OVERTIME IS TO BE CALCULATED NOT ONLY ON BASIC WAGES BUT INCLUDING ALL ALLOWANCE

Overtime was being paid by the Management including all allowances. Suddenly allowances were excluded from the calculation of overtime without assigning any reason. Union challenged the decision of the Management before Central Administrative Tribunal but could not succeed. Union challenged the orders of the Tribunal and that of the Management in writ petition.
Writ Court held that the term "ordinary rate of wages". as per provisions of section 59(2) of the Factories Act, 1948, means the basic wages plus such allowances to which the worker is entitled for the time being. Any legal advice contrary to it has no legal sanctity.

-Heavy Vehicles Factory Employees; Union  Anr.VS. Union of India  Ors 2012 (Mad. HC) 

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