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ALOK ARADHE, J. SREENIVAS RAO
Electronics Corporation of India Limited – Appellant
Versus
Appellate Authority under Payment of Gratuity Act, 1972 – Respondent
JUDGMENT :
Alok Aradhe, CJ.
1. Mr. G.Vidyasagar, learned Senior Counsel representing Ms. K.Udaya Sri, learned counsel for the appellant.
Mr. B.Narasimha Sharma, learned Additional Solicitor General of India representing Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India for respondent Nos.1 and 2.
Mr. P.V.Krishnaiah, learned counsel for respondent Nos.3 to 5.
2. This intra court appeal emanates from an order dated 03.06.2024 passed in W.P.No.15840 of 2018 by the learned Single Judge, by which writ petition preferred by the appellant has been dismissed and orders of the Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as "the Act") have been upheld. In order to appreciate the grievance of the appellant, relevant facts need mention which are stated infra.
3. The appellant, namely Electronic Corporation of India Limited (hereinafter referred to as 'the Corporation') is a central public sector undertaking. The employees of the Corporation, in respect of payment of gratuity, are governed by the Act.
4. The Government of India, Ministry of Heavy Industries and Public Enterprises, had set up a Pay Revision Committee und
The office memorandum dated 26.11.2008 is binding on the Corporation and constitutes an agreement under Section 4(5) of the Payment of Gratuity Act, 1972.
The Office Memorandum dated 26.11.2008 is advisory and does not impose a binding obligation on public sector undertakings to pay enhanced gratuity prior to the amendment of the Gratuity Act.
State government employees are excluded from the Payment of Gratuity Act, and their gratuity entitlement is regulated by separate Pension Rules, confirming a ceiling limit of Rs. 4 lakh.
The main legal point established in the judgment is that the Payment of Gratuity Act, 1972 applies to the respondent-Corporation and its employees, and the Act's provisions have an overriding effect ....
The court affirmed the applicability of revised gratuity limits as per the Central Government notification and ruled that financial constraints do not exempt employers from timely payment of gratuity....
Employers can provide higher gratuity than the statutory minimum under the Payment of Gratuity Act if a valid scheme or agreement exists, as affirmed by the company's resolution.
The Gratuity Act provides overriding rights for gratuity claims that cannot be denied unless specifically exempted by law, even when alternative welfare benefits exist.
The revised ceiling limit of gratuity under the Payment of Gratuity Act, 1972 applies to all employees, overriding state regulations that set lower limits.
The court established that separate periods of employment can be treated independently for gratuity calculations, allowing employees to receive full gratuity for each distinct period of service witho....
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