Home  /  OSH Code, 2020  /  Section 27

Section 27: Compensatory holidays

The Occupational Safety, Health and Working Conditions Code, 2020 (Act No. 37 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter VI: Hours of Work and Annual Leave with Wages
Competent Labour Forum
Act No. 37 of 2020
Section 26 All 143 Sections of OSH Code, 2020 Section 28

Legal Commentary & Landmark Judgments: Section 27

Section 27 of the OSH Code establishes the statutory entitlement to overtime wages at double the ordinary rate of wages for any work performed in excess of eight hours a day or forty-eight hours a week.

  • Core Legal Standard: Section 27 is the critical economic safeguard against excessive working hours.
  • Statutory Rights & Obligations: Where a worker in an establishment works on any day in excess of the number of hours constituting a normal working day (prescribed under Section 25, typically eight hours), or in any week in excess of forty-eight hours, he shall, in respect of such overtime work, be entitled to wages at the rate of twice the ordinary rate of wages.
  • Operational Statutory Rights & Obligations: The term 'ordinary rate of wages' means the basic wages plus such allowances as the worker is normally entitled to, excluding bonus and overtime wages.

Furthermore, the Code imposes statutory ceilings on the total number of overtime hours permissible in any quarter (typically 125 hours) to protect workers from physical burnout.

Key Landmark Precedents:
  • Workmen of The Associated Cement Companies Ltd. v. The Management (1964) 5 SCR 648: The Supreme Court held that double overtime wages are compensatory and penal in nature: they compensate the worker for extra physical exhaustion and penalize the employer for extending working hours beyond the statutory maximum.
  • Philips India Ltd. v. Labour Court, Madras (1985) 3 SCC 103: The Supreme Court ruled that an employer cannot contract out of the statutory obligation to pay double overtime wages by introducing consolidated salaries or arbitrary internal allowances.
Legal Commentary:

Section 27 applies across factories, commercial establishments, warehouses, and IT parks. Any contract or internal company policy purporting to pay simple overtime or compensatory time-off in lieu of statutory double wages is void ab initio and punishable under Section 102.

Section 26 All 143 Sections of OSH Code, 2020 Section 28