Gratuity is to be Released by the Employer within 30 Days

Payment of Gratuity Act, 1972

KERALA HIGH COURT
Hon'ble Mr. N. Nagaresh, J.
WP(C). No. 2194/2021(Y),
Date 4 May 2021

M. Jamal, S/o S. Meera Sahib and Ors.
vs.
Trichur Co-Operative Spinning Mills Ltd. and Ors.

PAYMENT OF GRATUITY ACT, 1972 – Non-payment of financial crisis by employer – Justification of – Employer did not make payment of gratuity to retired employees – Employees made claim before Controlling Authority – Employer was directed to make payment of gratuity but in vain – Recovery Officer could not get the payment released from the employer – Employees filed writ petition seeking direction to concerned authority and employer to expedite payment of gratuity – Held, Standing Counsel submitted that the non-payment of gratuity is not due to any willful default on the part of employer but the employer is facing huge loss and livelihood of more than 250 families of current employees of the employer are affected adversely – Employer is not even able to comply with the statutory commitments – Steps are being taken to disburse gratuity which will be disbursed within six months – Accordingly, petition is disposed of directing the employers to disburse gratuity to petitioners as expeditiously as possible, within an outer limit of six months. Paras 3 and 5

For Petitioners: Sri. Binoy Vasudevan, Advocate.

For Respondent: Smt. Latha Anand, S.C.

IMPORTANT POINTS

• Gratuity amount due to the employees is to be released by the employer within 30 days from the due date.
• Gratuity amount due to the employees is to be released by the employer on first priority.
• An employer, facing acute financial crisis, not delaying payment of gratuity willfully, may be given some reasonable time to disburse the amount of gratuity to the employees.

Judgment

1. The petitioners are retired employees of Trichur Cooperative Spinning Mills Ltd. They have approached this Court, aggrieved by the inaction on the part of the respondents 1 and 2 in complying with the orders passed by the Deputy Labour Commissioner, Thrissur directing to disburse the gratuity amount payable to the petitioners under the provisions of the Payment of Gratuity Act, 1972.

2. Learned counsel for the petitioner submitted that in so far as the petitioners are concerned, applications under Section 7(4) of the Payment of Gratuity Act were considered and final orders were passed in their favour. Since the amounts were not paid, revenue recovery proceedings were also initiated. The learned counsel argued that failure on the part of the respondents 1 and 2 in disbursing the amount of gratuity cannot be countenanced.

3. The learned Standing Counsel stated that the nonpayment of gratuity is not due to any wilful default on the part of the respondents. The 1st respondent is going through a tough phase and is facing huge loss. The livelihood of more than 250 families of current employees of the establishment, are affected. The loss per month of the Company is Rs. 30 lakhs. Therefore, the respondents are not even able to comply with the statutory commitments. It is only due to the extreme financial difficulty that the 1st respondent has been unable to pay the gratuity amount. However steps are being taken to disburse the amount on seniority basis. The amount due to the petitioners will be disbursed within a period of six months.

4. The learned counsel for the petitioner pointed out that in similar circumstances, this Court has granted relief to the petitioners in WP(C) No. 8901/2019, under similar circumstances.

In view of the afore facts, this writ petition is disposed of directing the respondents 1 and 2 to disburse the amount of gratuity due to the petitioners herein as expeditiously as possible, at any rate, within an outer limit of six months.