Overtime payments are included in the definition of "wages" under section 2(22) of the Employees State Insurance Act, 1948 and employers special contribution is payable on such amount.

CHANDURKAR J.- This is a reference made by the Employees Insurance Court, Nagpur, under section 81 of the Employees State Insurance Act, 1948 (34 of 1948), hereinafter referred to as the Insurance Act. The question referred is as follows :-

"Whether the term "wages" as defined under section 2 (22) of the Employees State Insurance Act, 1948 includes all the payments made for overtime work and if so, is the employers special contribution payable on such an amount?"

The above referred question arose out of an application filed by the Shivraj Fine Art Litho Works, Subhash Road, Nagpur-2, hereinafter referred to as the employer, under section 75 read with section 76 of the Insurance Act, disputing its liability to pay Rs. 1787 on account of employers special contribution in respect of the remuneration paid to the workers who had worked overtime. The Insurance Inspector had found that during the period July 1966 to June 1967, a sum of Rs.71,466.53 was paid on account of overtime work to the employees in the employment of the employer and, according to the Inspector, the employers special contribution at the rate of 2½ per cent was liable to be paid by the employer. The ground on which the liability to pay this amount of Rs. 1787 was disputed, was that the payments made to the employees did not fall within the definition of "wages" as defined in section 2 (22) of the Insurance Act, and therefore, the said liability could not be enforced against the employer. The State Insurance Court, however, took the view that payment on account of overtime work was not intended to be included within the definition of "wages" ; but since it found that the question was purely one of law and wall of considerable importance, it was desirable, according to the Court, to have an authoritative pronouncement from this Court. That is how the reference came to be made.

2. The arguments before us have mainly turned on the definition of "wages" which is to be found in section 2 (22) of the Insurance Act, which is as follows:-

"(22) "wages” means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lockcut, strike which is not illegal or layoff and other additional remuneration it any paid at intervals not exceeding two months, but does not include-

(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;

(b) any travelling allowance of the value of any travelling concession;

(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or

(d) any gratuity payable on discharge;"

According to Shri Shankar Anand what is covered by the first part of the definition of "wages", is only the basic wage~ which are paid to the employee which means according to him the normal wages, which in the instant case were fixed under the provisions of the Minimum Wages Act, 1948. According to him, the first part of the definition does not cover payment which is made to an employee when he works for a period longer than the one prescribed under either the Minimum Wages Act or the Factories Act, because that work, according to the learned counsel, is not in pursuance of any contract of employment between the employer and the employee. Before we consider this argument, it is necessary to refer to another relevant provision which is to be found in Chapter VA of the Insurance Act under which the liability for the employers special contribution is being enforced. This provision is to be found in section 73A which is as follows: -

“73A. (1) for so long as the provisions of this Chapter are in force, every principal employer shall, notwithstanding anything contained in this Act pay to the Corporation a special contribution thereinafter referred to as the employers special contribution) at the rate specified under su