Casual employees must satisfy the 240-day threshold to claim gratuity for any year.

The respondent-workman was initially engaged by Air India as a casual helper in 1993 and remained empanelled as a casual employee from 1993 to 2012.

He subsequently worked from 2013 to 2024 and was paid gratuity for that latter period, but claimed gratuity for 1993–2013, asserting that he was willing and available to work and that any shortfall below 240 working days annually resulted from the employer’s failure to provide work.

The Controlling Authority treated his service from 1993 to 2024 as continuous under Section 2A(1) of the Payment of Gratuity Act, 1972, and awarded an additional gratuity amount of approximately Rs.2,33,400/- with interest from 30 September 2024.

The Appellate Authority affirmed the decision, holding that the absence of a formal break-in-service order rendered the service continuous and obviated the need to apply the 240-day requirement under Section 2A(2).

Air India challenged both orders before the High Court.

Whether a casual employee who admittedly did not work for the requisite 240 days in the relevant years could claim gratuity for those years by invoking the concept of continuous service under Section 2A(1) of the Payment of Gratuity Act, 1972.

Whether the absence of a formal break-in-service order required the employee’s service to be treated as continuous notwithstanding that he was not actually provided work for the requisite number of days.

Whether the Controlling Authority and the Appellate Authority correctly awarded gratuity and interest for the period from 1993 to 2013.

The Court applied Section 2A(1) of the Payment of Gratuity Act, 1972, which requires uninterrupted service, subject to specified interruptions such as sickness, accident, leave, lay-off, strike, lock-out, or cessation of work not attributable to the employee.

Section 2A(2) provides a deeming fiction of continuous service where an employee who is not otherwise in continuous service has actually worked for at least 240 days in the preceding twelve months, subject to the statutory exceptions.

Section 4 governs entitlement to gratuity, while Section 7(3-A) provides for interest on delayed payment.

Relying on Lalappa Lingappa v. Laxmi Vishnu Textile Mills Ltd., (1981) 2 SCC 238, the Court held that “actually employed” means actually worked and that badli employees are not in uninterrupted service merely because their names remain on the employer’s records; they are entitled to gratuity only for years in which they satisfy the applicable qualifying requirement.

The Court also followed The Ganges Manufacturing Company Limited v. State of West Bengal & Ors., FMA 882 of 2024, holding that a badli or casual workman who did not render 240 days’ service in a year cannot claim gratuity for that year, irrespective of whether the shortfall was attributable to the employer.

The burden initially lies on the employee to establish the qualifying continuous service, as recognised in Sk. Ekbal @ Ekbal Sk. v. State of West Bengal & Ors., WPA 23514 of 2023.

The Court distinguished between uninterrupted service under Section 2A(1) and deemed continuous service under Section 2A(2).

The respondent’s status as a casual helper and his admitted lack of the requisite working days demonstrated that he was not in uninterrupted service during the disputed period.

The absence of a formal break-in-service order was not decisive because the respondent’s engagement was itself intermittent and he was not actually employed throughout the period.

Under Lalappa Lingappa and Ganges Manufacturing, mere empanelment or continuation of the employment relationship does not amount to actual service for gratuity purposes.

Since the respondent admitted that he had not been provided work for the required number of days, his case fell for consideration under Section 2A(2), not Section 2A(1); the assertion that the shortfall was caused by the employer did not cure the failure to satisfy the statutory requirement.

Accordingly, the authorities erred in treating the entire period from 1993 to 2013 as continuous service and in calculating gratuity on that basis.

The absence of a formal break-in-service order did not make his intermittent casual engagement uninterrupted service under Section 2A(1).

The orders dated 5 August 2025 passed by the Controlling Authority and 15 January 2025 passed by the Appellate Authority were set aside.

The writ petition, WPA 16795 of 2026, was allowed; connected applications were disposed of and any interim order was vacated.