REGIONAL DIRECTOR ESIC Vs. P B GUPTA

JUDGEMENT

(1.) THE short question that arises for consideration in this appeal is whether "over-time allowance" paid to employees would be included in the definition of "wages" in Section 2 (22) of the Employees' State Insurance Act, 1948, for the purpose of the employer's contribution on the same. On this question there is a sharp cleavage of opinion between the High Courts of India, the Calcutta, Karnataka and Rajasthan High Courts having taken the view that the said payment would not be included in the definition of "wages', whereas the Andhra Pradesh, Bombay, Kerala and Delhi High Courts having taken the view that the said payment would be included in the definition of "wages'. There has been no authoritative pronouncement of the Supreme Court on the question though there has been some observation in some incidental matters and so far as this Court is concerned, there has been no decision at all and, therefore, it is necessary to have an in-depth examination of the point in issue.

(2.) THE respondent is the employer engaged in manufacture of paper and paper board. He received a notice from the appellant calling upon him to pay the contribution and the respondent furnished a reply indicating the detailed particulars of payments on which contribution has been paid as well as the particulars of payments on which contribution has not been paid on the ground that payments made for over-time work do not come within the definition of 'wages' as defined in Section 2 (22) of the Employees' State Insurance Act (hereinafter referred to as the "act" ). The stand of the respondent was that overtime payments made to the employees cannot be included in the definition of 'wages' for the purpose of contribution. The appellant, however, intimated the respondent that over-time payments come within the definition of 'wages' and as such contribution is payable on such overtime payments. The respondent, therefore, filed an application before the E. S. I. Court for declaration that he was not liable to pay contribution in respect of the payments made to his employees for over-time work as the same cannot be included in the definition of 'wages'

(3.) THE appellant took the stand before the E. S. I. Court that the Act being a beneficial legislation for the workmen and over-time payment being an additional remuneration paid at intervals not exceeding two months, the same has to be included in the definition of 'wages' and, therefore, the respondent is liable to pay the demand in question.