Page 240 - DCOM207_LABOUR_LAWS

Unit 14: The Payment of Gratuity Act, 1972

Notes


Caselet Karnataka State Road Transport Corporation, Bangalore
Rural Division, Bangalore Vs. The Deputy Labour
Commissioner and the Appellate Authority

he 3rd Respondent an employee of the Petitioner- Road Transport Corporation
on attaining the age of superannuation on 30.4.2005, was entitled to gratuity by
Tcomputing the quantum either in terms of the KSRTC Servants Gratuity Regulations,
for short Regulations or the Payment of Gratuity Act, 1972, for short Act, whichever is
beneficial. Petitioner reckoned 27 years and 6 months as the period of continuous service,
by excluding 7 years, 3 months and 22 days from out of 34 years, 9 months and 29 days,
alleging absence, leave without salary, suspension and others and accordingly, computed
` 1,70,500 as gratuity, in terms of the Regulations, from out of which was deducted ` 54,350
on the premise that the 3rd Respondent was liable to pay towards discharge of a loan
extended by the State Bank of Mysore, HSR Layout, while in service. The 3rd Respondent
aggrieved by the exclusion of the period of service and the deduction towards discharge of
loan, filed an application under Rule 10 of the Payment of Gratuity (Central) Rules, 1972,
before the 2nd Respondent- Controlling Authority. In the appeal, the Petitioner contended
that 7 years, 3 months and 22 days being the break in service and not ‘continuous service’
within the definition of the said term under Section 2(A) of the Act deserves exclusion
for computation of gratuity, since the 3rd Respondent was absent, suffered orders of
leave without salary, suspension and others while in service. It is next contended that the
3rd Respondent having not discharged the debt due to State Bank of Mysore, hence the
deduction of ` 54,350. The Court observed that the requirement of Section 2A of the Act
in order to establish interrupted service so as to treat it as break in service is the orders
passed in that regard treating the period of absence as break inservice, in accordance with
the standing orders, rules or regulations governing the employees of the establishment. In
the instant case, there is no evidence to establish orders passed by the Authorities treating
as break-in-service the period of suspension, leave without salary, absence from service
and others, since mere absence, per se, is not break-in service, breach falling within the
definition of the term ‘continuity of service’ under the Act. In that view of the matter, no
exception can be taken to the reasons, findings and conclusions arrived by the Controlling
Authority and Appellate Authority under the Act, declining to accept the plea to treat that
period as break in service, and deny a computation of gratuity by including the said period
as ‘continuous service’. The Court further held that the last contention over justification to
deduct and discharge the loan with the State Bank of Mysore, HSR Layout, is frivolous.
Sub-Sections (1) and (6) of Section 4 of the Act when read, in conjunction, the only irresistible
conclusion is deduction by way of forfeiture to the extent of damage or loss caused by the
employee during his service, from the gratuity of that employee, whose service is terminated
for any act, willful omission or negligence causing any damage or loss or destruction of
property belonging to the employer; and the gratuity payable to an employee may be
wholly or partially forfeited; if the service of such employee is terminated for his riotous
disorderly conduct or any other act of violence on his part; or if the service of such employee
is terminated for any act which constitutes an offence involving moral turpitude, provided
that such offence is committed by him in the course of his employment. The Court held
that in the instant case the service of the 3rd Respondent was not terminated for any of the
aforesaid reasons, so as to withhold gratuity on the wholly or partially so as to fall within
the Sub-Section (6) of Section 4 of the Act. That being the factual position, deduction of
` 54,350 allegedly towards discharge of the loan extended to the 3rd Respondent by the State
Bank of Mysore. HSR Layout cannot but be held to be an illegal. The Court held that the
right to gratuity is a statutory right and cannot be withheld under any circumstances, but
Contd...

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