GRATUITY FOR CASUAL OR TEMPORARY WORKERS - INDIAN RARE EARTHS LTD , MADURAI HIGH COURT

Please go through the following Madurai Bench of Madras High Court , where it has held recently that for the purpose of gratuity , even the period of casual or temporary work period will be calculated for the eligibility of gratuity and for the payment of gratuity to eligible workers. Workers who were employed as casual and then after wards retrenched then taken back and became permanent employment , then gratuity should be calculated even for such casual or temporary phases of employment. This is another example where Courts had liberal interpretation in social welfare laws.

The facts of the case is given below:

Once workmen became eligible for gratuity, then, the entire length of their service must be counted, including different spells under which they were employed by the same employer. Otherwise, it would defeat the very purpose of the Payment of Gratuity Act, 1972, the Madurai Bench of Madras High Court has held.

In its order, the Court, while dismissing the writ petitions filed by Indian Rare Earths Ltd, Manavalakurichi, Kanyakumari District, a Government of India undertaking, challenging, inter alia, the common order dated September 23, 2005 of the Regional Labour Commissioner/Authority under the Payment of Gratuity Act, Chennai-600 006 in granting gratuity to workmen for the period when they (respondents) were employed on casual or temporary basis before their spell of employment as permanent workers, ruled that the entire length of service must be counted. Otherwise, it would defeat the very purpose of the enactment.

The issue

According to the petitioner, in early 1960s, when the unit was constructing the plant, the workers were employed for construction. They were later retrenched for want of work. Then, when mining operations got expanded, some workers, who were retrenched earlier, were taken back on casual or temporary rolls and subsequently made permanent. .At the time of superannuation (which were on different dates), the workers were paid terminal benefits, including gratuity. Long after their settlement of gratuity by management, the workers staked their claim for further gratuity for their first spell of employment. They moved the Controlling Authority (Assistant Labour Commissioner, Central). When the Authority held in workers' favour, the Company had come forward with the writ petitions.

Master-servant ties

The petitioner contended that the service rendered by the workers during the first spell of employment ended due to retrenchment. Their subsequent re-employment, on direct recruitment, could not be tagged on because during the interregnum period, there was no master-servant relationship that existed.

Mr Justice K. Chandru, who heard the petitions, said that if the contention of the petitioners was accepted, then it was easy for the employer to employ them in different spells and deny gratuity to them in spite of the fact that they might have put in sufficient length of service. The term ‘continuous service' under Section 25B of the Industrial Disputes Act was more or less similar to the definition under Section 2-A of the Gratuity Act. Hence, the objection of the petitioner on the findings of the Appellate Authority and Controlling Authority had to be rejected. Also, the question of delay would not arise in moving the authority.

The Judge also ruled that 3 other writ petitions of workers, M. Vairamuthu, V. Ponnaiah and N. Harikrishnan, could not be rejected as similarly placed persons were getting benefits.