Is My Wife's Gratuity at Risk Due to Part-Time Work? Seeking Legal Advice on Service Continuity

My wife was working in an educational institute as a lecturer from November 2009 until 31st March 2018. However, her employment history is divided as follows:

Employment History

Nov 2009 to Nov 2012 (3 years, 1 month): Worked as a full-timer.

Dec 2012 to May 2013 (6 months, with 3 months paid and 3 months Leave Without Pay): Maternity Leave.

Jun 2013 to Dec 2013 (7 months): Worked as a part-timer.

Jan 2014 to Mar 2018 (4 years, 3 months): Worked as a full-timer.

Now, the authorities claim that her service was broken for 7 months during her part-time employment, and thus they cannot consider paying her gratuity. My queries are:

1. Is it correct to say that her service is broken when she worked as a part-timer?
2. Even if it is considered broken, could it be considered broken only for that particular year while still considering her total service excluding the 7 months?
3. I feel that she is still eligible for gratuity in this case. If she is eligible, what would be the best way to pursue this legally?

I believe she is eligible because of the following facts: There was no termination, rejoining, or any paperwork indicating a break in service. Her salary was paid via cheques during her part-time employment, whereas salary credits were made to her account when she was a full-timer. Her relieving and experience letters state that she worked from Nov 2009 to March 2018.

Please suggest the best course of action.

Per statute, only full-time continuous service is considered for gratuity.

Thank you, Jude, for the quick response. I had a feeling that part-time service is not considered; however, since her part-time employment was in between her service, I also wanted to know if her service can be considered as paused instead of broken when she was working part-time and then resumed when she continued to work as a full-timer again.

She had checked with her college principal and was told (orally) that the part-time arrangement would not affect her service. The mistake from her end, though, is that there is no written record of the same.

Dear anonymous friend,

Eligibility for Gratuity in Case of Part-Time Employment

The pertinent question arises from the events narrated in your post, culminating in the claim for gratuity for the entire service your wife rendered as a lecturer in the same educational establishment. The question is:

"Whether a spell of part-time employment in the same establishment, sandwiched consecutively between two spells of full-time employment by the same employee, would affect her continuous service as defined under Section 2-A of the Payment of Gratuity Act, 1972, so as to disentitle her for gratuity for any of the spells eventually?"

Since my search for a direct case law in this regard ended in vain, I am compelled to rely on the ratio decidendi of case laws relating to continuous service under Section 25-B of the Industrial Disputes Act, 1947, in respect of part-time employees.

Part-Time vs. Full-Time Employment in Indian Labor Law

To my knowledge, no Indian Labor Law distinguishes part-time employment from full-time employment. Of course, there are specific provisions or separate laws protecting the rights of part-time employees in countries like the U.K. and the U.S.A. Therefore, in India, whether the employment is part-time or full-time, the contract of employment between the employer and the employee remains the same. That's why the definitions of the terms denoting the person hired under the contract of employment in various Labor Laws do not make any distinction between part-time or full-time employees. You may refer to the terms "workman" under Section 2(s) of the I.D. Act, 1947, "worker" under Section 2(l) of the Factories Act, 1948, "employee" under Section 2(f) of the EPF Act, 1952, and Section 2(e) of the Payment of Gratuity Act, 1972, respectively, or "the person employed" under the various States' Shops and Employments Acts. In the last cited, there may be the qualifying phrase "wholly or principally employed in connection with the business of the establishment," which would include part-time employees if they are engaged for the principal activity of the establishment by virtue of the use of the conjunction 'or' in between. Strictly speaking, the definition of the term "employee" under Section 2(e) of the P.G. Act, 1972, is wider in meaning and scope than all other definitions cited above. Therefore, a part-time lecturer employed in a teaching institution automatically becomes an employee of the institution in view of his/her principal work being teaching, despite the limited hours of work.

Continuous Service Under the I.D. Act and P.G. Act

Juxtaposing the two definitions, Section 25-B under the former and Section 2-A under the latter, one can easily conclude that "continuous service" under the P.G. Act, 1972, is more inclusive as it treats even the interruption due to absence from duty without leave not declared as a break in service as continuous service. Therefore, with the subsistence of the existing contract of employment, the part-time service rendered by the employee has to be taken into account for the purpose of continuous service under the P.G. Act, 1972. Specifically, since the part-time service of the lady immediately follows her maternity leave, there cannot be any speculation of her gainful employment elsewhere in the spare time. So, the educated guess could be that the part-time employment could have been preferred as an alternative arrangement at the instance of the Management, which would clearly explain the absence of any record in writing.

Supreme Court's Stance on Part-Time Employment

The Supreme Court analyzed the question of whether a part-time employee would be entitled to the benefit of continuous service under Section 25-B as well as the protection under Section 25-F of the I.D. Act, 1947, in the Divisional Manager, New India Assurance Co., Ltd., vs A. Sankaralingam [AIR 2009 SC 309]. Relying on its earlier judgment in Uttaranchal Forest Hospital Trust vs. Dinesh Kumar [2008 AIR SCW 445], the Court categorically held that the question as to whether a part-time workman would be covered within the definition in Section 2(s) of the Act and whether he would be entitled to the benefit of continuous service under Section 25-B and the protection of Section 25-F is to be answered only in favor of the workman.

In light of the above reasoning, there is no doubt that the poster's wife is entitled to gratuity under the P.G. Act, 1972, for the entire period from November 2009 to March 2018.

If the Management denies gratuity on the ground of the interim part-time employment, it is advisable to file a claim for gratuity under Section 7(4)(b) of the P.G. Act, 1972, together with interest before the Controlling Authority for the area where the educational institution is situated. Since the facts of the case are complicated and different, the Authority must be appraised convincingly. Therefore, engage the services of a seasoned Advocate. Best of Luck!

I am of the opinion that in order to become eligible for gratuity under the Payment of Gratuity Act, two conditions must be fulfilled.

Condition 1

The person should be an employee under Section 2(e) of the PG Act. The term "employee" is defined in Section 2(e) of the Act as any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop, or other establishment to which this Act applies. However, it does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.

Hence, if any person has worked in the capacity of an employee as defined under Section 2(e) of the Payment of Gratuity Act, 1972, then he/she becomes eligible to receive gratuity from the employer, subject to the fulfillment of the second condition stated below. There is nothing like permanent, probation, temporary, casual, etc., for entitlement or non-entitlement of gratuity for an employee.

Condition 2

Continuous Service: The person should have completed a continuous period of five years. The term "continuous service" is defined in Section 2A of the Act. An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing order, rules, or regulations governing the employees of the establishment), lay off, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

In your case, it is an admitted fact by the School Authority that your wife has continuously worked for the period from November 2009 to March 2018, as per her relieving letter issued by them. As such, the master and servant relationship commenced from November 2009 and came to an end in March 2018. You also mentioned that there is no break in service.

You may approach the Controlling Authority under the Payment of Gratuity Act in your area and prefer a claim. You have a fit case.

Regards,
P.S. Lakshmanan
S. G. Management Services
(PAN INDIA Consultant – Labour Law Compliance, PF, ESI, P Tax, Benefit Management & POSH COMPLIANCE) - KOLKATA

Dear Shri Umakanthanji, I made a thorough reading of the post made by you regarding the eligibility of gratuity. In my view, the lady lecturer is eligible for the benefit under gratuity. The employment of the concerned employee remained unclear due to various reasons. The employee was on medical leave between Dec 2012 to May 2013, during which she was paid for 3 months and the rest of the period was Leave Without Pay (LWP), which should not be considered as a break in service.

Additionally, the transition of the employee from being a regular employee to a part-timer and then back to a full-timer has not been clarified by the management. Without a termination letter and a new appointment letter for both periods, the service should be considered continuous. In many cases, both the High Court and the Supreme Court have ruled that the service period under contract/casual/temporary positions should be counted towards the total tenure of service. (Union of India & Ors. Vs. Rakesh Kumar & Ors. [Civil Appeal No. 3938 of 2017 arising out of SLP (C) No. 23723 of 2015], [C.A. No.3939 of 2017 arising out of SLP (C) No.23725 of 2015], [C.A. No.3940 of 2017 arising out of SLP (C) No.3382 of 2016], [C.A. No.3941 of 2017 arising out of SLP (C) No.28597 of 2016], [C.A. No.4384 of 2017 arising out of SLP (C) No.821 of 2017], [C.A. No.3943 of 2017 arising out of SLP (C) No.8365 of 2017 @ CCNO.1516/2017], [C.A. No.3944 of 2017 arising out of SLP (C) No.3719 of 2017]). Also, the High Court of Madras (Superintending Engineer, Mettur Thermal Power Station, Mettur vs. Appellate Authority, Joint Commissioner of Labour, Coimbatore & Anr, 2012 LLR 1160).

Therefore, this is a strong case to fight for justice if the eligibility for gratuity is not considered.