General Manager, Jamuna Oil Company Ltd. Vs. Chairman, Labour Court, Chittagong Division and others, 51 DLR (AD) (1999) 91

Case No: Civil Appeal Nos. 41 and 42 of 1995

Judge: Mustafa Kamal ,

Court: Appellate Division ,,

Advocate: Mr. Rokanuddin Mahmud,Mr. Md. Khalilur Rahman,,

Citation: 51 DLR (AD) (1999) 91

Case Year: 1999

Appellant: General Manager, Jamuna Oil Company Ltd.

Respondent: Chairman, Labour Court

Subject: Labour Law,

Delivery Date: 1999-2-14

 
Supreme Court
Appellate Division
(Civil)
 
Present:
ATM Afzal, CJ. 
Mustafa Kamal, J. 
Latifur Rahman, J.
Bimalendu Bikash Roy Choudhury, J.
AM Mahmudur Rahman, J.
 
General Manager, Jamuna Oil Company Ltd.
………………………Appellant
Vs.
Chairman, Labour Court, Chittagong Division and others
……………Respondents
 
Judgment
February 14, 1999.
 
The Shops and Establishments Act, 1965
Sections 8 & 9
The Factories Act, 1965
Section 58
Section 8 merely prescribes the maximum number of hours in a day or in a week that a worker shall be liable to work. If the establishment reaches a settlement with the workers in reducing the hours of work the worker’s overtime will begin from the hour when the settled hour is reached. The worker need not wait till he works 48 hours a week to get the overtime allowance at double the ordinary rate of his wages. For him the working hour fixed by settlement is the normal working hour and any extra hour of work beyond the settled and stipulated working hour will be overtime work and the manner of calculating overtime allowance for overtime work will be governed by section 9 of the Shops and Establishment Act, 1965 read with rule 4 of the Rules. Therefore there is no basis for the submission that there is no law guaranting or securing any right in respondents to claim overtime allowance at double the rate of their wages in excess of 38 ½ hours and 44 ½ unless they work for more than 48 hours a week. …………..(19 & 23). 
 
Lawyers Involved:
Khalilur Rahman, Advocate instructed by Md. Sajjadul Huq, Advocate-on-Record—For the Appellant (In both the Appeals).
Rokanuddin Mahmood, Senior Advocate,(Abdul Momen Chowdhury, Advocate with him), instructed by Md. Aftab Hossain, Advocate-on-Record — For Respondent Nos. 2-4 (In both the Appeals).
Ex-parte — Respondent No.1 (In both the Appeals).
 
Civil Appeal Nos. 41 and 42 of 1995.
(From the Judgment and Order dated 23-6-94 passed by the High Court Division in Writ Petition No. 1617/91 (Dhaka)/Writ Petition No. 42 of 1988 (Chittagong) and Writ Petition No. 1454 of 1991 (Dhaka)/Writ Petition No. 43 of 1988 (Chittagong).
 
JUDGMENT
 
Mustafa Kamal J.
 
These two appeals by leave by the writ petitioner-company is from the judgment and order dated 23-6-94 passed by a Division Bench of the High Court Division in Writ Petition No. 1617 of 1989 (Dhaka) (Writ Petition No. 42 of 1988 (Chittagong) and Writ Petition No. 1454 of 1991 (Dhaka) (Writ Petition No. 43 of 1988 (Chittagong) discharging the Rules Nisi and affirming the judgment and order dated 17-10-88 passed by the Chairman, Labour Court, Chittagong Division in IRO case Nos. 59 and 63 of 1986 allowing both the IRO cases.
 
2. Respondent Nos. 2-4 of CA No. 41 of 1995, permanent workers (clerical) or the appellant company, filed JO Case No. 59 of 1986 before the Chairman, Labour Court, Chittagong Division and respondent Nos. 2-4 of CA No. 42 of 1995, also permanent workers of the appellant-company, filed IRO Case No. 63 of 1986 in the same Court and both the cases were allowed by a common judgment with a direction that the respondents in both the cases shall get and draw overtime allowance beyond the prescribed limit of 381/2 hours and 44 ½  hours in a week to be calculated at double the rate of their basic wages and dearness allowances, if any with effect from the date of filing of these two cases. This judgment of the Labour Court was challenged before the High Court Division by the appellant- company by the aforesaid two writ petitions. The learned Judges of the High Court Division by a common judgment affirmed the judgment of the Labour Court with modification, namely, that the respondents will get the overtime wages at double the rate of their basic wages only.
 
3. Shortly stated the facts are that, on the 29th October 1966 an agreement was signed between the Pakistan National Oils Limited. The predecessor of the appellant-company, and Workers Association, representing and acting on behalf of the workers. It was agreed, inter alia, that (a) the depot and terminal workers would work for 48 hours per week, (b) Chittagong officer and terminal officer clerical staff would work for 38112 hours per week and (c) that the overtime would be paid in accordance with the provisions of law under the Factories Act, 1965 and Shops and Establishments Act, 1965. A memorandum of settlement under section 27A and section 39D of the Industrial Relations Ordinance, 1969, as amended by IRO (Amendment) Ordinance, 1970 was signed on the 8th May, 1973 between the Management of Jamuna Oil Company Ltd, the successor of Pakistan National Oils Ltd and the Collective Bargaining Agent in presence of the Director of Labour, Government of the People’s Republic of Bangladesh, Dhaka in which it was agreed upon in respect of working hours/days in a week that the existing six working days in a week shall continue and that the existing hours of depot terminal workers shall be reduced from 48 hours to 44 ½  hours.
 
4. After the said settlement, the appellant- company framed and implemented Rules of overtime calculation as contained in Circular No. BDOM/CIRCULAR dated 7-12-73 and the said Circular covered the whole gamut of overtime payment of the workers and employees of the appellant-company covered by the Factories Act, 1965 and the Shops and Establishments Act, 1965 and fixed the rate for payment of overtime work done in excess of normal working hours and in excess of 48 hours in a week and also for wok done on weekly holidays and festival holidays.
 
5. The Collective Bargaining Agent of the workers of the appellant-company submitted a Charter of Demands on 16-11-85 in which the system of overtime calculation was questioned as being illegal and contrary to the settlement whereupon the overtime collection system was revised as per law and the said Charter of Demands was resolved and settled by the current and subsisting settlement on 26-2-86. Clause 18 of the settlement provided that the issue of overtime calculation system will be decided upon by Administrative Order in consultation with the representative of the CBA within two months. Accordingly, the appellant-company passed an Administrative Order on 1-7-86 directing that the existing system of overtime calculation shall continue to remain in force by operation of General Clause (C) of the current and subsisting settlement dated 26-2-86.
 
6. Respondent Nos. 2-4 in both the cases filed before the Labour Court contended, inter alia, that the weekly working hours having been fixed at 38 ½ hours (clerical) and 44 ½  hours (workers) under an agreement with the CBA any kind of work beyond 38 ½  hours and 44 ½  hours would attract overtime payment at double the rate of ordinary wages, not the single rate upto 48 hours of work as are being paid since 1973. The appellant-company is infringing upon the right guaranteed to the said respondents by paying them overtime allowance at single rate for the workers done beyond the basic working hours.
 
7. The appellant-company contended in their written objections that the respondents did not disclose any right secured or guaranteed to them under section 9 of the Shops and Establishments Act, 1965 and the Factories Act, 1965 and that the relief sought for by the said respondents was barred by General Clause (C) of the current and subsisting settlement dated 26-2-86 between the appellant- company and the CBA and that it was also barred by Clause 18 of the current and subsisting settlement dated 26-2-86 and also by the Administrative Order of the appellant-company dated 1-7-86.
 
8. Before the High Court Division it was argued by the appellant-company that the Labour Court misconstrued the relevant agreements dated 29-10-66, 8-5-73 and 26-2-86 as well as the Circular dated 1-7-86 of the appellant-company regarding reduction of weekly working hours and the manner of calculation of overtime allowance and also misconstrued the provisions of sections 8 and 9 of the Shops and Establishments Act, 1865 read with section 58 of the Factories Act, 1965 and that the Labour Court erroneously held that respondent Nos. 2-4 in both the cases are entitled to overtime allowance at double the rate of their ordinary wages done beyond 38½  hours and 44½  hours in a week even though they are not required to work for more than 48 hours in a week.
 
9. Leave was granted to consider the appellant-company’s submission that there being no law or award or settlement guaranteeing or securing any right in respondent Nos. 2-4 to claim overtime allowance at double the rate of ordinary wages for work done in excess of 38 ½  hours and 44 ½ hours, unless they work for more than 48 hours a week, the IRO cases are misconceived and not entertainable at all and ought to have been dismissed and the High Court Division failed to notice that aspect of the case and illegally upheld the judgment of the Labour Court and discharged the Rules Nisi.
 
10. Leave was also granted to consider the submission of the appellant-company that the Courts below failed to appreciate that by educing the maximum limit of working hours to 381/2 hours and “2 hours in a week in place of 48 hours through a settlement, arrived at between the Management and the CBA of the workers, the clerical staff/worker cannot and does not automatically get overtime allowance at double the ordinary rate of wages for working beyond 381/2 hours and 441/2 hours in a week, unless he works in excess of 48 hours in a week, because the same is not specifically provided for either in the said settlement or in any law or award.
 
11. Having heard Mr. Khalilur Rahman, learned Counsel for the appellant-company and Mr Rokanuddin Mahmood, learned Counsel for respondent Nos.2-4 we find that the issues are basically simple. Concerned establishments of the appellant-company are establishments within the meaning of the Shops and Establishments Act, 1965. We do not get any finding from any Court that these are factories under the Factories Act, 1965.
 
13. The provisions regarding daily and weekly hours of work and overtime allowance for overtime work are contained in sections 8 and 9 of the Shops and Establishments Act, 1965 which are as follows:
 
8. Daily and weekly hours of work.—(1) Save as otherwise expressly provided in this Act, no worker shall be liable to work in any establishment in excess of nine hours a day and forty-eight hours a week and no young person in excess of seven hours a day and forty-two hours a week:
Provided that a worker may be required to work overtime in any establishment, but the total number of hours of work including overtime in a week shall not exceed sixty in the case of an adult and fifty-two in the case of a young person:
Provided further that the Chief Inspector may, in special circumstances, grant exemption from the provisions of this section to an establishment or class thereof in respect of the weekly limit of overtime work subject to such conditions as may be imposed.”
 
9. Overtime allowance for overtime work.—A worker shall be paid in respect of over time work an allowance calculated at double the ordinary rate of his wages and such ordinary rates of wages shall be calculated in the prescribed manner:
Provided that the ordinary rates of wages, for calculating allowance for overtime work under this section, shall not include any bonus or any other additional payment made in lieu of bonus.”
 
14. Looking at clause (1) of section 8 were we have no manner of doubt that the said Act provides for the maximum number of hours that a worker is liable to work in an establishment for a day or for a week. Any establishment can reduce the upper limit of daily and weekly hours of work to a lower level in pursuance of a settlement with its workers but it cannot exceed the prescribed daily and weekly hours of work in any case.
 
15. If we look into the first proviso to clause (1) of section 8 it is further clear that the upper limit of overtime work in conjunction with the prescribed hours of work, not exceeding 48 hours a week, shall not exceed sixty hours of work in the case of an adult and fifty-two in the case of a young person. In other words, any order by an establishment or in any settlement reached between the workers and the Management the total number of hours of work including overtime in a week fixed by the proviso cannot be exceeded, but can be reduced.
 
16. This is what we call the upper limit in both clause (1) and the first proviso.
 
17. In section 9 only one method of calculation of overtime allowance for overtime work has been provided for. The method is to pay the worker at double the ordinary rate of this wages. There can be no payment of overtime work at any ordinary rate or at any rate other than double the ordinary rate. Since under section 9 the ordinary rate of wages are to be calculated in the prescribed manner rule 4 of Shops and Establishments Rules, 1970 provides for the manner of calculating the ordinary rate of wages as follows:
 
4. Manner of calculating the ordinary rate of wages.—For the purposes of section 9 of the Act the ordinary rate of wages per hour payable to persons employed shall be calculated in the following manner, namely:
(a) For persons employed on daily wages 1/9th of the daily wages; or
(b) For persons employed on weekly wages 1/48th of the weekly wages; or
(c) For persons employed on monthly wages 1/2 8th of the monthly wages.”
 
18. The submission of Mr Khalilur Rahman is that until and unless a worker works for 48 hours a week as provided in section 8 of the Shops and Establishments Act, 1965 he is not entitled to overtime at double the ordinary rate of his wages. Even if the Management reaches a settlement with the worker reducing the working hours from 48 hours in a week to 38 hours and 441/2 hours a week the worker will be entitled to overtime at the ordinary rate of his wages till he reaches the statutory working hour of 48 hours a week. It is only when he works beyond 48 hours a week that he will be entitled to double the ordinary rate of his wages as overtime.
 
19. The argument is fallacious as well as misconceived. As we had noticed earlier section 8 merely prescribes the maximum number of hours in a day or in a week that a worker shall be liable to work. If the establishment reaches a settlement with the workers in reducing the hours of work the worker’s overtime will be from the hour when the settled hour of work in reached. The worker need not wait till he works for 48 hours a week to get the overtime allowance at double the ordinary rate of his wages. For him the working hours fixed by settlement is the normal working hour and any extra hour of work beyond the settled and stipulated working hours will be overtime work and the manner of calculation of overtime allowance for overtime work will be governed by section 9 of the Shops and Establishments Act read with Rule 4 of the Rules.
 
20. When asked as to under what law or settlement or award the appellant-company is paying the respondents the ordinary rate of wages per hour for overtime work done beyond 38½  hours and 44½  hours falling short of 48 hours in a week. Mr. Khalilur Rahman merely pointed out that this is being done by calculating the ordinary rate of wages per hour as provided in Rule 4 of the Shops and Establishments Rules, 1970. This is a misuse of Rule 4. Rule 4 calculates the manner of determining ordinary rate of wages per hour for the purpose of doubling the rate while paying a worker overtime allowance for overtime work. But neither the Shops and Establishments Act nor the Rules provide that the calculation of ordinary rate of wages per hour as per Rule 4 of the Rules will apply for overtime work beyond the settled hours of work till the worker works upto 48 hours a week.
 
21. If we contrast the provisions of the Shops and Establishments Act, 1965 with the Factories Act, 1965 the intention of the legislature will be clearer. Section 50 of the Factories Act provides as follows:
 
50. Weekly hours.—(1) No adult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week.
(2) Subject to the provisions of section 58, an adult worker may work for more that nine hours in a day or forty-eight hours in a week:
Provided that the total hours of work of an adult worker shall not exceed sixty hours in any week and on the average fifty-six hours per week in any year.”
Section 58 of the Factories Act, 1965 provides as follows-
 
"58. Extra-allowance for overtime.- Where a worker works in a factory for more than nine hours in any day or more than forty- eight hours in any week, he shall, in respect of overtime work, be entitled to allowance at the rate of twice his ordinary rate of wages:
Provided that the ordinary rate of wages for calculating allowance for overtime work under this sub-section shall not include any bonus or any other additional payment in lieu of bonus.
(2) Where any workers in a factory are paid on a piece-rate basis the Government, in consultation which the employer concerned and the representatives of the workers, may, for the purposes of this section fix time rates as nearly as possible equivalent to the average rates of earnings of those workers, and the rates so fixed shall be deemed to be the ordinary rates of wages of those workers.
(3) The Government may prescribe registers to be maintained in a factory for the purpose of securing compliance with the provisions of this section.”
 
22. Section 58 makes it very clear that a worker is entitled to allowance at the rate of twice his ordinary rate of wages where he works in a factory for more than nine hours in any day or more than forty-eight hours in any week. In other words, if the Management and the workers reach a settlement that an adult worker shall work in a factory for 4 hours in any week, even then his overtime entitlement at the rate of twice his ordinary rate of wages will not be due until he works for more than 48 hours in any week.
 
23. This distinction between the Shops and Establishments Act, 1965 and the Factories Act, 1965 makes it very clear that the overtime work will begin in the case of the workers of the former category after the stipulated hours of work between the Management and the workers and that overtime will have to be paid at double the ordinary rate of wages as soon as the stimulated hours of works are reached. We, therefore, find no basis for the appellant-company’s submission that there is no law guaranteeing or securing any right in respondent Nos.2-4 to claim overtime allowance at double the rate of their wages in excess of 381/2 hours and 441/2 hours, unless they work for more than 48 hours a week. We find that the IRO cases were not at all misconceived and were not at all non-maintainable. The High Court Division did not err in law in upholding the judgment of the Labour Court.
 
24. We also do no not find any substance in the submission of Mr. Khalilur Rahman that the clerical staff/worker cannot and does not automatically get overtime allowance at double the ordinary rate of his wages because of the settlement reached. The settlement automatically attracts sections 8 and 9 of the Shops and Establishments Act, 1965 and Rule 4 of the Rules.
 
For the reasons stated above both the appeals are dismissed without any order as to costs.
 
Ed.