2018 Supreme(Mad) 2039
S.MANIKUMAR, SUBRAMONIUM PRASAD
V. P. Sreedharan – Appellant
Versus
Appellate Authority, DMS Complex, Teynampet, Chennai – Respondent
Advocates:
Advocate Appeared:
For the Appellant : Mr. V.P. Sreedharan.
Judgement Key Points
- Gratuity is payable to an employee who has rendered continuous service for not less than five years on superannuation, retirement, resignation, death, or disablement. (!) (!) (!) (!) (!)
- For every completed year of service or part thereof exceeding six months, gratuity is calculated at the rate of fifteen days' wages based on the last drawn wages. (!)
- For monthly rated employees, fifteen days' wages are calculated by dividing the monthly wages by 26 and multiplying by 15. (!)
- "Wages" under the Payment of Gratuity Act means emoluments earned while on duty or leave, paid in cash, including dearness allowance, but excluding bonus, commission, house rent allowance, overtime wages, and any other allowance. (!) [21001293580008][21001293580010]
- Gratuity calculation is based solely on basic pay and dearness allowance, excluding house rent allowance, travelling allowance, city compensatory allowance, and other allowances. [21001293580010][21001293580011][21001293580014]
- Employee's last drawn salary: Basic Rs.6,800/-, D.A. Rs.6,150/-, H.R.A. Rs.8,000/-, T.A. Rs.5,900/-, C.C.A. Rs.4,150/-, total Rs.31,000/-. [21001293580001]
- Gratuity paid: Rs.1,64,365/- calculated as Rs.12,950 x 15 x 22/26 (based on basic + DA for 22 years service). [21001293580002] (!)
- Employee claimed gratuity on full Rs.31,000/- salary, amounting to Rs.3,93,641/-. [21001293580003]
- Authorities below and court upheld calculation on basic pay + DA only under Sections 2(s), 4, 7(4), and 7(7) of the Payment of Gratuity Act. [21001293580004][21001293580005][21001293580006]
- Wage slip format under Minimum Wages Central Rules Rule 26(2) and Form XI has no bearing on gratuity calculation, which follows the Payment of Gratuity Act definition of wages exclusively. (!) [p_49 to p_67][21001293580011][21001293580012][21001293580013]
- Writ appeal dismissed, confirming no infirmity in excluding other allowances from wages for gratuity. [21001293580015]
JUDGMENT :
Subramonium Prasad, J.
Instant writ appeal is directed against the order dated 20.02.2018 passed by a learned single Judge of this court in W.P. No.27527 of 2017. The learned single Judge, by the order impugned herein, has upheld the order passed by the Joint Commissioner of Labour, Chennai, which is the Appellate Authority under the Payment of Gratuity Act, 1972, which in turn, has confirmed the order passed by the Controlling Authority (Assistant Commissioner of Labour) under Payment of Gratuity Act, 1972.
2. Facts leading to the present appeal, are that the appellant, joined M/s.Sri Gokulam Chit & Finance Co (P) Ltd, having their Corporate Office at No.66, Arcot Road, Kodambakkam, Chennai - 600 024, on 26.12.1989. He resigned on 17.05.2012. He had put in about 22 years 4 months and 22 days service. His last drawn salary was Rs.31,000/-. The break-up figures of his salary are as under :
| Basic | 6,800/- |
| D.A. | 6,150/- |
| H.R.A. | 8,000/- |
| T.A. | 5,900/- |
| C.C.A. | 4,150/- |
| | 31,000/- |
3. On
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