Case Note & Summary
The petitioner, Maharashtra State Cooperative Cotton Growers' Marketing Federation Ltd., challenged orders of the Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972, which directed payment of gratuity to two employees, Kisan Gosai Dhote and Bhaurao Kisan Pachare, who had worked as Choukidars for 19 and 17 years respectively. The authorities below found that both employees worked throughout the year in the petitioner's establishment and were entitled to gratuity under Section 4(2) of the Act. The petitioner contended that the establishment was seasonal and therefore gratuity should be paid at a reduced rate under the second proviso to Section 4(2). The High Court, relying on its earlier decision in Madhaodas Janidas Mohta Ginning and Pressing Factory v. Hirabai Mohan Chavan, held that to avail the benefit of the second proviso, the employer must establish not only that the establishment is seasonal but also that the employee works only in season. Since the authorities had recorded a finding that the employees worked throughout the year, the petitioner failed to discharge this burden. The court dismissed both writ petitions, affirming the orders for payment of gratuity at the full rate.
Headnote
A) Gratuity - Seasonal Establishment - Reduced Rate - Second Proviso to Section 4(2) Payment of Gratuity Act, 1972 - The employer must establish both that the establishment is seasonal and that the employee works only in season to claim reduced gratuity. Mere categorization as seasonal is insufficient. The court upheld the authorities' finding that the employees worked throughout the year and were entitled to full gratuity. (Paras 1-3)
Issue of Consideration
Whether an employer can claim reduced gratuity under the second proviso to Section 4(2) of the Payment of Gratuity Act, 1972, merely because the establishment is categorized as seasonal, without proving that the employee worked only in season.
Final Decision
Both writ petitions are dismissed. The orders of the authorities below directing payment of gratuity under Section 4(2) of the Payment of Gratuity Act are upheld.
Law Points
- Payment of Gratuity Act
- 1972
- Section 4(2)
- second proviso
- seasonal establishment
- reduced gratuity rate
- burden of proof
Case Details
2017 LawText (BOM) (04) 101
Writ Petition No. 4542 of 2009 and Writ Petition No. 4604 of 2009
Shri K.L. Dharmadhikari, AGP for Respondent nos. 1 and 2
Maharashtra State Cooperative Cotton Growers' Marketing Federation Ltd.
The Appellate Authority Under Payment of Gratuity Act and Additional Commissioner of Labour, Nagpur; The Controlling Authority under Payment of Gratuity Act and Assistant Commissioner of Labour, Chandrapur; Kisan Gosai Dhote (amended) and Smt. Maya Baban Dhote (in WP 4542/2009); Bhaurao Kisan Pachare (in WP 4604/2009)
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Nature of Litigation
Writ petitions challenging orders of authorities under Payment of Gratuity Act directing payment of gratuity.
Remedy Sought
Petitioner sought quashing of orders directing payment of gratuity at full rate, claiming entitlement to pay reduced rate for seasonal establishment.
Filing Reason
Petitioner disputed the finding that employees worked throughout the year and claimed they were entitled to reduced gratuity as per second proviso to Section 4(2).
Previous Decisions
Controlling Authority and Appellate Authority under Payment of Gratuity Act held that employees worked throughout the year and were entitled to gratuity under Section 4(2).
Issues
Whether the employees worked throughout the year or only in season?
Whether the employer is entitled to pay gratuity at reduced rate under second proviso to Section 4(2) of Payment of Gratuity Act?
Submissions/Arguments
Petitioner argued that the establishment is seasonal and therefore gratuity should be paid at reduced rate under second proviso to Section 4(2).
Respondents (employees) contended that they worked throughout the year and were entitled to full gratuity.
Ratio Decidendi
To claim reduced gratuity under the second proviso to Section 4(2) of the Payment of Gratuity Act, the employer must establish both that the establishment is seasonal and that the employee works only in season. Mere categorization as seasonal is insufficient.
Judgment Excerpts
Merely because an establishment is categorized as seasonal establishment, does not advance the case to claim benefit under the second proviso so as to qualify for the benefit of payment of gratuity at a reduced rate.
Procedural History
The Controlling Authority under Payment of Gratuity Act ordered payment of gratuity. The petitioner appealed to the Appellate Authority, which upheld the order. The petitioner then filed writ petitions in the High Court.
Acts & Sections
- Payment of Gratuity Act, 1972: Section 4(2), second proviso to Section 4(2)
