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2025 Supreme(Mad) 4544

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P. Dhanabal, J.
The Managing Director, Dharmapuri District Co-operative Sugar Mills Ltd. - Petitioner
Versus
The Appellate Authority / Additional Commissioner of Labour and ors. - Respondents
W.P. No. 22762 of 2022 and W.M.P. Nos. 21802 and 21806 of 2022
Decided On : 11-06-2025

Advocates:
Advocate Appeared:
For the Petitioner: Mr. R. Balaramesh
For the Respondent:Mr. G. Ameedius, Government Advocate, Ms. D. Geetha

Gratuity entitlements under the Payment of Gratuity Act apply equally to all employees regardless of employment classification, ensuring rights of workers with over 20 years of service.

Headnote:(A) Payment of Gratuity Act, 1972 - Section 4 - Gratuity calculation - Employees with over 20 years of service are entitled to gratuity irrespective of seasonal employment status - Appellate Authority affirmed this principle, emphasizing the applicability of circulars issued by the Commissioner of Sugars - Dismissal of writ petition upheld due to lack of evidence for continuous employment. (Paras 4, 6, 7)

(B) Employment Law - The principle established that casual and temporary workers are equally entitled to gratuity calculation under the Act regardless of classification as NMR or otherwise - Note on the substantial compliance of procedural norms in the submission of claims under the Act. (Paras 6, 8)

Facts of the case:
The petitioner challenged the decision of the Appellate Authority which upheld the gratuity calculation for a workman claiming over 20 years of service against the management's argument based on employment classification.

Findings of Court:
The Appellate Authority's finding of the validity of prior circular instructions overruled management's claims about classification restrictions on gratuity.

Issues: The court addressed whether the Appellate Authority erred in its application of gratuity entitlements based on service length and employment classification.

Ratio Decidendi: The court reasoned that the length of service must be calculated without discrimination between casual and regular employees, emphasizing the fundamental intent of the Payment of Gratuity Act.

Result: Writ petition dismissed.

Table of Content
1. discussion on employee entitlement to gratuity. - What constitutes eligibility for gratuity under the Payment of Gratuity Act? (Para 1)
2. eligibility for gratuity based on service period. - What constitutes eligibility for gratuity under the Payment of Gratuity Act? (Para 2 , 3)

ORDER :

P. Dhanabal, J.

When the case was taken up for hearing today, the learned counsel appearing for the petitioner has fairly conceded that already this Court dismissed a batch of Writ petitions through an order dated 12.09.2023 in W.P. Nos.18381 of 2022 and batch and this petition is also covered by the said judgment.

2. This Court in the order passed in W.P. Nos.18381 of 2022 and batch, in paragraph nos.7 to 9, held as follows:-

"7. Admittedly, the contesting third respondent in all the writ petitions were employed with the petitioner/Mill and they got retired subsequently, after rendering more than 40 years of service. Thereafter, the workmen claimed gratuity in terms of the calculation made under Section 4 of the Act. In their claim applications, they claimed that they put in more than 40 years of service and as per their last drawn wages, they claimed the total amount of gratuity. The Controlling Authority allowed the applications filed by the workmen, against which, the petitioner/Mill preferred appeals and the appeals were rejected for non-deposit of the gratuity amount awarded by the second respondent and the said fact was not in dispute. This Court perused the order passed in W.P.No.28325 of 2008 dated 07.02.2012 and the relevant portion of the order passed is as follows:-

2. The writ petition was admitted on 27.11.2008. Pending the writ petition, interim stay was granted by this Court after observing that the entire amount has been lying in deposit with the Controlling Authority. Thereafter, the contesting respondent filed M.P.No.1 of 2009 seeking for permission to withdraw the amount. That petition came to be disposed of by order dated 08.07.2009 permitting him to withdraw 50% of the amount lying in deposit. The Controlling Authority was directed to deposit the balance amount in any one of the nationalised banks for two years and the workman was permitted to withdraw the interest every six months.

3. It is seen from the records that the contesting third respondent was employed in the petitioner mill and got retired from service on 30.12.2003. The workman claimed that he was in employment from 27.12.1977 and after getting retired from service, he claimed gratuity in terms of calculation made under Section 4 of the Payment of Gratuity Act, 1972. In his claim application, he claims that he had put in 25 years 11 months and 3 days of service and his last drawn salary was Rs.169.80 per day and the total amount of gratuity claimed by him was Rs.66,092/-. Since there was a delay in filing the application, he has also filed I.A.No.11 of 2004 to condone the delay. This application was resisted by the petitioner mill. Notwithstanding the same, the Controlling Authority condoned the delay and took up the gratuity case on his file as P.G.No.130 of 2004. The Controlling Authority, by his order dated 25.10.2006, held that the total length of service of the workman was only 10 years and he will be eligible for gratuity at the rate of 15 days for every completed year of service and computed the gratuity at Rs.29,337/-. Before the authority, heavy reliance was placed upon the circular issued by the Commissioner of Sugars dated 25.07.1990. In the circular, the authority directed all the sugar mills as follows:

"It is hereby ordered that the employees of the co-operative and public refer sugar mills, who retire as seasonal employee will be paid gratuity at the wages per year of service provided they have put in the minimum period of twenty years of service in the mills. For the purpose of computing twenty years service, the service as NMR/Casual will not be counted. In respect of missed employees, gratuity will be paid in accordance with the pro

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