Bakshish Singh, the employee joined the services of the M/s Darshan Engineering Works as a Fitter on March 2, 1968 and resigned from service on December 10, 1978 after a total period of continuous service of more than 10 years. His last drawn wages were Rs 335 per month. It is not disputed that at the time he joined the employment on March 2, 1968, his age was 54 years 3 months, his date of birth being December 17, 1913. This was known to the employer.
The Gratuity Act came into force September 21, 1972.
On the employee's resignation December 10, 1978 which was accepted by the
employer, he claimed gratuity under Section 4(1)(b) of the Act. His claim not having
been accepted, he approached the Controlling Authority under Section 7 of the Act. The claim was resisted
by the employer on the ground firstly that the employee was entitled to
gratuity only till the date he reached his superannuation age which was 58
years and since he had not completed 5 years of service by the time he attained
58 years of age, he was not entitled to gratuity under Section 4(1) of the Act. Secondly, it was
contended that in any case the amount of gratuity payable to the employee was
only for the period upto the superannuation age and since he was drawing wages
of Rs 230 per month on the day he attained the superannuation age, he was
entitled to a sum of Rs 460 only, being the gratuity calculated at the rate of
15 days' salary per year of service till the date of superannuation.
Section 4(1) provided for payment of gratuity to
the employee on the termination of his employment after he has rendered
continuous service of not less than five years on the occurrence of any of the
three events viz., (a) on the employee reaching his superannuation age, or (b)
on his retirement or resignation, or (c) on his death or disablement due to accident
or disease. In case of the third event, the qualifying continuous service of
five years is not necessary. in the present case the employer had not
chosen to superannuate the employee on his attaining 58 years of age and had
continued him in service till the employee himself resigned on December 10,
1978 by which date he had completed more than 10 years of service, the employee
was entitled to the gratuity for the period of his entire service upto the date
of his resignation. The Controlling Authority, therefore, calculated the amount
of gratuity due to the employee as Rs 1782 at the rate of 15 days' wages per
year of service for all the IO years taking the last drawn wages of Rs 3 35 per
month as the basis of the said calculation. This order was challenged by the
employer before the Appellate Authority under the Act.
Employee are directed against the
decision of the Punjab and Haryana High Court whereby the High Court has struck
down Section
4(1)(b) of the
Payment of Gratuity Act, 1972 (hereinafter referred to as the 'Act') as being
violative of Article
19(1(g) of the
Constitution of India.
The Judgment of the
Court was in the result, we allow
the appeals, set aside the decision of the High Court and uphold the validity
of Section
4(1)(b) of the Payment of Gratuity
Act, 1972. The Employer has to pay the costs.
Post a Comment