The definition of 'wages' under the Payment of Gratuity Act excludes variable pay; thus, it cannot be included in gratuity calculations.

JUDGMENT :

M. K. Thakker, J.

1. Rule returnable forthwith. Learned advocate Mr.Bhuvnesh Gahlot waives service of Rule on behalf of the respondent No.4. Learned AGP Ms.Bhati waives service of Rule on behalf of the respondent-State.

2. Since the issue raised in the these petitions are similar, they are being decided by a common judgment. Facts of Special Civil Application No.17409 of 2022 is taken for consideration of the disposal of these petitions.

3. This petition is filed under Article 226 and 227 of the Constitution of India challenging the order dated 17.03.2021 passed by the learned Controlling Authority and the order dated 31.05.2022 passed by the learned Appellate Authority under the Payment of GRATUITY ACT , 1972 directing the present petitioner to include the variable pay for the purpose of calculation of gratuity with 10% simple interest.

4. The case of the present petitioner is that they are engaged in the printing and publication of newspapers across the length and breadth of the country, with several industrial establishments located nationwide, including one at Ahmedabad. The respondent was employed as a VDT Operator since 19.06.1979 and, upon completion of 35 years of qualifying service, retired on 06.09.2013. His last drawn wages were Rs.24,259.50 per month (comprising Basic Pay of Rs.11,425.00 and Variable Dearness Allowance of Rs.12,834.50). Based on the said last drawn wages, gratuity amounting to Rs.4,75,859/- was paid under the Payment of GRATUITY ACT , 1972, and the same was received by the respondent without any demur. Thereafter, an application under the Payment of Gratuity (Central) Rules, 1972 was submitted by filling Form No. N, claiming the differential gratuity amount of Rs.7,02,406/-, contending that the component of variable pay was not considered while calculating the gratuity. The petitioner appeared before the learned Controlling Authority and objected to the claim for the differential amount. After considering the submissions made by both parties, the learned Controlling Authority, by order dated 17.03.2021, directed the petitioner to pay an amount of Rs.2,09,954/- along with simple interest at the rate of 10%. Aggrieved, the petitioner preferred an appeal before the learned Appellate Authority, which was dismissed by order dated 31.05.2022. The said order is the subject matter of challenge before this Hon’ble Court.

5. Heard learned Senior advocate Mr.Sudhir Nanavati with learned advocate Mr.Vandan Baxi for the petitioner and learned advocate Mr.Bhuvnesh Gahlot with learned advocate Mr.AM Bhatasara for the respondent No.4. Learned AGP Ms.Surbhi Bhati for respondent No.1, 2 and 3.

6. Learned Senior Advocate Mr. Nanavati submits that both the Authorities have erred in not considering the fact that the petitioner, being a newspaper establishment, is governed by the provisions of the Working Journalists and Other Newspaper Employees (Conditions of Service and Miscellaneous Provisions) Act, 1955 and the wage Board namely Majithia Wage Board was constituted under the Working Journalist Act, 1955. The recommendations of the Majithia Wage Board, constituted under the 1955 Act, were approved by the Hon’ble Apex Court and as per the recommendation of the Majithia Wage Board, the variable pay was introduced by the Board. According to the Board’s report, 'basic wages' as defined under Section 1, Chapter XIX, refers to wages drawn in the prescribed scale of pay, including stagnation increments, if any