Hindustan Latex LifeCare Limited (Unit Chief) v. N. Karunakaran Nair and Regional Labour Commissioner (Central), Thiruvananthapuram, and Deputy Chief Labour Commissioner (Central), Ernakulam (WA Nos. 164 of 2022 & 189 of 2022)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** ## **&** **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM** **TUESDAY, THE 22[ND] DAY OF FEBRUARY 2022 / 3RD PHALGUNA, 1943** **WA NO. 164 OF 2022** **AGAINST THE JUDGMENT DATED 17.05.2021 IN WP(C) NO.39657/2017** **OF HIGH COURT OF KERALA** ## **APPELLANT(PETITIONER):** **THE UNIT CHIEF , HLL LIFECARE LIMITED, PEROORKADA FACTORY, PAROORKADA, THIRUVANANTHAPURAM.** **BY ADV P.RAMAKRISHNAN** ## **RESPONDENTS(RESPONDENTS):** - **1 N.KARUNAKARAN NAIR, HARISHREE, DURBAVILA, THOPPIL, KOTTUKKAL.P.O, BALARAMAPURAM, THIRUVANANTHAPURAM-695 501.** - **2 THE REGIONAL LABOUR COMMISSIONER, (CENTRAL), THIRUVANANTHAPURAM,PIN-685 001.** - **3 THE DEPUTY CHIEF LABOUR COMMISSIONER(CENTRAL), ERNAKULAM, KAKKANAD, KOCHI-682030.** ## **OTHER PRESENT:** **R1 BY ADV.SRI.P.N.MOHANAN, R2 & R3 BY SRI.SUVIN.R.MENON,CGC** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22.02.2022 ALONG WITH WA NO.189/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WA Nos.164 & 189 of 2022 2 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **&** **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM** **TUESDAY, THE 22[ND] DAY OF FEBRUARY 2022 / 3RD PHALGUNA, 1943 WA NO. 189 OF 2022** **AGAINST THE JUDGMENT DATED 17.05.2021 IN WP(C)NO.39650/2017** **OF HIGH COURT OF KERALA** **APPELLANT(PETITIONER):** **THE UNIT CHIEF, HLL LIFE CARE LIMITED, PEROORKADA FACTORY, PEROORKADA, THIRUVANANTHAPURAM.** **BY ADV P.RAMAKRISHNAN** ## **RESPONDENTS(RESPONDENTS):** - **1 K K SREEKANDAN NAIR SREEREMYA, ATTARMOOLA, PAYATTUVILA P.O., BALARAMAPURAM, THIRUVANANTHAPURAM - 695 501.** - **2 THE REGIONAL LABOUR COMMISSIONER (CENTRAL) THIRUVANANTHAPURAM, PIN - 685 001.** - **3 THE DEPUTY CHIEF LABOUR COMMISSIONER(CENTRAL) ERNAKULAM, KAKKANAD, KOCHI - 682 030.** **R1 BY ADV P.N.MOHANAN R2 & R3 BY SRI.SUVIN.R.MENON,CGC** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22.02.2022,ALONG WITH WA NO.164/2022 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WA Nos.164 & 189 of 2022 3 ## **ALEXANDER THOMAS & VIJU ABRAHAM, JJ.** **….................................................................** ## **W.A. No.164 of 2022** _[Arising out of the impugned judgment dated 17.05.2021 in W.P.(C).No.39657 of 2017]_ _&_ ## **W.A. No.189 of 2022** _[Arising out of the impugned judgment dated 17.05.2021 in W.P.(C).No.39650 of 2017]_ **…..................................................................** Dated this the 22[nd] day of February, 2022 ## **JUDGMENT** ## **Alexander Thomas, J.** The appellant, M/s.Hindustan Latex Life Care Limited, is aggrieved by the impugned common judgment dated 17.05.2021 rendered by the learned Single Judge, whereby W.P.(C) Nos.39657 & 39650 of 2017 filed by the appellant herein have been dismissed on the ground that directions rendered by the Gratuity Controlling Authority and the Appellate Authority for reckoning gratuity for the service of the contesting respondents, prior to the regular commencement of their service, etc., do not warrant any interference. 2. Heard Sri.P.Ramakrishnan, learned counsel appearing for the appellant in the W.As/petitioner in the W.P.(C)s, Sri.P.N.Mohanan, learned counsel appearing for R1 in the W.As/R1 WA Nos.164 & 189 of 2022 4 in the W.P.(C)s and Sri.Suvin R.Menon, learned Central Government Counsel appearing for R2 & R3 in the W.As/R2 & R3 in the W.P. (C)s. 3. R1 in W.P.(C) No.39657 of 2017/R1 in W.A.No.164 of 2022 had joined the regular service of the appellant company on 16.02.1987 and he had retired from service on 31.10.2013, on attaining the superannuation age and after rendering 26 years 8 months & 13 days of service. On retirement, he has been duly paid gratuity amount of Rs.5,51,898/- for the abovesaid period of service. Thereafter, R1 has filed Ext.P1 application dated 02.04.2014 before the Controlling Authority, constituted as per the Payment of Gratuity Act, contending that he had initially joined the service of the appellant company on 15.11.1981 as a casual employee and that he continued in that capacity till his regular commencement of service on 16.02.1987 and that since the said casual service period from 15.11.1981 to 15.02.1987 (5 years & 3 months) is continuous service within the meaning of Section 2A of the Payment of Gratuity Act, the said period should also be reckoned for payment of gratuity, etc. The said claim has been allowed by the Gratuity Controlling Authority, which has been affirmed by the Appellate Authority by dismissing the appeal preferred by the appellant company. WA Nos.164 & 189 of 2022 5 4. So also, R1 in W.P.(C) No.39650 of 2017/R1 in W.A.No.189 of 2022 had joined the regular service of the appellant company on 16.02.1987 and he had retired from service on 31.11.2014 on attaining the superannuation age and after rendering 27 years 9 months & 13 days of service. On retirement, he has been paid gratuity amount of Rs.6,29,551/- for the abovesaid period of service. It is thereafter that R1 herein has also filed Ext.P1 application dated 03.02.2015 before the Controlling Authority contending that he had initially joined the service of the appellant company on 24.05.1984 as a casual employee and he had continuous casual service for the period from 24.05.1984 to 15.02.1987 (period of 2 years & 9 months), before his regularization in the company with effect from 16.02.1987. He has also contended that since the abovesaid casual service period is continuous service within the meaning of Section 2A of the Payment of Gratuity Act, the employer is liable to pay additional gratuity amount for the said casual service period as well. The said plea of the 1[st] respondent was allowed by the Gratuity Controlling Authority, which has been confirmed in the statutory appellate order, by the dismissal of the appeal filed by the employer against the same. It is the abovesaid proceedings of the Gratuity Controlling Authority and the Appellate Authority that are WA Nos.164 & 189 of 2022 6 essentially under challenge in the above writ proceedings. 5. The learned Single Judge has noted that the Gratuity Controlling Authority and the Appellate Authority had mainly relied on the Pension Payment Orders issued by the statutory authority under the Employees' Pension Scheme covered by the Employees' Provident Funds & Miscellaneous Provisions Act, 1952. Copies of the said Pension Payment Order, in respect of these employees, have been produced as Ext.R1(b) in the counter affidavits filed by them in the respective W.P.(C)s. The learned Single Judge has also found that, going by the Employees' Pension Scheme, regular service for pension would be counted only from the date of introduction of the Pension Scheme on 16.11.1995 and that Ext.R1(b) in both the cases would reveal that the abovesaid employees have past service prior to 15.11.1995 and it was found that the non-contributory pension days in both the cases is “0” days which implies that there is no break in service and hence, it was inferred by the Gratuity Controlling Authority and the Appellate Authority that the employees could establish a case of continuous casual service within the meaning of Section 2A of the Payment of Gratuity Act. In view of the above aspects, the learned Single Judge has dismissed both the W.P.(C)s filed by the employer thus confirming the orders passed by the WA Nos.164 & 189 of 2022 7 ## Gratuity Controlling Authority and the Appellate Authority. ## 6. Section 2A of the Payment of Gratuity Act reads as ## follows: ## _“_ _**Sec.2A. Continuous service**_ _For the purpose of this Act,-_ _(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;_ - _(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-_ - _(a) for the said period of one year, if the employee during the period of twelve calender months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-_ - _(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week, and_ _(ii) two hundred and forty days, in any other case;_ - _(b) for the said period of six months, if the employee during the period of six calender months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-_ - _(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week, and_ _(ii) one hundred and twenty days, in any other case._ _Explanation:For the purposes of clause (2), the number of days on which_ _an employee has actually worked under an employer shall include the days on which-_ - _(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;_ - _(ii) he has been on leave with full wages, earned in the previous year;_ - _(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and_ - _(iv)in the case of a female, she has been on maternity leave; so,_ WA Nos.164 & 189 of 2022 8 _however, that the total period of such maternity leave does not exceed such period as may be notified by the Central Government from time to time._ - _(3) Where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.”_ 7. Sri.P.Ramakrishnan, learned counsel appearing for the appellants would contend that the burden of proof to establish that the above employees have not only casual service for the period in question but also that the said casual service is continuous service within the meaning of Section 2A of the Payment of Gratuity Act, is on the claimant employees and not on the employer and that mere reliance on Ext.R1(b), which is the Pension Payment Order, will not amount to proving that the abovesaid prior service is continuous within the meaning of Section 2A of the Payment of Gratuity Act. Hence, it is urged that the reliance made by the learned Single Judge as well as by the Gratuity Controlling Authority and the Appellate Authority on Ext.R1(b) Pension Payment Order is misplaced and that the employees cannot be said to have established that they have not only the abovesaid prior casual service but also that the said prior service is continuous, even going by the lower standard of proof based on preponderance of probabilities. 8. Per contra, Sri.P.N.Mohanan, learned counsel appearing WA Nos.164 & 189 of 2022 9 for the 1[st] respondent employees would contend that it has been admitted by the employer in the abovesaid proceedings that the documents of the employees, maintained by the management for the abovesaid prior period in question, are no longer available with them. It is pointed out that the respondent employee in W.P.(C) No.39657 of 2017 had retired from service on 31.10.2013 and he had made Ext.P1 application before the Gratuity Controlling Authority as early as on 02.04.2014. Further that, the respondent employee in W.P.(C) No.39650 of 2017 had retired from service on 30.11.2014 and he had also submitted the requisite Ext.P1 application before the Controlling Authority on 03.02.2015. That both these employees have filed the abovesaid applications for payment of the additional gratuity amount, based on their casual service, without much delay after their retirement and that the version of the management, that they have destroyed the documents, cannot be accepted since the same cannot be said to be a bonafide move, in as much as the management should not have destroyed such documents immediately after the retirement of the employees and that if such materials regarding the prior service of the employees were not destroyed or disposed of by the appellant company, then they would have been the best proof to decide on the issue as to whether the WA Nos.164 & 189 of 2022 10 employees had prior casual continuous service or not. That the management was having possession of the best evidence and since they claim that they are not in possession of the abovesaid documents and materials, even though the applications have been filed before the Gratuity Controlling Authority, without much delay after the retirement of the employees, would lead to the supposition that the authorities can make an adverse inference regarding the abovesaid conduct of the management. Further, it is pointed out that the only evidence that the employees had was the Pension Payment Order at Ext.R1(b), which would clearly show the abovesaid prior period and that since the best evidence, which has been possessed by the management, is not forthcoming from them for no justifiable reasons, then it may not be wrong on the part of the Gratuity Controlling Authority to infer that the abovesaid prior service is continuous within the meaning of Section 2A of the Payment of Gratuity Act. It is further reinforced that Ext.R1(b) would clearly show that the non-contributory pension days is “0” in both the cases, which means that there is no break in service and hence, this is one more added ground to justify the contention of the Gratuity Controlling Authority as well as the Appellate Authority to reach the conclusion that the abovesaid prior period is continuous within the WA Nos.164 & 189 of 2022 11 meaning of Section 2A of the Payment of Gratuity Act. 9. Sri.P.Ramakrishnan, the learned counsel appearing for the appellants, would place reliance on the judgment of a learned Single Judge of this Court in the case in _**Ramakrishnan T.N. & Ors. v. National Textiles Corp. Ltd. & Ors. [MANU/KE/2666/2015: (2016) 1 LLJ 394 (Ker.)]**_ . Therein the workers had joined service prior to 01.04.1974. The employees concerned had placed reliance on the ESI cards to evidence their continuous service. The learned Single Judge of this Court held in para No.5 of the abovesaid decision that even contract engagement for a single day would be eligible for coverage under the EPF Act as well as the ESI Act and hence, reliance on ESI cards may not be of any avail. Further the employees had also placed reliance on the certificates issued under the Payment of Gratuity Act and the learned Single Judge has observed that the said documents cannot be relied on as there is no authenticity that the same was issued by the company, etc. This Court held in para No.6 of the abovesaid decision, in _**NTC**_ 's case supra, that the employee has to prove that he/she had continuous service for the relevant period in question, which alone would make him/her entitled for the benefit of the standing orders and that any contract employment prior to that date WA Nos.164 & 189 of 2022 12 would not entitle such benefits to the petitioners therein, etc. On the basis of this decision, the learned counsel appearing for the appellants would urge that the burden of proof is on the employees concerned and that therefore, the view taken by the learned Single Judge is not correct, etc. 10. To the above, Sri.P.N.Mohanan, learned counsel appearing for the respondent employees would contend that the dictum laid down by this Court in _**NTC**_ ’s case supra may not apply to the facts of the instant case in as much as what was required therein was regular continuous service and what is required in the instant case is casual continuous service, etc. 11. Further, Sri.P.Ramakrishnan, learned counsel appearing for the appellants, would also point out that, following the aforesaid proceedings of the Gratuity Controlling Authority and the Appellate Authority as well as the abovesaid judgment of the learned Single Judge in this case, lots of other retired employees of the appellant company have now approached the Gratuity Controlling Authority with similar pleas without any material except the Pension Payment Order and that the company would be put into very difficulties if the dictum laid down by the learned Single Judge is followed in this case. WA Nos.164 & 189 of 2022 13 12. Learned counsel for the respondent employees would also point out that the entries in the Pension Payment Orders, like Ext.R1(b), are made by the Statutory Pension Authorities in terms of the EPF Act, strictly on the basis of the information given by the employer concerned and therefore it cannot be said that Ext.R1(b) cannot be relied upon in the instant case, etc. 13. After hearing both sides, earlier we had queried as to whether the additional gratuity amounts which were deposited before the Controlling Authority have been released to the respondent employees herein. We are now apprised by both sides that the additional gratuity amounts have already been released to both the respondent employees by the Gratuity Controlling Authority after the dismissal of the above Writ Petitions. Since the amounts in question have already been disbursed to the retired employees, it will be very difficult to recover it back. _Prima facie_ , we are of the opinion that the view taken by the learned Single Judge cannot be said to be unreasonable. However, the question of law decided by the learned Single Judge in the above W.P.(C) is left open to be decided afresh in appropriate proceedings in the manner known to law. 14. We are not in any manner interfering with the directions WA Nos.164 & 189 of 2022 14 given by the Gratuity Controlling Authority and the Appellate Authority in the matter of disbursal of the abovesaid additional gratuity amounts to the workers in these cases, taking into account the subsequent developments in the case. 15. Hence, it is made clear that the abovesaid judgment of the learned Single Judge need not be treated as a precedent in other cases and the question should be decided afresh in appropriate proceedings in the manner known to law. The impugned findings and directions of the learned Single Judge in the above W.P.(C)s will stand modified to the limited extent as above. With these observations and directions, the above Writ Appeals will stand disposed of. Sd/- ## **ALEXANDER THOMAS** **JUDGE** Sd/- **VIJU ABRAHAM JUDGE** cks