Union Of India vs Heavy Electricals Fac.Emp.Union
Parties Involved
Union of India
Heavy Vehicles Factory Employees’ Union
AI Summary
The Supreme Court of India upheld the Central Administrative Tribunal's decision that compensatory allowances such as House Rent Allowance and Transport Allowance should not be included in the calculation of overtime wages under the Factories Act, 1948. This ruling reversed the High Court's earlier decision which had misinterpreted the provisions of the Act, thereby relieving the Union of India from an excessive financial burden.
Order Text
Union Of India vs Heavy Electricals Fac.Emp.Union on 20 January, 2026 Author: Rajesh Bindal Bench: Rajesh Bindal 2026 INSC 74 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.5185-5192 OF 2016 UNION OF INDIA & OTHERS … Appellant (s) VERSUS HEAVY VEHICLES FACTORY EMPLOYEES’ UNION AND ANOTHER … Respondent(s) JUDGMENT Rajesh Bindal, J. 1. Aggrieved against the order passed by the Division Bench of the High Court 1 dated 30.11.2011, the present appeals have been filed by the Union of India. Vide the aforesaid judgment, the order passed by the Central Administrative Tribunal2 dated 24.12.2010 passed in a bunch of applications filed by the respondents, was set aside. Signature Not Verified Digitally signed by DEEPAK SINGH Date: 2026.01.20 15:17:47 IST Reason: 1 High Court of Judicature at Madras 2 Central Administrative Tribunal, Madras Bench (Hereinafter, “CAT”) Page 1 of 18 2. Briefly, the issue is as to whether compensatory allowances, such as House Rent Allowance 3, Transport Allowance 4, Clothing and Washing Allowance 5 and Small Family Allowance 6, would fall within the term “ordinary rate of wages” for calculation of overtime wages in terms of Section 59(2) of the Factories Act, 1948 7. 3. Learned counsel appearing for the appellants, taking us through the historical background, has drawn our attention to various letters issued by different Ministries, in terms of which the respondents will not be entitled to add various components of co...
