Gujarat HC Remands Daily-Wager Driver’s Gratuity Claim For Recalculation Excluding Periods He Did Not Work

Respondent No. 1 worked for the petitioner as a daily-wager/driver and was treated as a permanent employee with effect from 1 July 2014 under a settlement.

He retired on superannuation on 31 March 2019.

The Controlling Authority directed the petitioner to pay an additional ₹67,413 in gratuity, with 10% annual interest from 6 May 2019; the Appellate Authority upheld that order.

The petitioner challenged both orders, arguing, among other things, that periods when no work was allotted should not count towards gratuity.

The Court relied on the Payment of Gratuity Act, 1972, including the provisions concerning continuous service and gratuity, and on Lalappa Lingappa & Ors. v. Laxmi Vishnu Textile Mills Ltd., (1981) 2 SCC 238.

As the Court quoted that decision, “actually employed” means “actually worked”; badli employees are not covered by the substantive part of the definition of continuous service for periods in which no work was allotted to them.

Applying Lalappa Lingappa, the Court held that the period for which no work was allotted could not be counted in calculating gratuity.

It concluded that the authorities’ orders required reconsideration under that principle, while leaving the Controlling Authority to determine the relevant periods and recalculate the entitlement in accordance with law.

The Court quashed the orders of the Appellate Authority dated 27 August 2021 and the Controlling Authority dated 13 August 2020, and remanded the matter to the Controlling Authority to reconsider the gratuity claim in light of Lalappa Lingappa, excluding periods during which the employee had not worked.