LI Network
Published on: January 14, 2024 at 10:43 IST
In a recent judgment, the Bombay High Court clarified that when an employee is transferred among institutes under the same management with continuity in service, gratuity should be calculated based on the last drawn salary at the time of the final cessation of service.
The Court, presided over by Justice Sandeep V Marne, emphasized that there should be no bifurcation of the gratuity amount concerning the last drawn salary in individual spells of service in distinct institutes.
The ruling came in response to four writ petitions challenging the entitlement to gratuity of an employee, Ravi Bhadrappa Randale, who was transferred from Terna Polytechnic, Navi Mumbai, to Terna Engineering College, Navi Mumbai, and subsequently resigned from the latter.
The Court dismissed the petitions filed by the employers, affirming that the two spells of service in Terna Polytechnic and Terna Engineering College were interconnected, and cessation of service occurred when Randale resigned from Terna Engineering College on July 21, 2011.
The Court held that Randale is entitled to gratuity based on the last wages drawn as of July 21, 2011, for his entire service from September 17, 1992, to July 21, 2011.
Randale, a lecturer, served at Terna Polytechnic from September 17, 1992, to June 30, 2004, and then joined Terna Engineering College on July 1, 2004, until his resignation on July 21, 2011.
The Court observed that there was continuity in employment with the same management, and the absence of a fresh recruitment process and a gap between the spells of service established the connectivity.
While acknowledging an error in bifurcating the gratuity amount between the two institutes, the court deemed it inconsequential due to the common management.
The judgment concluded that Terna Engineering College should be directed to pay the entire gratuity amount, and the writ petitions were dismissed. Randale is entitled to withdraw the entire gratuity amount deposited with the Appellate Authority and the court, along with accrued interest.
Case Title: M/s. Terna Polytechnic v. Ravi Bhadrappa Randale and connected cases