work done beyond the fixed under the conditions of service of the Company, and at double the ordinary rate of pay for work done beyond 9 hours a day or 48 hours a work as provided under section 47 of the Factories Act. It may be further clarified that special allowances for doing specified duties, such as cash allowance or heat allowance, would form the ordinary rate of pay of only that workman who on the day or in the week, when the overtime is admissible to do such work.
8. The upshot of the above discussion is that the decision of the learned Labour Court is upheld and the appeal is dismissed. 1979 PLC 440 1980 PLC 112 AIR 1958 SC 304 5 1 2 3