Kerala High Court
Sivaraman Nair vs The Plantation Corporation Of Kerala ... on 9 September, 2004
Equivalent citations: 2005(1)KLT1
Author: M. Ramachandran
Bench: M. Ramachandran
JUDGMENT M. Ramachandran, J.
1. Petitioners in all these Original Petitions were employees of the Plantation Corporation of Kerala Limited, a Government of Kerala undertaking. On their retirement, according to the guidelines which were being followed as per the scheme prescribed by the Government, gratuity had been paid by the employer. Petitioners believed that they were entitled to a better deal, and had approached the Controlling Authority under the Payment of Gratuity Act. The complaint was that the full and eligible gratuity payable to them had been kept back and there should be a direction therefore to pay the full gratuity as legally admissible to them. They claimed that the rate should be maintained as one month wages for every completed year, but the ceiling should be as prescribed by the Act. Under the Payment of Gratuity Act, the rate is 15 days wages per year of service, with a maximum limit of Rs. 3.5 lakhs.
2. It is evident that, earlier, taking notice of the demand of the workmen of the Industry, the Government had issued orders as early as in 1989, to the effect that the employees are entitled to be paid gratuity at the rate of one month's salary for every completed year of service. At that time, upper limit of Rs. 50,000/- had been fixed as a maximum gratuity payable by the Government Order. It was revised later by Order G.O. (MS) No. 50/96/AD dated 3.2.1996, whereby the maximum limit was increased to rupees one lakh. After this revision, there are no subsequent Government Orders enhancing the upper limit.
3. The employer here had paid a maximum amount as per the Government Order, and it was in this context that the petitioners approached the Authority, with a claim that full entitlement has not been extended to them. Their claim that one month's salary for every completed year of service, and the upper limit of Rs. 3.5 lakhs was not accepted by the Controlling Authority. But, the Authority directed that the petitioners would be entitled to gratuity payable under the Payment of Gratuity Act, that is, at the rate of 15 days salary per year for every completed year of service as it would have been more advantageous. The comparative figures would illustrate the position, as given below:-
4. The second petitioner, for example in O.P. No. 6123 of 2001 was getting total monthly wages of Rs. 6,140/-. He had a qualifying service of 40 years. If the rate as per Government Order alone was taken notice of, he should have got Rs. 2,45,600/- (Rs.6140 x 40). The ceiling however had to be worked, and the maximum payment got limited to rupees one lakh, and it had been paid.
5. The Controlling Authority was of opinion that the benefit of calculation as per the Gratuity Act could not have been denied to him. Therefore, the figure was worked out at Rs. 1,41,692/-(Rs. 6140*15*40)/26. He was to be therefore paid the balance, viz. Rs. 41,692/-. In all other cases, as well excess amounts were thus payable.
6. The Controlling Authority thereby had repelled their contentions that the rate has to be maintained at one month's salary for every completed year of service. The Authority held that it had no jurisdiction to pronounce upon a claim as coming within and not in accordance with the parameters that had been prescribed by the Act. He opted to continue as a Controlling Authority under the Payment of Gratuity Act, and maintained that he had no jurisdiction to travel beyond the statute and limits, nor was enjoying powers of any original jurisdiction.
7. The Appellate Authority confirmed the orders which resulted in these petitions.
8. The contentions of the petitioners are rested on the wordings of Section 4(5) of the Payment of Gratuity Act. According to them, it was within the purview of the Controlling Authority to take notice of the service conditions, and apply such prescriptions to the terms of the Payment of Gratuity Act as well. When the service condition of the petitioners provided for payment of gratuity at the rate of 30 days per year this could be followed, could not have been ignored, and there was nothing irregular to calculate gratuity at such rate, the only prohibition being that it should not have exceeded the statutory limit of Rs. 3.5 lakhs.
9. As rightly pointed out by the authorities under the Act, this does not appear to be acceptable. As pointed out by Mr. Siri Jagan, for the respondents, the expression was only that 'nothing in the section shall affect the right of an employee to receive better terms of gratuity under any award of agreement or contract with the employer'. When it was found by the Controlling Authority that the private scheme was not advantageous, he has directed to apply the Act, which was the acceptable course. We may consider the issue in the above back drop.
10. The Gratuity Act prescribes that the payment is. of general application. It may be permissible for the parties, namely, the employees and employers to agree upon any terms of payment of gratuity, different from the one prescribed under the Act. Only restriction is that such agreement should not result in a payment of gratuity which is lesser than what is provided by the Act. There is nothing in the Act or Section 4 to indicate that in respect of calculation, the rates prescribed by the Government orders could be taken notice of, and for the purpose of ceiling limit, the prescription under the Payment of Gratuity Act is adoptable. Option is for the workmen to claim benefits as per the condition of service or in the alternate, request for applying the statutory terms. The legal position as above has been correctly understood by the Authorities when they had examined the claims presented by the workmen.
11. Reliance had been placed by the petitioners on a decision of the Bombay High Court, Ramilal C. Sharma v. Elphinstone Spinning and Weaving Mill Co. Ltd. (1984 Lab.I.C. 1703). The Court had observed that claim for granting gratuity on the basis of a settlement also could be entertained under the Act. The objection as above had been overruled by the Court, holding that being a beneficial piece of legislation, it should be construed in a manner which would advance the cause of justice. The Court, of course, noticed that a claim for gratuity under the Act was to be exclusively tried by the Controlling Authority under the Act, as laid down by the Supreme Court in State of Punjab v. Labour Court, Jullunder (1981 (I) LLJ 354). In the case before it, gratuity was being claimed on the basis of a settlement, and the Controlling Authority had jurisdiction to take cognisance of the claim, as it pertained to gratuity, as what was brought about by the settlement was only to vary the rate of amount. The Court had also adverted to a judgment of Calcutta High Court in Eastern Coal Fields Ltd. v. Regional Labour Commissioner (Central), Calcutta and Ors. (1982 (II) LLJ 324). Copy of two judgments have been produced as Exts.P3 and P4 respectively.
12. The above view has not been accepted by this Court. A contra view is taken by this Court in the reported case Ayyapjjan v. Joint Labour Commissioner (1298 (2), KLT 399). Though the argument is that the decision requires to be reconsidered. I do not think that the contention is sufficiently strong enough to be accepted. It should be relevant that the settlement directed to be relied on by the Bombay High Court did not lay down any rate over reaching the Payment of Gratuity Act. The Bombay High Court, itself in a later case, where Elphinstone Mills also were a party, had held that a claim for gratuity under an agreement has to be made not under Section 4 of the Gratuity Act, but under Section 33-C(2) of the Industrial Disputes Act. (See Dinkar Sankar Pawar v. Elphinstone Mills (1986 (2) LLN 100)). Further, appointment of Controlling Authority under Section 3 is for administration of the above said Act. Likewise, power for determination of gratuity conferred by Section 7 is also confined to gratuity payable under the Act. Sub-section 4(a) makes the position absolutely clear and certain.
13. Therefore, the Controlling Authority could have determined a claim as exclusively coming under the Act alone. Of course, a claim for gratuity other than that coming within the purview of the Act could have been adjudicated under Section 33-C(2) of the Industrial Disputes Act, by a Labour Court. In such a case also, possibly the adjudication could have been only as prescribed by the settlement, and simultaneously taking notice of the ceiling as it always was to operate as a package deal. In short, the petitioners had to face restrictions at one point or another, viz., at the rate prescribed by the Government Orders, and with a ceiling prescribed by the order, or purely under the Act. The claims as presented therefore were ambitious, but without legal backing.
14. I do not think that the Controlling Authority or Appellate Authority had committed any error in comprehending the issue. The Original Petitions are dismissed.