Kerala HC rules ‘Employees’ cannot Claim better terms of Gratuity as a right

 The Kerala High Court has dismissed a petition from retired employees which sought better terms of gratuity.

It said extending benefits of better terms of gratuity has to be decided by the employer based on various factors and the employees cannot claim it as a matter of right.

The Court said this after looking into whether retired employees of state-owned Kerala Minerals and Metals Ltd ( KMML) were entitled to get the benefit of the amendment which increased the ceiling limit from Rs 3.5 lakh to Rs10 lakh.

The Court pointed out that, “Section 4(5) of the Payment of Gratuity Act provides that ‘nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer’. I am of the view that extending better terms of gratuity is matter to be decided by the employer taking into account several relevant factors. The employees cannot claim better benefits as of right. Of course, the employees can negotiate with the employer to persuade him/her to extend better benefits of gratuity to them,” read the Court’s order.

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The petition pointed out that the amendment dated 24.5.2010 was not extended to them whereas several state-owned companies, PSUs and Central Government employees were given the benefit of amended provision retrospectively.

The Court stated, “the petitioner’s demand for retrospective implementation of the Amendment Act is not supported by any legal ground,” and dismissed the writ petition.

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