KATHAYEE COTTON MILLS Vs. GOPALA PILLAI

JUDGEMENT

(1.) This writ petition raises a question of interpretation with regard to sub-s.(2) of S.4 of the Payment of Gratuity Act, 1972, (Act 39 of 1972), hereinafter referred to as the Act. That sub-section lays down as follows:

(2.) The bone of contention is whether in the case of monthly rated employees, like the 1st respondent in the writ petition, 15 days' wages has to be reckoned on the basis of a month having 30 days as contended for by the writ petitioner (Management) or on the basis of it having only 26 working days as contended for by the 1st respondent.

(3.) On the retirement on 17-10-1974 of the 1st respondent who was employed as a piecer in the Spinning Department of the petitioner's factory at Alwaye, he was paid gratuity in the sum of Rs. 4485.60 calculated at the rate of half a month's salary for every year of his completed service, he having had 21 years of service and his aggregate monthly wage reckonable for the purpose having been Rs. 427.24. The 1st respondent not having been satisfied with the amount received filed an application before the Controlling Authority under the Act, the 3rd respondent in the writ petition, alleging that gratuity was calculated by the petitioner on the basis, of the daily wages arrived at by dividing the monthly salary by 30 and multiplying into 15 for determining the gratuity payable for every year of service. According to him, the monthly wages should have been divided by 26 for finding out the daily wages and 15 days' wages should be calculated by multiplying the daily wages thus arrived at into 15. The contention of the petitioner before the Authority, consistent with its stand, was that the daily wages should be calculated by dividing the monthly wages by 30, inasmuch as the 1st respondent was a monthly rated employee and his salary was given for the whole month; as monthly wages were given for the whole month, 15 days' wages meant half a month's wages, and what was paid by the petitioner to the 1st respondent under S.4(2) of the Act was at that rate. After the enquiry and after hearing the parties the 3rd respondent passed an order dismissing the application, accepting the contention of the petitioner. Ext. P1 is the copy of the order dated 14-7-1975. Aggrieved by Ext. P1 order the 1st respondent filed an appeal before the Deputy Labour Commissioner and the Appellate Authority, the 2nd respondent in the writ petition. A copy of the appeal filed under S.7 (7) and 13 of the Act dated 25-8-1975 is Ext. P2. After hearing the parties the 2nd respondent passed orders dated 19-2-1976, a copy of which is Ext. P3, allowing the appeal, and directing the petitioner to pay to the 1st respondent an amount of Rs. 689.75 being the difference in the amount of gratuity payable to him over what was already paid, having held that the daily wages had to be calculated by dividing the monthly wages by 26, not by 30. In this writ petition the petitioner challenges the correctness of Ext. P3 order passed by the second respondent.