India’s rapid economic growth and increasing digital landscape have made customer support crucial for Organisations’ progress. Added to this is the shift from a Product-centric approach to a customer-centric approach. 24×7 support systems and Operation is one step taken by organisations to best cater to these growing customer and economy needs.

Considering the above, it is also important to understand the legal aspects of Holidays, Compensatory offs, Overtime, etc. It plays a vital role in governing the rights and obligations of workers and employees, working and employed in an organization. This article focuses on the various legal compliances under the labour laws in the state of Karnataka by an employer.

Here is a quick guide for the state of Karnataka. There are two aspects to overtime i.e.

Part A: Case where an employee works for more than the required time in a week

Part B: Case when an employee works on a National Holiday or a Festival Holiday

Part A – When an employee is made to work for more than the required time in a week

As per various labour laws, the provisions state that no employee in an establishment should work for more than 9 hours a day or more than 48 hours in a week. If the employee works for more than such number of hours; he shall be paid wages twice the normal rate of wages.

Further, the total number of working hours including overtime shall not exceed:

a. Ten hours in any day except on the day of stock-taking and preparation of accounts, and

b. Fifty hours in three continuous months.

The provisions are enlisted in the acts as mentioned below:

Legislation – Karnataka shops and commercial Establishment Act 1961 and Rules 1963

A. Section 8 – Where an employee works in any establishment for more than nine hours in any day or more than forty-eight hours in any week, he shall in respect of such overtime work be entitled to wages at twice the rate of normal wages.

• Definition – For the purposes of this section, ”normal 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.

B. Section 9 – The periods of work of an employee in an establishment each day shall be so fixed that no period shall exceed 5 hours and that no such person shall work for more than 5 hours before he has had an interval of rest of at least 1 hour.

C. Section 10 – The Periods of work of an employee in an establishment shall be so fixed that inclusive of his interval for rest, they shall not spread over more than 12 hours in any day.

D. Section 12 (4) – No employee in any establishment shall be required or allowed to work for more than nine hours on any day and forty-eight hours in any week.

Provided that, the total number of hours of work including overtime shall not exceed ten hours in any day except on the day of stock-taking and preparation of accounts.

Provided further that, the total number of overtime hours worked by an employee does not exceed fifty hours in a period of three continuous months”.

Legislation – Minimum Wages Act and Karnataka Minimum Wages Rules, 1958

A. Rule 28(1): When a worker works in an employment for more than nine hours on any day or more than forty-eight hours in any week or more than the hours of work notified under sub-rule (6) of Rule 25, as the case may be, he shall in respect of overtime work be entitled to wages at double the ordinary rate of wages.

• Definition: Explanation to the rule 28(1):- The expression ‘Ordinary rate of Wages’ means the basic wage plus such allowances including the cash equivalent of the advantages accruing to the person employed through the concessional sale of food grains and other articles as such person is for the time being entitled to but does not include bonus.

Part B – When an employee is made to work on a National Holiday or a Festival Holiday

If the employee is made to work on a National Holiday or a festival holiday, then he shall be paid twice the wages or avail himself a substituted holiday with wages on any other day.

Legislation – Karnataka Industrial Establishments (National and Festival Holidays) Act, 1963 and Karnataka Rules, 1964

A. Section 5: – Wages. – (1) Notwithstanding any contract to the contrary, every employee shall be paid wages for each of the holidays allowed to him under Section 3 and 3A*. (2) Where an employee works on any holiday allowed under Section 3 and 3A* he shall, at his option, be entitled to

• • twice the wages; or
  • wages for such day and to avail himself of a substituted holiday with wages on any other day.

B. *Section 3 – Grant of National and Festival Holidays:

a. Every employee shall be allowed in each calendar year, a holiday of one whole day on the 26th January, 15th August, 2nd October and five other holidays each of one whole day for such festivals as the employer may specify, from out of the list of festivals specified in the Schedule appended to this Act in consultation with the trade unions or in the absence of any trade union in consultation with the employees or their authorized representatives in such manner as may be prescribed: Provided that except in the case of Industrial establishments owned or controlled by the Government of India, the number of such other holidays shall be seven including the first day of May and the first day of November.

b. Whenever there is any disagreement between the employer and employees or the trade Unions concerned as to the festivals to be allowed as holidays during each calendar year the employer or the employees of the concerned Trade Union shall refer the dispute to the Inspector, having jurisdiction over the area in which the Industrial establishment is situated, for his decision and his decision shall be final.

C. Section 3A – Grant of Holidays on the polling day, for the House of the People or to the State Legislative Assembly:—

a. Notwithstanding anything contained in section 3, when a general election to the House of the People or to the State Legislative Assembly or an election to fill up any casual vacancy in the House of the People or the State Legislative Assembly is held under the Representation of the People Act, 1951 (Central Act 43 of 1951), every employee (other than an employee in an Industrial establishment owned or controlled by the Government of India) whose name is included in the electoral roll of the constituency where such election is held, shall be allowed on the polling day, a day’s paid holiday to enable him to exercise his franchise.

• • Definition: 2(7):- “wages” means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of the work done by him in such employment, and includes,
• such allowances (including dearness allowance) as the employee is for the time being entitled to;
• the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles;

but does not include,

• any bonus;
• any contribution paid or payable by the employer to any pension fund or provident fund, or for the benefit of the employee under any law for the time being in force;
• Any gratuity payable on the termination of his service;
• Any sum paid to an employee to defray special expenses entailed on him by the nature of his employment;
• Any traveling concession.

To summarize, the important legislations that govern the rules for overtime, wages, compensatory off, leaves, etc in Shops and Establishment in respective states would be

– Shops and Establishment Act and Rules,

– Minimum Wages Act and Rules, and

– Industrial establishment Acts and Rules for National and Festival Holidays as notified by the respective states.

Disclaimer:  This is an effort by Lexcomply.com, to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts.