Union Of India vs Heavy Electricals Fac.Emp.Union

The Supreme Court examined whether compensatory allowances such as House Rent Allowance, Transport Allowance, Clothing and Washing Allowance, and Small Family Allowance are includable within the 'ordinary rate of wages' for calculating overtime wages under Section 59(2) of the Factories Act, 1948. The Court considered the historical background and government communications which excluded these allowances from overtime calculations. Ultimately, the Court upheld the exclusion of these allowances from the ordinary rate of wages for overtime purposes, setting aside the High Court's decision that had allowed their inclusion.