Judges : N.D.P.NAMBOODIRIPAD
FIBRE FOAM (P) LTD. - Appellant
Versus
KANNAN NAIR - Respondent
Case No : M.F.A. No. 278 of 1978
Decided On : 11/23/1979
Advocates Appeared :
T.C.N. Menon; For Appellants P. Balagangadharan Menon; For Respondents
Respondents 1 and 2 were retired from service by the petitioner on the ground of exceeding the age of 58 years. They filed petitions under S.33C(2) of the Industrial Disputes Act 1949 for retrenchment compensation. The petitioner contended that the termination constituted retrenchment and that the Labour Court had no jurisdiction. The court held that the acceptance of gratuity under the Payment of Gratuity Act, 1972 estopped respondents from contending otherwise. It also ruled that S.33C(2) could not be invoked when the liability of the employer and the right of the employee to receive compensation were in dispute. The termination issue could only be decided by a reference under S.10 of the Act. The court set aside the compensation award and dismissed the petitions.
Fact of the Case:
Respondents 1 and 2 were retired from service by the petitioner on the ground of exceeding the age of 58 years. They filed petitions under S.33C(2) of the Industrial Disputes Act 1949 for retrenchment compensation.
Finding of the Court:
The court held that the acceptance of gratuity under the Payment of Gratuity Act, 1972 estopped respondents from contending otherwise. It also ruled that S.33C(2) could not be invoked when the liability of the employer and the right of the employee to receive compensation were in dispute.
Issues: The main issue was whether the termination constituted retrenchment and if S.33C(2) could be invoked when the liability of the employer and the right of the employee to receive compensation were in dispute.
Ratio Decidendi: The court ruled that the termination issue could only be decided by a reference under S.10 of the Act and that S.33C(2) could not be invoked when the liability of the employer and the right of the employee to receive compensation were in dispute.
Final Decision: The court set aside the compensation award and dismissed the petitions.
1. Respondents 1 and 2 in this case were employees of the petitioner, which is a firm. The petitioner issued Exts. P2 and P3 dated 13-11-1974 retiring respondents 1 and 2 from service on the ground that they have exceeded the age of 58 years. Respondents 1 and 2 received gratuity and other retirement benefits. Later on respondents 1 and 2 filed two petitions before the 3rd respondent, which is the Labour Court, Kozhikode as C.P. No. 2 of .1976 and C. P. No. 3 of 1976 under S.33C(2) of the Industrial Disputes Act 1949 (shortly the Act). The petitioner, which was the respondent in those cases, contended that the 3rd respondent had.no jurisdiction to entertain the two petitions and that since the two petitioners therein were retired on attaining the age of superannuation the questions of retrenchment and payment of compensation did not arise. Those contentions were turned down and the 3rd respondent passed Ext. P1 order. In C. P. No. 2 of 1976 the respondent therein was directed to pay Rs. 1,834.50 as retrenchment compensation and in C. P. No. 3 of 1976 the compensation determined was Rs. 2,374.95. The petitioner challenges Ext. P3 award.
2. The first contention urged by the petitioner before me is that respondents 1 and 2 are precluded from contending that they were not sent out on attainment of the age of superannuation and that the termination of their services constituted retrenchment within the meaning of the Act. It is hot disputed before me that the contract of employment did not specify that the concerned workmen have to retire on attaining 58 years. The contention of the petitioner is therefore founded on the Payment of Gratuity Act, 1972 (briefly Act 39 of 1972). It is undisputed that respondents 1 and 2 received gratuity from the petitioner-employer. Payment of gratuity is governed by S.4 of Act 39 of 1972. Sub-section (1) of S.4 which alone is relevant for the purpose of this case may be read:
"4. Payment of gratuity (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five-years
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of the employee is due to death or disablement:
Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs.
Explanation For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.'
The expression 'superannuation' is defined in S.2(r) of the above Act. That provision also may be read: "(r) "superannuation", in relation to an employee, means
(i) the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment; and
(ii) in any other case, the attainment by the employee of the age of fifty-eight years;"
By the aforesaid definition it follows that in cases where the contract of employment does not specify the age of superannuation, the attainment of the age of 58 years by the employee would amount to "superannuation". Gratuity was received by respondents 1 and 2 from the petitioner-employer under the relevant provisions of Act 39 of 1972. The 3rd respondent proceeded on the basis that the age of superannuation mentioned in Act 39 of 1972 cannot apply when rights under the Act are adjudged. Technically that proposition is correct. Here the question of superannuation arises because of the acceptance of gratuity under Act 39 of 1972. Having obtained the benefits under Act 39 of 1972 it is not open to respondents 1 and 2 to contend later that for the purpos
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.