Prior daily wage service must be counted for gratuity once an employee’s services are regularized.

The respondent, Govind Sharma, joined service as a daily wager on October 1, 1979, and was later regularized in the work charge establishment as a Wireman on December 1, 1989

Upon his retirement on June 30, 2014, the State calculated his gratuity starting only from his regularization date (1989), excluding his ten-year tenure as a daily wager

The respondent challenged this exclusion before the Controlling Authority under the Payment of Gratuity Act, 1972, which ruled in his favor, directing the State to pay a further Rs. 1,71,236/- plus interest

This order was upheld by the Appellate Authority on April 23, 2019

The State filed the present writ petition under Article 226 of the Constitution, contending that there was no documentary evidence of continuous service between 1979 and 1989 and that the 1972 Act was inapplicable

Whether the period of service rendered as a daily wager prior to regularization is liable to be counted for the calculation of gratuity under the Payment of Gratuity Act, 1972

Whether the findings of the Controlling and Appellate Authorities were perverse or suffered from jurisdictional error in the absence of formal appointment documents for the daily wager period

The Court primarily applied the Payment of Gratuity Act, 1972, specifically the requirement of proving "continuous service" under Section 2A

It relied heavily on the precedent set by the Supreme Court of India in Netram Sahu v. State of Chhattisgarh (Civil Appeal No. 1254 of 2018), which established that once an employee's services are regularized, they are entitled to count their total period of service (including the daily wager period) for gratuity, provided continuous service is proved

The Court noted that the material on record established the respondent had worked continuously since 1979, a fact even the State’s counsel conceded despite the lack of formal appointment orders

Applying the ratio of Netram Sahu, the Court reasoned that it is a "travesty of justice" to deny an employee the benefit of their long-term service simply because the State took a decade to regularize them

The Bench observed that having regularized the employee, the State has no justifiable reason to deny statutory gratuity benefits for the preceding years

The Court found that the respondent had successfully proved continuous service under Section 2A of the Act, and therefore, the prior daily wager period was legally required to be included in the calculation

It held that the orders of the lower authorities were legally sound and that the respondent was entitled to gratuity for the entire service period from 1979 to 2014

The Petitioners were directed to comply with the order to pay the remaining gratuity amount and interest; no order as to costs was made