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1966 (11) TMI 86 - SC - Indian LawsWhether the overtime wages paid to an employee by the appellants are wages within the meaning of Section 2(22) of the Employees State Insurance Act 1948 ? Held that - The Legislature by defining employee having had the knowledge of the payment of the remuneration for overtime work done by the employee and having excluded it in Section 2(9) the omission thereof in the definition of Section 2(22) excluding items A to D would be eloquent and meaningful. Whatever remuneration paid or payable for overtime work forms wages under an implied term of the contract. The object thereby is clear that the overtime work done by the employee is an implied contract to do overtime and the remuneration paid therefore does form part of the wages under Section 2(22). . Since it is not obligatory for the employees to work remuneration paid towards overtime work amounts to mutual payment not as part of wages but as remuneration for services rendered outside the contract of employment of the employees. Therefore it will not come within additional remuneration if any paid at intervals not exceeding two months within the meaning of Section 2(22) of the Act. Appeal dismissed.
Issues:
Interpretation of the term "wages" under Section 2(22) of the Employees State Insurance Act, 1948 in relation to overtime wages paid to employees. Analysis: The Supreme Court addressed the issue of whether overtime wages paid to employees by the appellants qualify as "wages" under Section 2(22) of the Act. The Court considered the absence of stipulation for payment of overtime wages in the original contract of employment and whether this omission affects the classification of such remuneration as "wages." The appellants contended that unless overtime wages are part of the contract of appointment, they should not be considered as "wages." They argued that in the absence of mutual obligations under a contract for overtime work, such remuneration should not be classified as "wages." The Court examined the definition of "wages" under Section 2(22) of the Act, which includes all remuneration paid or payable in cash to an employee if the terms of the contract of employment, express or implied, were fulfilled. The Court emphasized that if there is a contract of employment, express or implied, and the terms of the contract have been fulfilled, then the remuneration paid for the duty performed constitutes wages. The Court highlighted that the inclusive definition of "wages" should be interpreted broadly to encompass all entries similar to the main part of wage, except those expressly excluded by legislation. The Court also referred to previous judgments emphasizing the wide interpretation of the term "wages" and the legislative intent behind the inclusive definition. The Court analyzed the legislative provisions related to the definition of "employee" and the implications of remuneration exceeding prescribed limits. The Court observed that the Act aims to bring employers within the scope of beneficial provisions, and employees receiving overtime wages are not excluded from the Act's purview. The Court concluded that remuneration paid for overtime work forms part of wages under an implied contract, obligating the employer to pay contributions under the Act. The Court cited previous judgments to support the view that overtime wages constitute wages within the Act's definition, emphasizing the broad and inclusive nature of the term "wages." The Court contrasted the approach of certain High Courts that applied technical rules of construction to exclude overtime wages from the definition of "wages." The Court disagreed with this approach and upheld the view that remuneration for overtime work should be considered as wages under the Act. The Court referenced specific judgments by various High Courts to support its conclusion and distinguished a previous decision that was rendered prior to an amendment of the definition. Ultimately, the Court upheld the High Court of Andhra Pradesh's interpretation of the term "wages" and dismissed the appeals, finding no grounds for interference. In a related writ petition, the Court dismissed the petition as withdrawn and ordered no costs to be paid.
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