O R D E R
Shri Ashok Kumar Singh, Smt. Rekha Singh, learned counsel for the applicant and Shri T.C. Agarwal, learned counsel for the respondents are present.
2. By means of this OA, the applicants have sought the following reliefs:
1
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"(i) To quash the vide impugned order dated 09.02.2022 issued by IInd Respondent (Annexure A-1 to the Compilation-I to Original Application).
(ii) Leave may be granted to applicants to file this Original Application jointly under Rule 4(5)(b) of Central Administrative Tribunal (Procedure) Rules, 1987 as because the concerned union is making this Original Application and their members are employees of concerned ordnance factory. Therefore, under said Rules, 1987, current Original Application is permissible.
(iii) To pass an appropriate order directing upon the Respondents to extend the benefit of inclusion of various allowances i.e. HRA, TA & SFA etc. while calculating OTA, provisionally to the applicants with retrospective effect i.e. w.e.f. 01.01.2006 in terms of directions given by Hon'ble Madras Court in Order dated 30.11.2011 (Annexure A-4 to Compilation No.II to OA) in terms of direction given by Hon'ble Central Administrative Tribunal (PB) New Delhi in order dated 25.04.2018 (Annexure A-6 to Compilation No.II to O.A) and in terms of principle laid down by Hon'ble Apex Court in order dated 25.07.1997 (Annexure A-8 to Compilation No.II to O.A.), regarding delay in filing O.A., if any, with all arrears benefits subject to outcome of SLPs of Respondents pending before Hon'ble Apex Court.
(iv) To pass order for any relief to applicants which this Hon'ble Tribunal may deem fit and proper in the present facts and circumstances of this Original Application.
(v) Award the cost of the petition (Original Application)"
2. The brief facts of the case are that the applicant no.1 is "registered union of employees" having about 290 members and applicant no.2 is Member of said Union working as Master-Craftman in Optical Section in the Ordnance Factory Raipur, Dehradun wholly owned by Government of India. The application under 4(5) of CAT (Procedure) Rules 1987 in MA No.970 of 2022 has been already allowed. Applicants were in receipt of overtime allowance whenever they have worked beyond the normal working hours of 48 hours in a week, calculated and computed by including allowances like house rent allowances, transport allowance, compensatory allowances, small family allowances etc. as per section 59(2) of Factories Act, 1948. After 6th pay commission respondent no.1, issued impugned office memorandum dated 26.06.2009 stating that house rent allowance, transport allowance, and small family allowance will stand excluded for the purpose of computation of overtime allowances. The employees of ordnance factories represented
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against the said office memorandum which was rejected by respondent by order dated 09.02.2022. Earlier, the heavy vehicle factory employees union Chennai filed OA No.1144 of 2009 in CAT Madras Bench challenging the office memorandum dated 26.06.2009 which was dismissed by Madras Tribunal on 24.12.2010. Aggrieved by the said order writ petition no.609 of 2011 was filed in Hon'ble Madras High Court which was allowed. Aggrieved by the above decision of Hon'ble Madras High Court respondents filed SLP No.12845-12852/2012 before Hon'ble Supreme Court of India which is still pending. The Hon'ble Supreme Court of India has not granted any stay of the order of judgment of Hon'ble High Court of Madras dated 30.11.2011 and the same was implemented by respondents.
3. The Employees Union of Ordnance Factories, Raipur Dehradun filed OA No.650/2016 before the CAT, Principal Bench, New Delhi for inclusion of HRA, TA, SFA in overtime allowance in the light of judgment of Hon'ble High Court of Madras dated 30.11.2011, which was allowed in judgments dated 25.04.2018. The applicant contends that they are similarly placed with the employees (applicants of OA No.650 of 2016). They are discriminated by the respondents without any valid and lawful justification. The first respondent issued office memorandum dated 24.09.2021 by which Ordnance Factory Board by Kolkata functioning under department of Defence Production was dissolved and Government of India have decided to transfer w.e.f. 01.10.2021, the Management, Control and Maintenance of 41 Production Units to new organizations into 7 government public sector undertakings. Ordinance Factory Raipur, Dehradun has been merged in New India Optel Limited, New Defence Public Sector Unit which is among the aforesaid seven public sector undertakings transferred in mass all the existing employees. The representation of applicants in compliance with the order of CAT Allahabad (Circuit Bench Nainital) dated 29.10.2021 in OA No.909 of 2021 was dismissed which is illegal, arbitrary, unjustified and not sustainable in the
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eyes of law, as settled by Hon'ble High Court, CAT, Principal Bench, New Delhi. As SLP is pending in Hon''ble Supreme Court of India and stay on the operation of the judgment by Hon'ble Madras High Court have not been granted. Hence applicant wanted the above reliefs.
4. Respondents in their counter affidavit have submitted that the representation of the applicant in compliance of Hon'ble CAT Allahabad (Circuit Bench at Nainital) dated 29.10.2021 in OA No.909 of 2021 has been decided by a speaking order dated 09.02.2022 and SLP arising out of the judgment by Hon'ble High Court of Madras is still pending and Hon'ble Madras High Court have failed to appreciate that the compensatory allowances, including transport allowance, house rent allowance, conveyance allowance, clothing allowance, washing allowance etc. would not fall within the meaning of expression ordinary rate of wages for the purpose of entitlement to extra wages for overtime as mandated under Section 59(1) of the factory act 1948 and compensatory allowance may not be included in wages for the purpose of calculation of overtime allowance under Section 59(2) of the act. As present issue is subjudice before the Apex Court and it will cause a lot of financial burden on the organization so the above original application should be dismissed.
5. In their rejoinder affidavit applicants have submitted that as Hon'ble Supreme Court has not stayed the operation of the judgment dated 2011 and hence respondents have implemented the judgment of Hon'ble Madras High Court subject to outcome of SLP pending in the Hon'ble Supreme Court. 693 employees of Union of Ordnance Factory Raipur have been extended the benefit already, hence applicant of the present application cannot and should not be discriminated in view of Article 14 and 16 of the Constitution of India.
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6. Heard both the counsel for the parties and gone through the judgments of the Hon'ble High Court of Madras. The operative portion of the judgment is quoted below:-
15. It is an admitted case that the third respondent factory is governed by the provisions of the Factories Act. It is also the case of the employees that they are enjoying the overtime allowances all along and suddenly, a decision was taken to discontinue the payment of the aforesaid allowances by relying on Section 59(2) of the Factories Act, wherein Wages and Allowances were defined, to the effect that 'ordinary rate of wages' means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work'. When the definition of the term, 'wages' specifically excludes bonus and overtime wages to calculate the overtime work and the aforesaid allowances were excluded only on the basis of the opinion given by the legal advisor of the Ministry of Law and not in consultation with the Ministry of Law (Department of Legal Affairs), as requested by the Ministry of Labour, based on which, the Tribunal has dismissed the original applications by a common order dated 24.12.2010, which, in our considered opinion, is illegal.
16. As rightly contended by the learned counsel for the petitioners, as per the definition of Sub Section(2) of Section 59 of the Factories Act, calculating the 'ordinary rate of wages means, basic wages plus such allowances including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work. In the absence of any rules governing the subject with regard to the exclusion of the abovesaid allowances, from the definition of ordinary rate of wages, as per Sub Section 2 of Section 59 of the Factories Act and when the petitioners are getting the same all along, taking a decision, which is contrary to the definition as contained in Sub Section 2 of Section 59 of the Factories Act, is unsustainable in law.
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17. It is also seen from the perusal of the records that when the Ministry of Finance, through their official memorandum, dated 14.11.2002, has requested the Ministry of Labour to reconsider the matter in consultation with the Ministry of Law (Department of Legal Affairs), but after consulting with the legal advisor of the Ministry, the Ministry of Labour and Employment has issued the above memorandum, which in our considered opinion, is not legal, since consulting the Ministry of Law is different from consulting the legal advisor of the Ministry. We are unable to understand as to what is the legal sanctity attached to the advice given by the legal advisor of the Ministry to exclude the abovesaid allowances to calculate the basic rate of wages. In the absence of any rule to exclude the aforesaid allowances from the definition of the basic wage, when the Section excludes only two items, viz., bonus and wages for overtime work, the action of the first respondent in excluding the said allowances without any authority, but only based on the opinion expressed by the legal advisor of the concerned Department, which cannot be considered to be the power given to exclude those allowances, and also the order passed by the Tribunal in rejecting the claim made by the petitioners based on the aforesaid memorandum, are considered to be illegal and unsustainable in law.
18. For the foregoing reasons, the order passed by the Tribunal is liable to be set aside and it is, accordingly, set aside. The writ petitions are allowed. Connected M.Ps. are closed. However, there will be no order as to costs."
The operative portion of the judgment of CAT Principal Bench, New Delhi dated 25.04.2018 is quoted below:-
"13. In view of the aforementioned facts, I am of the considered view that the applicants are also entitled for similar consideration by the respondents as prayed for in the OA. The relief may be granted to them provisionally subject to the final outcome of the decision of the Hon'ble Apex Court in SLP Nos.12845-12852/2012."
The operative portion of judgment of CAT Allahabad Bench Allahabad dated 17.12.2021 is quoted below:-
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"7. Without going into the restructuring issue of the Board, as there is no clarity as to the status of the existing employees and their terms and conditions and it is learnt that they continue to be governed under their existing service conditions, it would not be fair to deny the benefit to these employees since their similarly placed colleagues elsewhere have already availed this benefit. Moreover, since in two identical judgements, a principle has been laid down that various allowances are to be counted for the purpose of computing overtime allowance, it would be advisable not to push the employees into litigation and force them to seek a relief from the Court for an allowance which has already been paid to their colleagues. Accordingly, the O.A. is allowed subject to the condition that payment of the overtime allowance after inclusion of various allowances shall be subject to the outcome of the SLP filed by the respondents and in case respondents succeed in that SLP, it would be incumbent upon the applicants to refund the excess amount, if, any paid to them."
In a letter dated 13.02.2019 by Ordnance Factory Dehradun has included the said allowances for the calculation of overtime allowance which is reproduced below:-
"Consequent upon notification of Hon'ble CAT (PB) New Delhi judgment dated 25.04.2018 in OA No.650/2016 for implementation subject to final outcome of the decision of the Hon' Supreme Court in SLP No.12845-12852 of 2012.
2. The following applicant employees, Staff & IEs (List attached) of this factory are entitled for inclusion of HRA & other allowances for calculation of Over Time."
In order dated 24.09.2021 No.1(5)/2021/OF/DP(Plg-V)/02 the following decision was taken. The relevant portion is quoted below:-
"In pursuance of the decision of the Union Cabinet on 16thJune, 2021, the Government of India has decided to corporatize the functions of the 41 production units (Ordnance factories) of the Ordnance Factory Board ("OFB"), functioning under the Department of Defence Production, Ministry of Defence ("DDP"). Accordingly, the undersigned is directed to state that the Government of India has decided to transfer, with effect from 1stOctober, 2021 ("Appointed Date"), the
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management, control, operations and maintenance of these 41 production units and identified non-production units of 7 Government companies (wholly owned by the Government of India), namely (i) Munitions India Limited, (ii) Armoured Vehicles Nigam Limited, (iii) Advances Weapons and Equipment India Limited, (iv) Troop Comforts Limited, (v) Yantra India Limited, (vi) India Optel Limited, and (vii) Gliders India Limited (collectively "New DPSUs") in respect of (a) production activities, viz production of arms, ammunitions, weapons, vehicles, defence equipment and non-defence equipment; and (b) identified non-production activities".
8. The facts and relief claimed in the present original application are identical. In the light of the above discussions, original application is allowed subject to the outcome of the SLP No.12845-12852/2021 pending in the Hon'ble Supreme Court. No Costs.
(Mohan Pyare) Member(Administrative)
/Neelam/