Gratuity entitlement under the Payment of Gratuity Act depends on the interpretation of 'continuous service', applicable to contractual employees.

JUDGMENT

Alok Mathur, J.

The petitioner which is a corporation of the State of U.P. has filed the present writ petition challenging the orders dated 30.3.2019 and 28.9.2022 passed by the Prescribed Authority and the Appellate Authority under the provisions of the Payment of Gratuity Act, 1972.

2. The facts in brief are that the respondent no.3 was employed with the petitioner on the basis of contract entered into between the parties on consolidated salary w.e.f. 25.6.1998. He had worked with the petitioner for a period of 9 years and his services were dispensed with on 30.9.2007 after working for 9 years.

3. Respondent no.3 had filed an application for grant of gratuity as per provisions of the Payment of Gratuity Act, 1972. He has stated that he has continuously worked with the petitioner and he was covered within the definition of 'employee' as provided in the Act of 1972 but despite his application the amount of gratuity was not paid by the petitioner, accordingly, he filed an application for Payment of Gratuity before the controlling authority/ Assistant Labour Commissioner, Lucknow.

4. The Assistant Labour Commissioner/ Prescribed Authority considered the arguments and the averments made by the opposite party no.3 and came to the conclusion that he had worked for more than 5 years continuously and was entitled for gratuity irrespective of the fact that his employment was of contractual nature.

5. It was submitted that the petitioner is a Corporation and falls within a definition of Section 2 (f) of the Act of 1972 wherein it has been provided that :-

"employer" means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop -

i. belonging to, or under the control of the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the Head of the Ministry or the Department concerned.

6. Considering the aforesaid provision it was concluded that there was no doubt that the petitioner falls under the aforesaid provisions of the Act of 1972 and 'wages' have been defined to be all emoluments which are carried by the employee while on duty or on leave and in accordance with the terms and conditions of the employment and held that the respondent no.3 was entitled to receive gratuity under the Act of 1972.

7. The petitioner being aggrieved by the order of the Prescribed Authority dated 30.3.2019 preferred an appeal before the Appellate Authority. The Appellate Authority also affirmed the findings recorded by the controlling authority and rejected the appeal by means of the judgment dated 28.9.2022.

8. It has been submitted that prior to filing of the said appeal the petitioner had deposited amount of gratuity payable to the private respondents before the controlling authority and after judgment of the appellate authority the said amount was duly withdrawn by the private respondents.

9. It seems that the petitioner did not have any grievance even after rejection of their appeal by means of judgment dated 28.9.2022 and it is only when a notice was issued on 18.7.2023 by the controlling authority for payment of interest on the amount of gratuity already paid to the private respondents then they sought direction from the State Government and after receiving legal inputs the present writ petition has been filed assailing the order of the controlling authority as well as appellate authority.

10. It has been submitted by the learned counsel for the petitioner that both the orders are illegal and arbitrary inasmuch as it has been presumed that the private