Dear Kumaraswami,
I may not be wrong if I say that a certain degree of situational management is required from a seasoned manager to avoid such a question of law arising out of an extraordinary fact situation.
First and foremost, how the employee was allowed to the shift two hours late? Had he not been allowed, the question would not have come up.
Second, whether the delay was condoned by the manager because of the reason that the work was of so much importance and possibly completed within the remaining hours of the shift.
Third, whether the urgency of the work made the manager to require the employee to work beyond his normal shift hours.
If the answers to the last two questions are "yes", in my opinion, the employee should be paid O.T wages without linking his late attendance for that particular shift.