Impermissibility of contracting out of statutory welfare benefits

Industrial settlements, administrative circulars, or unilateral employer directives cannot be deployed to deprive workmen of the beneficial provisions guaranteed under the Factories Act. The superior bargaining position of management often compels workers to acquiesce to unfavorable working conditions or compromised wage calculations out of economic necessity. Statutory mandates designed to protect labour against exploitation cannot be waived or contracted out of by either the employer or the employee. If employers were permitted to bypass overtime rules through administrative orders, the entire socio-economic objective of the enactment would be frustrated. The courts have repeatedly affirmed that workmen cannot be penalized or denied rightful dues on the grounds that they allegedly acquiesced to irregular practices. The legal obligation to pay double the ordinary rate of wages inclusive of all eligible allowances remains absolute and non-negotiable. Consequently, attempts by defence production units to deny proper overtime calculations based on subordinate instructions are legally void ab initio. The protection afforded by Chapter VI of the Act stands as an unyielding statutory floor below which no employer can drop. (Union of India & Others v. Heavy Vehicles Factory Employees' Union and Another | 2026 INSC 74)