Denying gratuity under Act is legal only if there is termination: HC
August, 16th 2007
Only when an employer made a positive termination of employee and took stand of forfeiting gratuity payable to him, the concerned appellate authority could adjudicate such forfeiture in terms of Section 7(4)(a) & (b) of Payment of Gratuity Act, Madurai Bench of Madras High Court ruled.
Mr Justice K. Chandru, who heard a petition from Mr M. Abdul Rowther, employee of Sarguna Vaidhyasalai, Tirunelveli, challenging order dated 7.6.2004 of the Joint Commissioner of Labour, Madurai (Appellate Authority under the Gratuity Act), rejecting his claim of entitlement of gratuity, said that when right of employer was not asserted at time of termination, and appellate authority having gone into issue, question of forfeiture did not arise.
According to the petitioner, his service was orally terminated by employer. The Controlling Authority (Asst Labour Commissioner, Tirunelveli) computed gratuity in favour of petitioner. Employer filed an appeal under Section 7(7) of the Act, which was allowed by the Appellate Authority (Jt Commissioner of Labour, Madurai).
The judge held that invoking Section 4(6) arose only when the petitioner was terminated for any which involved wilful negligence or causing damages to the employer. Stand of the employer was that they never terminated the service of petitioner. Therefore, to raise such a plea before the Controlling Authority did not arise. The order of the Appellate Authority was, therefore, set aside, and a writ petition was allowed.