The main legal point established in the judgment is that continuity of service and determination of gratuity amount are to be interpreted in accordance with the provisions of the Payment of Gratuity Act, 1972.

JUDGMENT :

1. These are cross petitions filed by the Employer-Mercedes Benz India Pvt. Ltd and by its ex-employee, Mr. Noshir Nani Desai challenging the Judgment and Order dated 4 October 2021 passed by the ‘Appellate Authority Under Payment of Gratuity Act, 1972 and Member, Industrial Court at Pune (Appellate Authority) by which the Appellate Authority has partly allowed the Appeal filed by the employer and has set aside the order passed by the Controlling Authority on 17 December 2018 with further direction that the application filed by the employee shall stand remanded to the Controlling Authority for determination of the exact amount of gratuity payable to the him as per the provisions of the Payment of Gratuity Act, 1972 (Gratuity Act).

2. It appears that the Mr. Noshir Nani Desai (Mr. Desai) was in service of Mercedes Benz India Pvt. Ltd (Mercedes-Benz) during the period 1996 to 2004. Mercedes Benz decided to post him on foreign assignment with its group company Daimler AG in Germany (Host Company). Accordingly, an Agreement of Assignment of Contract of Appointment was executed between Mercedes Benz and Mr. Desai, by which his services were placed with the Host Company. Mr. Desai continued to work in terms of the said agreement upto to 25 June 2012 when he came to be relieved by the Host Company, consequent to the resignation tendered by him on 5 April 2012.

3. The dispute is about payment of gratuity in respect of the services rendered by the employee during 1996 to 2012. Mr. Desai filed an application before the Controlling Authority under the Gratuity Act. The Controlling Authority proceeded to allow the application and directed that gratuity demanded by him of Rs. 16,51,652/- be paid. Mercedes Benz filed appeal before the Appellate Authority, which has remanded the proceedings before the Controlling Authority for determination of exact amount of gratuity payable to Mr. Desai by recordings certain findings that there is continuity between two spells of services, that cap of Rs. 10 Lakh under Gratuity Act would apply, etc. Mercedes-Benz has challenged the Order of the Appellate authority to the extent of treating two spells of services as continuous and making it liable to pay further amount towards gratuity over and above Rs.5,59,292 already paid by it. On the other hand, Mr. Desai is aggrieved by the Appellate Authority’s Order as it seeks to set aside the Controlling Authority’s Order.

4. I have heard Mr. Bhanage, the learned counsel appearing for Mercedes Benz and Mr. Rao, the learned counsel appearing for Mr. Desai.

5. The first objection of the Mercedes Benz is about severity of Mr. Desai’s relationship with Mercedes Benz upon assignment of his service with Daimler AG w.e.f. 1 March 2004. The Controlling Authority has proceeded to treat the entire services rendered from 1996 to 2012 as continuous service for the purpose of determining the entitlement of Mr. Desai for gratuity. Though, Mr. Bhanage has attempted to urge before me that the two Companies are different and therefore there is no continuity in service, I am not inclined to accept the said argument on the basis of plain reading of the Agreement which is titled as ‘Supplementary Agreement for an International Assignment (Transfer Long Term)’. The Agreement undoubtedly shows that Mercedes Benz continued to remain “Home Company” whereas Daimler AG was merely ‘Host Company’. The Agreement clearly provided that the then existing Supplementary Agreement executed with Mercedes Benz was to operate even during currency of the long term transfer/assignment with the Host Company. Thus, there can be no doubt to the position that Mercedes Benz continued to be the parent employer even during assignment/long term transfer to Daimler AG. Furthermore use of the words ‘assignment’ and ‘long term transfer’ in the title of the agreement clearly suggests that the services of Mr. Desai were merely transferred with the Host Company.

6. Mr. Bhange has relied upon Clause-5.6 of