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Abhay Nevagi & Associates

CLAIM OF GRATUITY – TO BE OR NOT TO BE?

BACKGROUND

  • An ex-employee, after being terminated, approached his ex-employer, claiming Gratuity dues;
  • Employer is a renowned Banking and Financial Institution;
  • Employer refused payment of Gratuity because the termination was on account of misconduct;
  • Ex-employee approached the Central Labour Commissioner (Controlling Authority under the Payment of Gratuity Act, 1972) to address his grievances;

CHALLENGES

  • Payment of Gratuity Act, 1972 being a beneficial legislation, Courts/Authorities tend to favour the Employees’;
  • Payment of Gratuity Act, 1972 does not prescribe specific period of limitation for claiming gratuity;
  • That Gratuity of the ex-employee was withheld on account of misconduct, was never communicated to him.

STRATEGY

  • Matter was contested before the Authority;
  • It was pointed out that the claim was made after a delay of 15 years beyond termination;
  • It was pointed out that in case of Delay Condonation Application, delay of ‘each day’ needs to be explained. The employee had provided general grounds like ill-health justifying the delay;
  • Through local intelligence, it was realized that ex-employee was working as an insurance agent, further negating the averments put forward to justify the delay;
  • Application was rejected on the preliminary issue of Limitation;

IMPACT

  • The Ex-employee approached the Employer for Settlement;
  • The amount paid by the Employer, in case of settlement was way lesser than the amount, as was claimed by the ex-employee before the matter was contested;
  • The Ex-employee shall not continue/contest this Litigation any longer being satisfied with the amount received under the Settlement Agreement;
  • The Employer is free from the ordeal and expense of Litigation;

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