IMPORTANT POINT: The payment of gratuity act is a social and labour welfare legislation which is enacted with object to make provision for social and financial security for workmen on their retirement. The provisions of the act should be construed in a manner which would support and advance the object of the provision

K.M. Thaker, J.

1. In these petitions Surendranagar Co-operative Bank has challenged orders dated 16.5.2014, 30.6.2014, 16.5.2014, 28.1.2014, 23.8.2013, 30.9.2014, 30.9.2014, 23.8.2013 passed by the Controlling Authority appointed under the Provisions of Payment of Gratuity Act 1972 (Act for short). The petitioner bank has also challenged the order/s dated 17.1.2015, 17.1.2015, 17.1.2015, 19.9.2014, 5.2.2014, 22.4.2015, 22.4.2015, 27.6.2014 passed by the Appellate Authority appointed under the Act whereby the Appellate Authority confirmed the order passed by the Controlling Authority.

2. The respondents herein were employed by the petitioner bank and they retired from the service on attaining the age prescribed for superannuation.

2.1 After the respondents retired from service the petitioner bank paid gratuity to the respondents which they accepted.

2.2 Subsequently the employees raised dispute and claimed that the bank had short-paid gratuity inasmuch as the amount which would be payable in accordance with law was not paid and there was shortfall in the amount paid towards gratuity by the petitioner bank. The claimants based their case on the premise or allegation that the calculation of gratuity paid to the employees was not explained/provided or shown before or while making payment.

2.3 With such allegation and claim the employees invoked Section 7 of the Payment of Gratuity Act, 1972 and approached Controlling Authority by filing Gratuity Claim Applications. The Controlling Authority registered the applications of the respondents - employees and called upon the petitioner bank to file its reply.

2.4 The bank appeared before the authority and opposed the applications by filing its replies wherein the Bank claimed that it is governed by Bombay Industrial Relations Act 1946 and that in respect of various demands of the claimants including demand for gratuity, a settlement has been arrived at with representative union. The bank further claimed that since the settlement is arrived at with the representative union it is binding to the bank as well as all employees and the said settlement prescribes formula for payment of gratuity to its employees. The petitioner bank also claimed that when the respondents-employees retired from service it calculated gratuity in accordance with relevant clause under the settlement and accordingly paid gratuity. The Bank also claimed that there is no shortfall in the amount paid towards gratuity to the respondents claimants and the demand raised by them is unjustified and is not sustainable.

2.5 The claimants on the other hand contended that in view of the provisions under Section 4(5) of the Gratuity Act, the employees are entitled to receive higher benefit and if amount payable under the Act is higher than the amount payable according to the settlement then the employees have right to claim and receive such higher amount towards gratuity and vice-versa. According to the claimants amount payable towards gratuity would be higher if calculated in accordance with the formula under the Act and that therefore the employees should be paid gratuity accordingly. However the employer did not grant such benefit therefore they had to file the claim applications.

2.6 The Controlling Authority considered rival submissions and reached to the conclusion that there is difference between the amount payable under settlement (as calculated by the Bank) and calculated in accordance with the provision under the Act (as calculated by the authority). Having found such difference the authority directed the petitioner bank to pay differential amount towards gratuity.

2.7 The petitioner bank felt aggrieved by the said order of the Controlling Authority and filed appeals before Appellate Authority.

2.8 The Appellate Authority heard the contesting parties and decided the appeals whereby the Appellate Authority confirmed