Employees in seasonal establishments are entitled to gratuity at the rate of 7 days wages per year

M/s. Maliana Co-operative Cane Development Union Ltd., Meerut

Vs

Tej Ram Sharma and Others


Facts of the Case:

Respondent Mr. Tej Ram Sharma worked with petitioner M/s. Maliana Co-operative Cane Development Union Limited. On retirement he was not paid any amount in form of gratuity. Hence, he filed an application under the Payment of Gratuity Act, 1972 (the Act). The Controlling Authority under the Act held that the provisions of the Act will apply to the petitioner despite it being a seasonal establishment. But it did not accept respondent’s claim for gratuity at the rate (15 days wages per year) applicable to employees of regular establishments. The Controlling Authority under the Act entitled the respondent to receive gratuity at the rate of 7 days wages per year. It directed the petitioner to pay gratuity amount as decided within 30 days, failing which petitioner will have to pay the amount with compound interest at the rate of 9% per year. Petitioner challenged this decision before the appellate authorities but the appeal was dismissed.

Hence, this writ petition was filed before Allahabad High Court. The petitioner argued that as their employees are governed by the U.P. Co-operative Societies Act and the Cane Societies Employees Service Regulations 1975, the Act will not apply.

Decision:
Relying on settled judgement in the case of Member Secretary Co-operative Bank Centralised Service vs. Appellate Authority under Payment of Gratuity Act, 2007 the High Court observed that the Payment of Gratuity Act governs even the establishments covered under the U.P. Co-operative Societies Act. Thus, the High Court dismissed the petition upholding the Controlling Authority’s decision to pay gratuity at the rate of 7 days wages per year to the respondents.

 

Source:Labour Law Reporter, Pg no. 26, Allahabad High Court, January, 2010.

 

Also Check: Other Legal Aspects

 

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