Definition of a Worker in the Factories Act
The definition of a worker in the Factories Act is narrow but describes one as a person engaged in manufacturing activity either directly or indirectly. In case of any dispute regarding eligibility for overtime (as well as any available benefits), you can refer to the definition of a workman given in the Industrial Disputes Act. According to this act, a workman is someone who earns a salary of not more than Rs 10,000. However, the salary considered for this purpose should be the statutory salary, such as Basic salary and dearness allowances, and should not include variables typically included in the Cost to Company (CTC).
Interpretations by Courts
Courts have provided different interpretations of the term "worker," stating that it is not solely based on the person's job title but also on the functional responsibilities they hold. This determination decides whether the employee is classified as a workman, supervisor, or managerial person. Therefore, any employee, regardless of their salary, who lacks the authority to supervise workers through actions like sanctioning leave, appraising performance, or initiating disciplinary action is considered a worker.
Categorizing Employees for Overtime Eligibility
It is advisable to categorize employees based on overtime eligibility by determining whether they fall under the Industrial Disputes Act or not.
Regards,
Madhu.T.K