IN THE HIGH COURT AT CALCUTTA
RAJA BASU CHOWDHURY, J.
Food Corporation of India - Petitioner
Versus
Union of India & Ors. - Respondents
WPA No. 6354 of 2023
Decided On : 03-07.2023
PAYMENT OF GRATUITY ACT, 1972 - SECTION 2(E) - GRATUITY - EMPLOYEE - WHETHER RESPONDENT NO.4 IS AN EMPLOYEE ENTITLED TO GRATUITY - PAYMENT OF WAGES DIRECTLY TO RESPONDENT NO.4 BY PETITIONER ESTABLISHES MASTER-SERVANT RELATIONSHIP - RESPONDENT NO.4 QUALIFIES AS AN EMPLOYEE WITHIN THE MEANING OF SECTION 2(E) OF THE ACT - ORDERS OF CONTROLLING AUTHORITY AND APPELLATE AUTHORITY DIRECTING PAYMENT OF GRATUITY UPHELD.
Fact of the Case:
Petitioner, Food Corporation of India, challenged orders of Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972, directing payment of gratuity to Respondent No.4, a former contract laborer. Petitioner contended that Respondent No.4 was not its employee and was not entitled to gratuity under the FCI Staff Regulation, 1971.
Finding of the Court:
The court found that the petitioner had been making direct payment of wages to Respondent No.4, establishing a master-servant relationship. The court held that Respondent No.4 qualified as an employee within the meaning of Section 2(e) of the Payment of Gratuity Act, 1972, and was entitled to gratuity.
Issues: 1. Whether Respondent No.4 was an employee of the petitioner entitled to gratuity under the Payment of Gratuity Act, 1972. 2. Whether the orders of the Controlling Authority and Appellate Authority directing payment of gratuity were valid.
Ratio Decidendi: 1. The court interpreted Section 2(e) of the Payment of Gratuity Act, 1972, and held that the term "employee" includes any person employed for wages, whether the terms of employment are express or implied, in any kind of work in or in connection with the work of an establishment to which the Act applies. 2. The court found that the petitioner's payment of wages directly to Respondent No.4 established a master-servant relationship, making Respondent No.4 an employee within the meaning of the Act. 3. The court held that the orders of the Controlling Authority and Appellate Authority were valid and upheld the direction to the petitioner to make payment of gratuity to Respondent No.4.
Final Decision: The writ petition filed by the petitioner was dismissed. The court directed the Controlling Authority to take immediate steps for the disbursal of gratuity in favor of Respondent No.4.
JUDGMENT :
Raja Basu Chowdhury, J.
1. The present writ application has been filed, inter alia, challenging the orders dated 4th January, 2022 and 27th December, 2022 passed by the Controlling Authority and the Appellate Authority, under the Payment of Gratuity Act, 1972 (hereinafter referred to as the “said Act”).
2. It is the petitioner’s contention that at all material point of time, the job of handling and transport of food grains and for supply of casual labourers were performed by the handling contractors. The respondent no.4 was originally appointed as contract/casual labourer under the handling contractor under a two year contract period. According to the petitioner, the respondent no.4 is not its employee and had not been employed in terms of the FCI Staff Regulation, 1971 (hereinafter referred to as the “said Regulation”).
3. Notwithstanding the fact that at all material point of time, the respondent no.4 having been paid through handling contractors, and a dispute having arisen in connection with the disbursal of wages to the respondent no.4, a writ application was filed before this Hon’ble Court. The lis between the parties travelled up to the Hon’ble Supreme Court and finally by and in terms of the order dated 14th January, 2010, the petitioner had been disbursing wages directly to all such contract labourers including the respondent no.4.
4. Despite gratuity not being payable to the respondent no.4, in terms of the said Regulation or in terms of the order passed by the Hon’ble Supreme Court, the respondent no.4 had applied in Form ‘N’ before the Controlling Authority.
5. The petitioner had duly contested such proceedings. By an order dated 4th January, 2022, the Controlling Authority determined the gratuity payable in favour of the respondent no.4 and issued a notice in Form ‘R’ calling upon the petitioner to make payment of the gratuity so determined.
6. Being aggrieved, the petitioner filed an appeal before the Appellate Authority by making pre-deposit, as required under the said Act. By an order dated 27th December, 2022, the said appeal was also dismissed.
7. Challenging the aforesaid orders, the aforesaid writ application has been filed.
8. Mr. Chattopadhyay, learned advocate representing the petitioner submits that there was no employee-employer relationship between the petitioner and the respondent no.4. It is claimed that since, the respondent no.4 along with other similarly placed persons which, inter alia, includes contract labourers and casual workers, employed by FCI, were not being paid wages at par with the FCI staff, a writ application was filed before this Court, which was registered as WP No. 1491 of 1997. The same ultimately culminated in an order dated 23rd June, 1998, directing the petitioner to make payment of wages to the aforesaid casual labourers/contract labourers, at par with the wages of class IV staff of the writ petitioner.
9. Although the said order was challenged by filing an intra Court Appeal, since, the petitioner was unsuccessful in the said intra Court Appeal, a Special Leave Petition was filed before the Hon’ble Supreme Court and finally by an order dated 14th January, 2010, the said Special Leave Petition, then converted to a Civil Appeal being No.9472-73 of 2003, was disposed of with a direction to make payment of wages and other dues to the respondent no.4 and other similarly placed persons directly without involving any contractor. By referring to the aforesaid judgment Mr. Chattopadhyay submits that the Hon’ble Supreme Court while directing the petitioner to make payment of the wages directly to the respondent no.4, did not grant any relief to the respondent no.4 and other similarly placed persons, insofar as payment of gratuity is concerned. By further referring to the aforesaid order, it is contended that the Hon’ble Supreme Court did not direct payment of gratuity to the respondent no.4 and other similarly placed persons. This aspect, however, was overlooked and not at all consid
A person who receives wages directly from an employer, regardless of the mode of appointment, qualifies as an employee entitled to gratuity under the Payment of Gratuity Act, 1972.
An individual who is employed for wages in connection with the work of an establishment, regardless of whether they are appointed in terms of a specific regulation, qualifies as an employee under Sec....
Workers who are employed for wages in an establishment and have a master-servant relationship with the employer are entitled to gratuity under the Payment of Gratuity Act, 1972, regardless of whether....
Forfeiture of gratuity under Section 4(6) of the Payment of Gratuity Act, 1972 requires a co-relation between the exception and the extent of loss or damage suffered by the employer.
The court emphasized that without a clear employer-employee relationship, liability for gratuity payments cannot be placed upon the principal employer, especially in cases involving contractors.
The main legal point established in the judgment is the requirement for Authorities to consider all contentions raised by the parties and the willingness of the contractors to deposit a sum to cover ....
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