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rajendrashinde
3

Respected sir,
In a company, Where factory act is followed, Every week workers have holiday on Sunday. On other days they have compulsory work. Every day 8 hours, so weekly 48 hour of duty. If someone works more than 8 hours a day then that particular person gets overtime according to the Double rate. But there are queries regarding daily wages workers over time as follows.

1. If we exclude Sunday then there are 6 days working. Every day is 8 hours so weekly 48 hours of duty is compulsory. But if someone remains absent then 40 hours are counted, the five days they work. if they do overtime of 4 hours everyday so 20 hours are counted. in that week how many hours they will get overtime with double rate and how many times with single rate

2. In March 2022 the first week starts on Tuesday and ends on Saturday. In that week from 1st March to 5th March 5 days are working. means March first week there will be 40 hours working but if someone remains absent between that, 32 hours are counted. But if we do overtime of 4 hours everyday then 16 hours of overtime is considered in that week. so my question is how many hours the rate of overtime will counted by single and how many time by double rate

3. In March 2022 last week starts from 28 March Monday and ends on 31st March Thursday. In that last week only 4 days of working. So if we do overtime of 4 hours everyday then 16 hours are there. so how will the rate of overtime counted here ?

From India, Mumbai
saswatabanerjee
2383

Dear Rajendra

First, the OT is payable for exceeding the timeing, 8 hours a day or 48 hours a week, whichever happens earlier. So if a person is absent, it does not reduce his claim of overtime on other days.

Secondly, the 48 hours applies to a calendar week, so it is immaterial whether the months starts on a Monday or Tuesday or any other day.

Third, if you are having someone doing 4 hours of OT every day, you are heading for trouble. Please note that there is a restriction of 48 hours of Overtime in a month (some states took it to 115 hours a month). And further, a person doing overtime every day is assumed to have a 12 hour work shift, which is illegal and will invite prosecution.

From India, Mumbai
rajendrashinde
3

Hello, Thanks for the response it was really helpful , I'm having few more queries

➊ To get double overtime rate, is it compulsory to work 48 hours every week in normal working hours. If 48 hours normal work is not done in a week, than the hours of overtime which are less paid in 48 hour will be considered as single rate ?
➋ In march 2022, First week Start on which date and End on which date ?

From India, Mumbai
nanu1953
334

As per Factories Act,1948 there is concept of single hour OT. As per Sec-59 it is clearly mentioned that if 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 OT work, be entitled to wages at the rate of twice his ordinary rate of wages.

In the instant case if any employee works for 40 hrs in a week and stay 4 hours extra for 4 days, then his total hours of work including OT will be as follows :-

5 days normal work = 5 *8 = 40 hrs. 4 days OT @ 4 hrs per day will be 1 single hours and 3 double hours = 1+ 3*2 = 7 hrs per day instead of 4*2 = 8 hrs per day. Therefore, total hours of payment in the week will be 40+ 7*4 = 68 hrs instead of 40+4*4*2 = 72 hrs.

S K Bandyopadhyay ( WB, Howrah)
CEO- USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
4194

As per Factories Act a worker is to be paid double the rate of wages for work beyond 48 hours in a week. Now:
1. If one is absent in a week, he will get OT rate only for that hours which exceeds 48 hours. If he works four hours extra every day, then he should have worked for 12X 5 days or 60 hours in that week. Of this 12 hours will qualify for Overtime at double the rate. Obviously, 8 hours in that account will qualify for single rate of wages.

In the case of an employee who is eligible to leave with pay, however, the day he is absent on leave with pay basis, will be counted as day worked. in his case, even if he has worked only for 5 days, he will get overtime wages at double the rate because in his case, he is said to have worked for 48 hours in that week excluding overtime hours as one day will be paid leave.

2. Decision regarding overtime hours should always be on a weekly basis. Therefore, if 1st day of a month starts in between a week, you have to take the hours from the beginning of the week, say from Monday to Saturday.

3. Calculation of wages being on weekly basis, the days of April coming in the last week of March will qualify for wages in that week itself.

In the case of employees whose wages is paid monthly, there is another way of computing OT. That is prorate weekly hours. In this case, if first week of March commences on Tuesday and accounts for 5 days, then OT at double the rate will be fixed as payable for hours exceeding 40 hours. Similarly, if the month ends on Thursday, with 4 days, that week may be taken as a week with minimum working hours of 32 and any hours in excess of 32 will earn overtime wages at double the rate.

From India, Kannur
nanu1953
334

Sec-59 - Extra Wages for OT under Factories Act 1948 -

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 overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.

Therefore, there are two conditions - one daily basis and another weekly basis. Examples as mentioned above where one worker has worked for 5 days instead of 6 days and all 5 days the worker worked for 12 hours. It appears that normal working hours in the week is 5*8 = 40 hours and extra work is 4*5 = 20 hours. Now the calculation is made on the basis of beyond 48 hours in a week will be considered as OT hours. In this case the worker will be eligible for 40 +8 = 48 hours single rate of payment and 12 hours at double the rate of payment i.e 12* 2 = 24 hours. Therefore total hours of payment will be 48 + 24 = 72 hours.

Let us now calculate on the daily basis. In this case the worker will earn normal hours for 5 days work = 5 * 8 = 40 hrs single rate. 1 hr single rate for 5 days = 1*5 = 5 hrs. and 3 hours double rate = 3 * 2 * 5 = 30 hrs. Therefore, total hours of payment will be = 40 + 5 + 30 = 75 hours which is more than 72 hours as shown above.

The reason for two conditions ( daily basis and weekly basis ) is not to deprive the worker. In the above example the worker will get 3 hrs ( 75 - 72 ) extra payment.

I have no idea whether the daily clause to calculate OT under factories Act has been dropped or there is any court case in favour of calculating OT on the basis of 48 hous weekly basis only. If there is any, please let me know.

Now I will share my experience of calculating OT in most of the organizations in India. Majority organizations are not checking weekly 48 hours conditions or daily 9 hours condition, rather paying OT on the basis of extra work beyond 8 hours in any day. The worker gains and law will not raise any question if the payment is more than statue.

Whether the worker is paid hourly basis, daily basis, monthly basis, piece rate basis etc. - it will be required to determine hourly rate and the payment should be made accordingly.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
4194

In establishments which work for 5 days in a week, the hours of work per week of 48 hours cannot be insisted. In Philips India Ltd Vs labour Court, Madras & Others( 1985 AIR 1034) the Supreme Court ruled that when the company has prescribed total working hours of 39 hours a week, any extra hour worked beyond 39 hours should compensate with overtime wages. However, it does not mean that overtime wages at double the rate should be paid for hours exceeding 39 hours. Since the company had prescribed that any extra hours beyond 39 hours will qualify for 1.5 times the normal wages as overtime wages, the same only is required to be paid. At the same time, any work beyond the statutory limit of 48 hours should qualify for overtime wages at double the rate.
From India, Kannur
nanu1953
334

Original post was related to Factory and single hour and double the rate OT. The reference Philips India case is related to Sales Office at Madras which was Commercial Establishment. I was employee of Philips India from 1988 to 1994 in the capacity of Personnel officer and Personnel Manager. I know the matter in details.

Here the question is when any worker works for less than 48 hours in a week (say for 3 days in a week) and extra work for another 3 days may be four or five hours per day as OT, in that case how to calculate OT hours.

In the above case 3 days normal hours i.e 8 hours per day and for extra work 1 hr single rate and rest hours at double the rate. Therefore, the worker will be eligible for 3 days absent as leave pay if there is leave credit for the worker otherwise it will be treated as LWP. Even there will be cases when including OT hours total hours in a week will be less than 48 hours. For example if any worker is worked for 3 days i.e 3 * 8 = 24 hours normal work and extra work 4 hours per day i.e 4 * 3 = 12 hours, then total working hours will be 24 +12 = 36 hours - less than 48 hours in a week.

Any paid leave will not be considered as 8 hrs working. It will be paid as leave pay instead of working hours.

Therefore, as per Factories Act, 1948, there must be calculation of OT on daily basis other than 48 hours in a week to make proper justice for the worker.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
4194

Very True. But the dictum of this verdict shall be applied here also because in respect of working hours and overtime, the interpretation in factories Act is similar to Shops...Act. oreover, while ruling this verdict (Philips India case) the court has cited a similar situation in Indian Oxygen Ltd Vs Their Workmen.
From India, Kannur
nanu1953
334

The case laws referred has no relevance with Sec-59 of Factories Act where a worker works in a factory for more than nine hours in any day ........................

The particular clause has not been deleted by any amendment from Factories Act,1948. The purpose of calculating OT under factories Act by either more than 9 hours in a day OR forty eight hours in a week is for the purpose when any worker will be absent within the week or may be any paid holyday in the week when 48 hours work is not possible by the worker in that week. At the same time the worker should not be deprived for extra work in any day (s) for not fulfilling 48 hours condition in a week.

As the question raised by Mr. Rajendra Sindhe what will happen in case any worker works for 5 days and every day 4 hrs extra work, the total hours to be paid 75 hrs for the week on the basis of calculation for more than 9 hours per day instead of paying OT after 48 hours work which will be 72 hrs for the week. The calculation has been shown to my earlier post.

In my 46 ( 1976-2022) years professional career I have come across with many HR professionals who cannot understand single hour OT concept properly. They neither follow 48 hrs concept per week nor 9 hrs concept per day, they rather pay OT for the extra work beyond normal working hours double the rate.

I know two organizations both MNC - Pfizer and Vesuvius who have 5 days week in factory and subsequently changed to 6 days week after negotiation with Union / Worker with a innovative formula 6 days work and 2 days off.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
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