Summary
The Supreme Court upheld municipal employees’ gratuity awards under the Payment of Gratuity Act rather than the more restrictive municipal regulations. A Central Government notification extended the Act to qualifying local bodies independently of State shops-and-establishments coverage. Section 14 gave the central gratuity provisions overriding effect against inconsistent State-law restrictions.
Issues
- Whether the gratuity statute applied despite exclusion from the State shops-and-establishments law.
- Whether restrictive municipal gratuity regulations prevailed.
Provisions considered
- Section 1(3)(c) and notification of 8 January 1982, Payment of Gratuity Act, 1972The notification brought local bodies meeting the ten-person employment threshold within the Act, independently of Section 1(3)(b). (¶ 7–11)
- Section 14, Payment of Gratuity Act, 1972Overrode inconsistent State-law restrictions on gratuity payable to the municipal employees. (¶ 11–14)
Held
- Although the municipality did not fall under Section 1(3)(a) or the State-law-linked category in Section 1(3)(b), the 1982 notification expressly covered local bodies employing ten or more persons during the relevant period. The absence of reference to that notification below did not negate its effect. (¶¶ 8–11, 13)
- Municipal regulations could not restrict the gratuity entitlement conferred by the applicable central Act. Section 14 displaced inconsistent provisions and supported the controlling authorities’ awards. (¶ 11–15)
Result
Appeals dismissed. Controlling authorities’ gratuity awards, as upheld by the High Court, affirmed.