Supreme Court Ruling: Can Gratuity Be Forfeited Without a Criminal Conviction?

Supreme Court Clarification on Gratuity Forfeiture

Regarding the statement "Criminal conviction is not a prerequisite for forfeiting an employee's gratuity" - as clarified in a Supreme Court case. The Honorable Supreme Court clarified that for the purpose of forfeiting gratuity, an employee found guilty of 'moral turpitude', a 'criminal conviction' by a competent court is not a prerequisite. Please read the gist of the Supreme Court's judgment attached herewith. The location is Bangalore, India.

The Supreme Court of India has indeed clarified that a criminal conviction is not a prerequisite for the forfeiture of gratuity if an employee is found guilty of 'moral turpitude'. However, each case is determined on its individual merits. It's important to note that 'moral turpitude' is a legal concept and the interpretation can vary. Therefore, the employer must have substantial evidence of the act of moral turpitude committed by the employee.

The Payment of Gratuity Act 1972 outlines the conditions under which an employer can withhold gratuity. As per Section 4(6) of the Act, gratuity can be forfeited if an employee's services have been terminated due to his/her riotous or disorderly conduct or any other act of violence, or if he/she has been found guilty of an offense involving moral turpitude, during the course of his/her employment. However, the entire gratuity can be forfeited only if the offense involves moral turpitude.

If you find yourself in a situation where your gratuity is being forfeited, it would be prudent to seek the advice of a labor law expert or a legal professional to understand your rights and the course of action you can take.