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GRATUITY: Forfeiture of Gratuity under Payment of Gratuity Act not automatic on dismissal from service; no forfeiture of gratuity for ‘acts involving moral turpitude’, if not convicted by court of law: SC

GRATUITY: Forfeiture of Gratuity under Payment of Gratuity Act not automatic on dismissal from service; no forfeiture of gratuity for ‘acts involving moral turpitude’, if not convicted by court of law: SC

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GRATUITY: Forfeiture of Gratuity under Payment of Gratuity Act not automatic on dismissal from service; no forfeiture of gratuity for ‘acts involving moral turpitude’, if not convicted by court of law: SC

Aug 21, 2018 : Dtf.in
The Supreme Court has held that dismissal from service does not automatically result in forfeiture of gratuity under the Payment of Gratuity Act, 1972 (Act) and it is subject to Sections 4(5) and 4(6) of the Act. It has been held that the Act must prevail over the Rules on Payment of Gratuity framed by the employer is also a settled position as per Jaswant Singh Gill (supra).  Therefore, the appellant could take recourse to its own Rules, ignoring the Act, for denying gratuity.
It has been further held by the Supreme Court that the  requirement  of  the  statute  is  not  the  proof  of misconduct  of  acts  involving moral  turpitude but  the acts  should constitute  an offence involving moral  turpitude and such offence should be duly established in a court of law.
The relevant extracts from the SC Judgment dated 14.08.2018 are as under:-
20.   In the present case, there is no conviction of the respondent for  the  misconduct  which  according  to  the  Bank  is  an  offence involving moral  turpitude.  Hence, there is no justification for the forfeiture  of  gratuity  on  the  ground  stated  in  the  order  dated 20.04.2004 that  the “misconduct  proved against  you amounts  to acts involving moral turpitude”. At the risk of redundancy, we may state  that  the  requirement  of  the  statute  is  not  the  proof  of misconduct  of  acts  involving moral  turpitude but  the acts  should constitute  an offence involving moral  turpitude and such offence should be duly established in a court of law.
21. That the Act must prevail over the Rules on Payment of Gratuity framed by the employer is also a settled position as per Jaswant Singh Gill (supra). Therefore, the appellant cannot take recourse to its own Rules, ignoring the Act, for denying gratuity.
22. To sum-up,  forfeiture  of  gratuity  is  not  automatic  on dismissal  from service;  it  is subject to sub-Sections (5) and (6) of Section 4 of The Payment of Gratuity Act, 1972.
23. Thus, though for different reasons as well, we find no merit in the appeal and it is accordingly dismissed. …”

See copy of SC Judgment at: Court Judgments on Service Matters

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