Home » News » “Financial Crisis Cannot be Grounds for Non-Payment of Gratuity”: Mumbai Labour Court

A labour court in Mumbai came to the rescue of over a dozen employees who are not receiving their gratuity even after decades of service with BEST Undertaking. The court observed that financial crisis cannot be the grounds for non-payment of gratuity.

The court has directed the BEST Undertaking to hand over the amounts ranging from Rs 30 lakh to Rs 10 lakh.

In separate orders, the court noted that as a matter of right, an employee expected and deserved some reward after a long meritorious service. “The gratuity will have to be paid with 10 per cent interest,” the court said.

Mohammad Ansari, one of the applicants, has worked with the BEST Undertaking from 1984 to 2019. He told the court that he submitted an application under the Payment of Gratuity Act for around Rs 30 lakh but got no response.

In the petition, Ansari has mentioned that BEST Undertaking used to pay the gratuity amount to the retiring employees within one month from the date of the superannuation of service till October 2016 as per the provisions of Payment of Gratuity Act.

Another employee, Tushar Bapat worked as an Assistant Administrative Officer and retired after serving for 34 years. He has sought gratuity of over Rs 20n lakh.

However, the undertaking submitted that it has been facing a financial crisis due to losses in the earnings which resulted in the increase in the deficit. BEST Undertaking also submitted that there was a mismatch in its income and expenditure. The undertaking also mentioned that it has been suffering huge losses in the traffic division from the past few years.

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