Kerala High Court Upholds Gratuity Entitlement for Abkari Workers

Abkari workers of Kerala State Beverages Corporation are entitled to gratuity under the Payment of Gratuity Act, 1972, despite receiving benefits under the Kerala Abkari Workers Welfare Fund Scheme.

In a significant judgment, the Kerala High Court has ruled in favor of retired abkari workers from the Kerala State Beverages Corporation, affirming their entitlement to gratuity under the Payment of Gratuity Act, 1972. This decision comes despite the workers already receiving terminal benefits under the Kerala Abkari Workers Welfare Fund Scheme. The Division Bench comprising Mr. Justice Sushrut Arvind Dharmadhikari and Mr. Justice Syam Kumar V.M. overturned the judgment of a Single Judge who had dismissed the workers' claims, citing potential double payment and unlawful enrichment.

The appeals, arising from a common judgment dated March 13, 2024, were filed by Manoharan D. and others. The appellants contended that their entitlement to gratuity under the Gratuity Act was a statutory right that could not be unilaterally denied by the employer. The Single Judge had previously dismissed the petitions on the grounds that accepting the appellants' claims would result in double payment of gratuity, thus leading to unjust enrichment.

The High Court, however, found that the learned Single Judge erred in interpreting the definition of "employee" under the Gratuity Act. It clarified that exclusion from the definition requires both conditions to co-exist: holding a post under the Central or State Government and being governed by another Act or Rules providing for gratuity payment. The court emphasized that the Gratuity Act, being a central statute, has an overriding effect over other laws unless a specific exemption is granted by the appropriate Government.

Further, the court noted that the appellants were not employees of the Central or State Government and were thus entitled to gratuity under the Gratuity Act. The judgment also highlighted that the benefits received under the Welfare Fund Scheme do not negate the statutory right to gratuity under the Gratuity Act. The court stated that receiving benefits under both schemes does not constitute unjust enrichment, as the Gratuity Act is a social welfare legislation that should be interpreted liberally.

The judgment has directed the Kerala State Beverages Corporation to pay the gratuity to the appellants based on their eligibility under the relevant Service Rules and the Gratuity Act within three months.

Bottom Line:

Payment of Gratuity - Abkari workers of Kerala State Beverages Corporation are entitled to gratuity benefits under the Payment of Gratuity Act, 1972, despite receiving benefits under the Kerala Abkari Workers Welfare Fund Scheme, as no specific exemption from the Gratuity Act was obtained from the appropriate Government.

Statutory provision(s): Payment of Gratuity Act, 1972 Sections 2(e), 4(5), 5, 14

Manoharan D. v. Kerala State Beverages (Manufacturing And Marketing) Corporation, (Kerala)(DB) : Law Finder Doc Id # 2819311