Overtime Confusion: Are Maintenance and Shift Engineers Eligible for Extra Pay?

Overtime Eligibility for Engineers

I am experiencing confusion regarding overtime (OT). Is it applicable for maintenance engineers and shift engineers in the factory? Who is eligible to receive OT?

Dear Colleague,

Overtime applicability under the Factories Act 1948

Overtime is applicable for a "WORKER" (meaning a person employed in any manufacturing process).

The two sections of the Factories Act 1948 that are relevant are:

Section 59: Extra wages for overtime

(1) 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.

Definition of "worker"

2(l) "worker" means a person [employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not], in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process [but does not include any member of the armed forces of the Union].

Section 64: Power to make exempting rules

The State Government may make rules defining the persons who hold positions of supervision or management or are employed in a confidential position in a factory [or empowering the Chief Inspector to declare any person, other than a person defined by such rules, as a person holding a position of supervision or management or employed in a confidential position in a factory if, in the opinion of the Chief Inspector, such person holds such position or is so employed], and the provisions of this Chapter, other than the provisions of clause (b) of sub-section (1) of section 66 and of the proviso to that sub-section, shall not apply to any person so defined [or declared]: [Provided that any person so defined or declared shall, where the ordinary rate of wages of such person [does not exceed the wage limit specified in sub-section (6) of section 1 of the Payment of Wages Act, 1936 (4 of 1936), as amended from time to time], be entitled to extra wages in respect of overtime work under section 59.]

Hence, the "WORKER" (other than those in supervisory, management, or confidential positions) is entitled to overtime wages as and when they work for more hours than regular hours of work. Kindly check the Factories Rules of your respective state to determine who falls under the purview of supervisory or management level and then extend the overtime wages accordingly. Some argue that everyone from worker to manager is entitled to overtime, but this is the practical interpretation I have experimented with in factories. "WORKER" means a person employed in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process.

We have also strengthened the Standing Orders defining who falls under the category of "WORKER" for clearer administration of the matters connected therewith. You may also get a legal opinion for safety to convince your stakeholders and then implement a system without any statutory non-compliance.

Other learned colleagues may also give their comments for more learning of the members.

If the shift engineers do not have any reportees under them, they are eligible for overtime wages. Otherwise, they are not.

Definition of Worker Under the Factories Act

Factories Inspector counts almost everybody as a worker, irrespective of one's status. Indeed, unlike the ID Act 1947, which excludes supervisory and managerial employees from the Workman definition, the Factories Act has an all-inclusive definition. For instance, in case an officer or manager is injured in an accident in the factory, it has to be reported. So, for all practical purposes, Factory Occupier and Manager are excluded, while all others get the protection provided in the Act. Accordingly, I feel the Maintenance Engineers and Shift Engineers too are entitled to overtime, subject to the conditions laid down.

Exemption from Overtime Rules

I think you are referring to Section 64, which discusses persons holding confidential positions who are exempt from certain portions of the Factory Act. There will be rules pertaining to it, which in Maharashtra, for example, are Rule 100 to 102.

The rules (in Maharashtra) very clearly state that they are exempt from the limitation of 115 hours of overtime in a quarter and the number of hours in a single day (subject to conditions), but they are not exempt from being paid overtime. So, check the rules in your state and decide accordingly on the matter.

I have not seen any rule that exempts overtime pay so far.

During my whole career, I have worked only with factories, except for one organization where I was in a regional office.

From the above posts, it reflects that everybody is considered a worker by the factory directorate, and I have also faced the same. At the same time, I have never faced any disputes throughout my career where factory inspectors had raised questions regarding non-payment of overtime to management staff after reviewing the overtime register, attendance register, etc.

Many factories have finance, marketing/sales, HR, manufacturing, maintenance, QC, purchase/procurement, etc., under one umbrella. In some organizations, it is demarcated as a portion under the S&E Act and the rest is under the Factories Act. However, in the majority of organizations, it falls under the Factories Act.

If I am not mistaken, in India, for most factories, the employees are divided into two categories - Bargainable staff and Management staff. Bargainable staff receive overtime, while management staff do not. There are always some reportees for management staff. Employees under the management category in most organizations work beyond regular working hours, and as far as my knowledge goes, they are not paid overtime anywhere in India.

In the instant case, the concerned employees are the Shift Engineer and Maintenance Engineer, who are supposed to be management staff, with shift workers reporting to the Shift Engineer and Maintenance Fitter, Electrician, etc., reporting to the Maintenance Engineer.

From the interpretation of the Act, it appears that everybody within the factory should receive overtime as a worker, but the reality is different. At the same time, I have never heard of any case law or demand by any factory inspector to pay overtime to management staff.

Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] USD HR Solutions – To strive towards excellence with effort and integrity

Please refer to all applicable Acts and Rules and apply your own wisdom before making any decisions. As per my understanding, all non-managerial and non-supervisory workmen are eligible for overtime wages. Therefore, I believe that Maintenance Engineers and Shift Engineers are entitled to overtime pay, subject to the specified conditions. Additionally, you should assess whether they are acting as supervisors before reaching a conclusion.

Regards, Ratan Bhardwaj