Decided on December 12,1974

IN RE: V N SUNDAR Appellant


- (1.) ALL these petitions challenge the validity of the Kerala Industrial Employees' Payment of Gratuity Act, 1970, for short the Act which came into force on February 18, 1970, This Act replaced Ordinance 7 of 1969 which had had come into operation on December 10, 1969. The Act was superseded by the coming into force of the Payment of Gratuity Act, 1972 (hereinafter referred to as the Central Act) passed by Parliament and which came into force on Remington Rand off India Ltd. v. Their Workmen (1971) 39 F. J. R. 437vides that the Central Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than the Central Act or in any instrument or contract having effect by virtue of any enactment other than that Act.
(2.) BEFORE we proceed to deal with the contentions raised by counsel it is necessary to state the scheme provided by the Act. Section 4 enjoins that "gratuity shall be payable to an employee-- (a) on his superannuation; (b) on his retirement, resignation, retrenchment, discharge or dismissal from service after completion of a minimum period of five years of continuous service. (c) on his death or total disablement due to accident or disease. The gratuity payable is at the rate of 15 days' wages on the last drawn wages for every completed year of service or part thereof in excess of six months subject to a maximum amount of 15 months' wages. The Act saves the right of any better terms of gratuity or retirement benefits under any award or agreement or contract with the employer. The last two provisos to Section 4 of the Act are in these terms: Provided also that in the case of voluntary retirement or resignation from service in any particular year, not more than five per cent of the total number of employees in the factory, plantation, establishment or undertaking shall be entitled to payment of gratuity and if the number of employees who voluntarily retire or resign from service exceeds five per cent of the total number of employees, the eligibility of an employee for payment of gratuity shall be determined on the basis of the length of the service of the employee in the factory, plantation, establishment or undertaking: Provided further that an employee who voluntarily retires or resigns from service shall be eligible to claim gratuity only if one month's notice in writing of his intention so to retire or resign had been given to the employer.
(3.) THE gratuity is payable after completion of a minimum period of five-years of continuous service. " Continuous service " is defined in Section 2 (b) thus: 2. In this Act, unless the context otherwise requires-- (a ). . . (b) 'continuous service' means uninterrupted service and includes service which may be interrupted by sickness, accident, leave, strike, lock-out or cessation of work not due to employee's fault;;

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