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2005 Supreme(All) 2597
IN THE HIGH COURT OF ALLAHABAD
RAKESH TIWARI, J
Chairman-Cum-Managing Director, Fertilizer Corporation Of India Limited And General Manager, Fertilizer Corporation Of India Limited, Gorakhpur Unit - Appellant
Versus
Regional Labour Commissioner (Central) And Appellate Authority Under The Payment Of Gratuity Act, 1972, Controlling Authority And The Assistant Labour Commissioner (Central) And Shri Parvez Ahmad Ali - Respondent
Civil Misc. Writ No. 36892 of 2004
Decided on : 26-05-2005
Advocate Appeared:
For the Appellant : R.S. Misra, adv
For the Respondent: Sankatha Rai and Vijai Kumar Rai and Vinod Kumar Rai and C.S.C.
Headnote:
Apprentices - Payment of Gratuity - Section 2(e) of the Payment of Gratuity Act - Section 2(s) of the Payment of Gratuity Act - Clause 4.2 of the Voluntary Separation Scheme
Fact of the Case:
The case involved employees who were apprentices at a corporation and later sought gratuity for their training period. The corporation argued that apprentices were not entitled to gratuity under the Payment of Gratuity Act.
Finding of the Court:
The court found that apprentices were not considered employees under the Payment of Gratuity Act and that their training period could not be counted as service for the purpose of gratuity. However, the court also held that the employees were entitled to gratuity under the Voluntary Separation Scheme, which included their training period as 'service' prior to their absorption in the company.
Issues: The main issues were whether apprentices were considered employees under the Payment of Gratuity Act and whether their training period could be counted as service for gratuity payment.
Ratio Decidendi: The court held that apprentices were not considered employees under the Payment of Gratuity Act and that their training period could not be counted as service for gratuity payment under the Act. However, the court also found that the employees were entitled to gratuity under the Voluntary Separation Scheme, which included their training period as 'service' prior to their absorption in the company.
Final Decision: The writ petition and connected writ petitions were dismissed, and the employees were ordered to be paid their gratuity by the corporation in accordance with the impugned orders within a period of one month from the date of the judgment.
Rakesh Tiwari, J.
Common questions of law and facts are involved in all these writ petitions and they are, therefore, being decided by this common judgment. Writ Petition No. 36892 of 2004 is treated as leading case.
2. Writ petition No. 36892 of 20044 has been filed for quashing the order dated 30.6.2004 passed by the respondent No. 1-Regional Labour Commissioner (Central) Appellate Authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as 'the Act'), Kanpur and notice dated 29.12.2003 for payment of gratuity under Rule 17 of the Payment of Gratuity (Central) Rules issued by the Controlling authority/the Assistant Labour commissioner (Central), Allahabad- respondent No. 2.
BRIEF FACTS OF THE CASE
3. Briefly stated, facts of the case are that Fertilizer Corporation of India Limited is a multi-unit Public Sector Undertaking. Of its 5 units, one is situate at Gorakhpur. An advertisement No. 35/89 was published in newspaper by the petitioners- the Fertilizer Corporation of India Ltd., Gorakhpur Unit, Gorakhpur (hereinafter referred to as 'the Corporation'). The relevant extract of conditions for training, eligibility etc., relevant for the purpose of deciding the controversy in the writ petition are quoted below for ready reference:-
“(1) Qualifications : (a) Must have, passed :
Essential (i) High School Examination with science and Mathematics.
Or
(ii) Part 1 examination of Higher Secondary Examination, conducted by University or Board with Physics, Chemistry and Mathematics.
Or
(iii) 10th class Examination conducted by University or Board with above subjects.
(b) Preference will be given to those who have qualifications as required at (a) above plus I.T.I from the recognized institute.
(2) Age: Between 15-18 years. Relaxable up to 20 years in case of I.T.I Pass candidates or those belonging to Scheduled Caste/Tribe candidates.
(3) Period of Training : Three years.
(4) Stipend : (a) Candidates qualifications s per (a) above
Consolidated First Year : Rs. 100 p.m
Second year: Rs. 110 p.m.
Third year : Rs. 120 p.m.
(b) Candidates having qualifications as per
(b)above :
Consolidated: First year : Rs. 110 p.m
Second and third year: Rs. 120 p.m.
General: In addition to stipend, the apprentices will be eligible for free hostel accommodation, water charges, electricity and medical aid to the extent available at Gorakhpur in accordance with the rules governing this. They will not be eligible for any other allowances during apprenticeship.
Suitable reservation will be made in the case of Scheduled Caste/Tribe candidates.
Selection of a candidate as an apprentice does not guarantee any employment under the corporation but subject to vacancies and successful completion of apprenticeship, the apprentices will be eligible for appointment as Operator/Technicians Gr. II in the scale of Rs. 150-205 plus the usual Dearness Allowance and benefit of contributory Provident fund as per rules of the Corporation.
Selected candidates will have to execute a 'Bond' undertaking to serve the corporation for a minimum period of 5 years after appointment to regular post, besides the period of apprenticeship mentioned above.
Candidates already in employment of the Government or any State Undertakings should apply through proper channel.”
4. Respondent No. 3 in the present writ petition and the concerned respondent-employees in other connected cases applied for “Craftsman training” in pursuance of the aforesaid advertisement and were selected. After completing their apprenticeship of three years w.e.f. 16.11.70 to 15.11.73 they were appointed by the Corporation and they joined their service on 16.11.1973.
5. As all the units of the Corporation except Jodhpur Minding Organization suffered huge losses, reference was made to the Board of Industrial and Financial Reconstruction (B.I.F.R). The corporation was declared a sick company by the B.I.F.R vide order dated 6.11.1992. It was upheld in appeal with certain' modification by the Delhi High Court. [The Governmen
