Gujarat High Court
Judgename :A.S.QURESHI, P.S.POTI
FOOD CORPORATION OF INDIA - Appellant
Versus
DYANUBA K.NIKAM - Respondent
S.C.A. 3903 of 1984
Decided On : 09/21/1984
Payment of Gratuity Act 1972 – Sec. 4 – Payment to employees – Food Corporation of India who is the employer challenges orders passed by the Controlling Authority under the Payment of Gratuity Act 1972 as confirmed by the Appellate Authority under the said Act – Dispute relates to such pay ment to the employees who are members of the Transport and Dock Workers Union – Held, Evidently the plain and explicit language of the Explanation has not been noticed and where express provision was made in that behalf notions of what should have been the provision cannot be substituted – Approach is erroneous and obviously both the authorities have misled themselves – Hence the gratuity will be limited to that earned during the period the employee was on wages not exceeding Rs. 1000. 00 and such gratuity will be calculated in accordance with the Explanation in sec. 2 (e) namely on the basis of wages received by the employee during the period he was employed on wages not exceeding Rs. 1000. 00 per mensem – Order of the Controlling Authority under the Payment of Gratuity Act as confirmed by the Appellate Authority is modified as above – It is agreed that the amount as computed in accordance with the Explanation to sec. 2 (e) as explained here has already been paid to the. respondents in these cases – Nothing more remains to be paid the accounts having been settled – Petitions Allowed.
( 1 ) SAME question arises in all these petitions. The Food Corporation of India who is the employer challenges orders passed by the Controlling Authority under the Payment of Gratuity Act 1972 as confirmed by the Appellate Authority under the said Act. The dispute relates to such pay ment to the employees who are members of the Transport and Dock Workers Union. The controversy is quire simple. There may be employees who start their career on a salary below Rs. 1 0 and in the course of their career get enhanced salaries. When such salary exceeds Rs. 1000. 00 per mensem (Rs. 1 600 per mensem after the amendment under Act 25 of 1984 ). Such persons are no longer entitled to claim that they are employees entitled to gratuity under the Payment of Gratuity Act 1972 The definition of employee without the Explanation thereto would operate to exclude any person employed on wages exceeding Rs. 1 0 per mensem as it stood prior to amendment by Act 25 of 1984 and Rs. 1 600 per mensem after such amendment. Under sec. 4 of the abovesaid payment of Gratuity Act gratuity is payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years. Such payment is on (a) superannuation or (b) retirement or resignation or (c) death or disablement due to accident or disease. Entitlement to gratuity under sec. 4 being limited to employee if the definition stood without the Explanation a person who is receiving more than Rs. 1 0 on the date of is retirement prior to Act 25 of 1984 would not be entitled to gratuity at all. It would be so even if a part of his service was on a salary not exceeding Rs. 1 0 It is to meet this situation that the Explanation is enacted. He would have earned gratuity had he been in receipt of salary not exceeding Rs. 1 0 per mensem. Such service he did have and in the period of such service exceeds 5 years he would naturally be entitled to gratuity. Such gratuity is payable on happening of one or other of the several incidents mentioned in sec. 4 (1 ). the case here is one of retirement. So it would be payable on retirement. But even on retirement sec. 4 (1) will not apply to him unless it is read with the Explanation to the definition of the term employee under sec. 2 (C ). That explanation reads:-"explanation :- In the case of an employee who having been employed for a period of not less than five years on wages not exceeding one thousand rupees per mensem is employed at any time thereafter on wages exceeding one thousand rupees per mensem gratuity in respect of the period during which such employee was employed on wages not exceeding the one thousand rupees per mensem shall be determined on the basis of the wages received by him during that period".
( 2 ) THAT Explanation enables an employee who is on wages exceeding Rs. 10 on the date of retirement to claim gratuity nevertheless. But apparent by on a prima facie reading of the Explanation it would appear that it provides for such gratuity in respect of the period during which such employee was employed on wages not exceeding Rs. 1 0 per mensem. It further provides that the gratuity for such period shall be determined on the basis of wages received by him during that period. If the provision is in addition to gratuity otherwise available to the employee of course the Explanation need not be read as negativing the availability of such gratuity otherwise. Plainly it speaks only of the entitlement of gratuity for the period during which the employee was on wages not exceeding Rs. 10 per mensem. It is not as if there is any other provision in the Act which enables the employee to claim gratuity even for the service wages exceeding Rs. 10 per mensem. The entitlement to wages of a person who is on wages of more than Rs. 10 per mensem on retirement has necessarily to be founded on the Explanation. If so since it speaks only of entitlement to gratuity for the period for which the employee was employed on wa
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