Case Note & Summary
The petitioner, Baban S/o Rama Khakale, a retired employee of Maharashtra State Farming Corporation Ltd., filed a writ petition challenging the judgment of the Appellate Authority dated 21/03/2016 in Appeal (PGA) No.263/2016. The petitioner had worked from 1973-1974 and superannuated on 31/05/2012 with last drawn wages of Rs.6,930/- per month. A pay revision under the 5th Pay Commission was made effective from 01/01/2008, benefiting the petitioner. The dispute centered on three issues: whether weekly holidays could be added to days actually worked for computing 240 days in a calendar year for gratuity eligibility; whether the retrospective pay revision entitled the petitioner to additional gratuity; and whether interest was payable on delayed gratuity. The court noted that a chart at page 36 showed the days actually worked, and there was no dispute about the petitioner's service period. The court held that under Section 2A of the Payment of Gratuity Act, 1972, weekly holidays are deemed to be days worked for computing continuous service, and thus the petitioner had worked more than 240 days in the relevant year. Regarding pay revision, the court held that since the revision was effective from 01/01/2008, the petitioner's gratuity must be calculated based on the revised wages. On interest, the court held that under Section 7(3A) of the Act, interest at 10% per annum is payable from the date of entitlement (01/06/2012) as the gratuity was not paid within 30 days. The court allowed the petition, set aside the Appellate Authority's judgment, and directed the respondent to pay gratuity with interest at 10% per annum from 01/06/2012 within four weeks.
Headnote
A) Gratuity - Eligibility - Computation of 240 days - Weekly holidays - Under Section 4 read with Section 2A of Payment of Gratuity Act, 1972, weekly holidays are to be counted as days worked for determining continuous service of 240 days - Held that the petitioner is entitled to have weekly holidays added to actual working days for gratuity eligibility (Paras 9-10). B) Gratuity - Calculation - Retrospective pay revision - Where pay revision is made effective from a date prior to superannuation, the revised wages must be considered for computing gratuity - Held that the petitioner is entitled to additional gratuity based on revised pay (Para 11). C) Gratuity - Interest - Delay in payment - Under Section 7(3A) of Payment of Gratuity Act, 1972, interest at 10% per annum is payable from the date of entitlement if gratuity is not paid within 30 days - Held that the respondent is liable to pay interest at 10% per annum from 01/06/2012 (Paras 12-13).
Issue of Consideration
Whether weekly holidays can be added to days actually worked for computing 240 days in a calendar year for gratuity eligibility; whether retrospective pay revision entitles additional gratuity; whether interest is payable on delayed gratuity
Final Decision
Writ petition allowed. Judgment of Appellate Authority dated 21/03/2016 set aside. Respondent directed to pay gratuity to petitioner with interest at 10% per annum from 01/06/2012 within four weeks.
Law Points
- Weekly holidays are to be counted as days worked for computing 240 days under Payment of Gratuity Act
- 1972
- Pay revision with retrospective effect entitles employee to additional gratuity
- Interest at 10% per annum is payable on delayed gratuity from date of entitlement
