Who's Accountable for Delayed Pension Payments When an Employee Faces Legal Trouble?

One employee is involved in theft cases in the office. An FIR has been filed against him. Criminal cases are being tried in two courts, and departmental inquiries have caused delays in his pension and gratuity payments for three years. Interest on the delayed gratuity has been given to him.

Responsibility for Delayed Payments

Are the office/officers personally responsible for the delayed payment of pension benefits and gratuity? Please advise.

In every organization, a hierarchical arrangement exists, and matters such as hiring and firing of employees, fixation and revision of salary/wages, transfers, promotions, and settlement of final dues on termination of employment, etc., are ultimately decided by the chief executive only. However, such decisions may be influenced by the officers at lower levels in the interest of the organization. Therefore, these officers cannot be personally held responsible for any problems that may arise later due to such decisions, unless an officer misuses or negligently exercises powers specifically delegated to them, resulting in financial losses or disrepute to the organization.

Explanation of Gratuity Payment Delay

The delay in payment of gratuity is explainable, and there is no criminal motive (mens rea in legal language) involved. Therefore, there cannot be any personal action against the deciding authorities involved in this matter. The Payment of Gratuity Act is a complete code in itself, and any action can lie therein only; the normal criminal courts have no jurisdiction. Your bona fides in the matter are clear from the fact that interest accrued thereon is being paid to the employee. Theft is an offense involving moral turpitude and is a reason sufficient to withhold the gratuity and pension until the proceedings are decided.

Alternative to Criminal Proceedings

Could you not hold a departmental inquiry and suitably punish the employee rather than wait for the criminal proceedings, which will be a long-drawn process?

The delayed payment of gratuity does not attract interest unless the delay is due to the fault of the employee (as he was under trial for his misconduct). Further, the employee is entitled to interest on delayed payment of gratuity from the date it was due until the date payment is made if the employee is acquitted of the charges.

In the instant case, no official can be held responsible for the additional financial burden for payment of interest on delayed gratuity of an employee under trial for misconduct. Conversely, whether to grant monetary benefits to the officials who succeed in forfeiting the gratuity of the employee for his alleged misconduct is a matter of consideration.

Case Detail

A case detail is given below for reference: IN THE SUPREME COURT OF INDIA, CIVIL APPELLATE JURISDICTION, CIVIL APPEAL NO. 9693 OF 2013.

To conclude, the impugned judgment of the High Court dated 17th July 2013 is not sustainable and deserves to be set aside. The disciplinary authority may proceed and conclude the pending disciplinary proceedings expeditiously and take a final decision in accordance with the scheme of Rules, 1978, read with subsection (6) of Section 4 of the Payment of Gratuity Act, 1972. Hence, you can claim interest for the period of delay. 02-Oct-2018

Regards