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The management of the sick Hindustan Photo Films, Uthagamandalam, “cannot adopt an artificial interpretation with reference to the term ‘wages' which is defined under the Gratuity Act [Sec 2(s)], and it must include not only what is paid but also what is payable to a workman,” the Madras High Court has ruled.
Hearing a writ petition by the Company challenging orders dated 31-1-2004 and 27-2-2004 of the Controlling Authority under the Payment of Gratuity Act, 1972 (Assistant Labour Commissioner), which were concurred by the Appellate Authority, directing payment of gratuity inclusive of interim relief, together with 10 per cent simple interest, Mr Justice K. Chandru observed that pending consideration of any final payment must also be taken as wage as the term wage had been defined and such a definition would receive liberal interpretation.
Principles of equity
The Judge cited a judgment by a Division Bench of this Court headed by Mr A.P. Shah, the then Chief Justice (Judgment in Selvaraj P. vs Management of Shardlow India Ltd reported in 2007 I LLJ 1048) holding that the Gratuity Act was a beneficial piece of legislation and it should receive an interpretation consistent with principles of equity and fair play. Therefore, the term ‘last drawn wage' found in Sec 4(2) of the Act should receive its full meaning and it could not give any fractured interpretation.
Employees of the Company had claimed before the Controlling Authority that the gratuity payable to them should be computed on the interim relief paid to them as part of the wage, and for non-payment, they should get 10 per cent simple interest.
The petitioner contended that they were having a scheme, and if any dispute relating to payment was raised, only arbitration would lie. With Company falling sick, employees were given voluntary retirement in 1999. Dues of employees were paid which included gratuity. Therefore, there could not be any further claim regarding gratuity.
The Judge ruled that since Gratuity Act was a special enactment, any claim for payment had to be raised before the authorities under the law, and not before any other forum. Also, the interim relief paid pursuant to a settlement u/s 18(1) could not be termed as ‘wage', and it was only interim relief. Wage, the Judge said, would include interim relief granted to workmen and same would also form part of wages.
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