Supreme Court Ruling: Can Gratuity Be Denied for Misconduct-Related Termination Only?

Friends,

The Supreme Court has held that gratuity can be denied only when there is termination on account of misconduct. It is not enough that the alleged misconduct constitutes an offense involving moral turpitude as per the report of the domestic inquiry. Please refer to the attached order dated 6.12.2016 in this regard.

Thanks

Observations on Gratuity and Misconduct

Analyzing the judgment of the Apex Court and the facts narrated therein, as they are from the award of the Labour Court and the orders of the honorable High Court, I have some observations with due regard to the reasoning of the High Court for depriving the workman of his gratuity and the Apex Court's orders setting aside the same and granting the relief of gratuity also.

Termination and Gratuity Entitlement

Termination arising out of any proven misconduct involving moral turpitude or riotous behavior cannot, ipso facto, result in the automatic disentitlement of gratuity for the dismissed employee. There should have been a notice issued under Section 4(6) of the Payment of Gratuity Act, 1972, to that effect by the employer before the time limit fixed for its payment. The fact of the issuance of such a notice by the management soon after the dismissal is not ascertainable from any of the lower forums' orders.

The Payment of Gratuity Act, 1972

Since the Payment of Gratuity Act, 1972, itself is a complete code relating to the matter of gratuity due to employees, it is pertinent to mention that there is also no reasoning in the High Court's orders disentitling gratuity when the employer had not actually opted to do so.

Regards

Gratuity Eligibility After Termination

I worked at Aircel Limited, Tamil Nadu, as a Zonal Sales Manager. I joined on January 2, 2015. The company provided termination/exit letters to all employees due to fund shortages, insolvency proceedings, and manpower reduction. My last working date was August 16, 2019. In total, I worked for 4 years, 7 months, and 15 days. The company's HR department stated that I am not eligible for gratuity due to less than 4 years and 8 months of service.

My Questions Are:

1. I did not resign; they only issued a termination/exit letter.
2. The letter mentioned 2 months of basic pay as the notice pay period as per the offer letter contract agreement.
3. Currently, around 200-250 employees are still working.

When I reached out to the Central Public Grievance Management System (CPGMS), they directed me that I am eligible for gratuity and advised me to file a complaint at the regional labor office. I have filed the complaint, and the case went to trial today. The opposing management team presented a letter stating that I am still not eligible due to not completing 4 years and 8 months. What should I do?

Kind regards