LexLALAPPA LINGAPPA & ORS. versus LAXMI VISHNU TEXTILE MILLS LTD., SHOLAPUR
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A B 796 LALAPPA LINGAPPA & ORS. v. LAXMI VISHNU TEXTILE MILLS LTD., SHOLAPUR February 11, 1981 (A. P. SEN AND E. S. VENKATARAMIAH, JJ,] Payment of Gratuity Act 1972-Section 4(1)--Scope of-Permanent worker1 on unauthorised leave-On termination of services whether entitled to gratuity under section 4(1)-Badli workers-If entitled to gratuity for badli period on being made permanent. C fVords ond phrases-"Continuous service"-"Actually e111ployed" and "actua~ D E (1 G ally worked" meaning of. Interpretation of statutes-Sc 1cial welfare legislation-Principles of interpreta~ tion. Gratuity is payable to an employee on the termination of his employment a·[ter he has rendered continuous service under the conditions mentioned in sec- tion 4(1) of the Payment of Gratuity Act 1972. The term "continuous service" has been defined in section 2(c) to mean uninterrupted service and includes service which is intenupted, ar11ong others, by leave or cessation of work not due to any fault of the employ,,e concerned. Explanation I to this section pro- vides that an en1ployee, who is not in uninterrupted service for one year, shall be deemed to be in continuous service, if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than 240 days except when he is employed in a seasonal establishment. Explana- tion II provides that an employee of a seasonal establishment shall be deemed to be in continuous service, if he has actually worked for not less than 15% of the number of days on which the establishment was in operation during that year. Certain perm.anent employees of the respondent, on termination of their em- ployment, made a claim for P'<Yment of gratuity in respect of every year during which they were in permanent employment irrespective of whether they had actually worked for 240 days or not. On being made permanent the badli workers claimed gratuity in respect of the period prior to their being made permanent irrespective of whether in those years they had been actually employed for 240 ·days or not The respondent, however, paid gratuity calculating the number of years in which they were actually employed for 240 days. As regards the permanent employees, the Labour Coort held that they were governed by the substantive part of the definition of continuous service in section 2(c) npon the basis that there was no break in service; and as regards R the badli employees, it held that they were not entitled to gratuity in respect of the years in which they W<"e not actually employed for 240 days since they fell within Explanation I of section 2 ( c) of the Act. • L. LINGAPPA V. LAXMI VISHNU TEXTILE MILLS 797 The Appellate Authority upheld the view of the Labour Court. On appeal, as regards the permanent employees the High Court held that unauthorised absence from work resulted in a break of service and, therefore, the employees were not in uninterrupted service and fell outside the substantive part of section 2(c) but came within Explanation I. As regards badli workers it up- held the view of the authorities. In appeal it was contended that the permanent employees, even if they were absent without leave for a number of days in a year and had actually worked for less than 240 days due to absence without leave, were entitled to gratuity under section 4 (I) since the jural relationship of employer and employee continued during that period. The badli employees on being made permanent became entitled to gratuity for the badli period because of the fact that they were re~ quired to report for work at the factory irrespective of whether they were provided with employment or not on any day. Dismissing the appeal. HELD : I. The High Court was right in holding that the permanent employees Were not entitled to payment of gratuity under section 4(1) for the years in which they remained absent without leave and had actually worked for less than 240 days in a year. [806 A] The expression "actually employeed" used in Explanation I and "actually worked" used in Explanation II, having regard to the context and plll'p06e with which they were enacted, are synonymous. An employee, who is not in uninter- rupted service for one year is deemed to be in continuous service, even though he falls outside the substantive part of the definition in section 2 ( c) provided he has been actually employed for 240 days in a year. In the case of
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