Benefit Of Gratuity Act Cannot Be Denied To An Employee By Designating Him As A Trainee : Kerala HC [Read Judgment]

An employee cannot deny the benefit of Gratuity Act to an employee by designating him/her as trainee while extracting regular work from him, the Kerala High Court has observed.

Justice AM Badar observed that a trainee is not excluded from the definition of the term 'employee' under the Gratuity Act, but only an 'apprentice' is excluded.

The court observed thus while dismissing a writ petition filed by IREL (India) Limited/employer which had challenged an order passed by Controlling Authority under the Payment of Gratuity Act, 1972 by contending that trainee or learner is in fact an apprentice and therefore, not an employee as defined by Section 2(e) of the Gratuity Act. Their case was that the employee was not entitled for payment of gratuity for the initial period of two years when he was appointed as a trainee which is equivalent to his appointment as apprentice. A Karnataka High Court judgment was relied upon by the employer to contend that in the absence of any statutory provision under the Gratuity Act which could be pressed into service, a trainee cannot be entitled to gratuity.

Justice Badar, disagreed with this view and observed that a trainee is not excluded from the definition of the term 'employee' under the Gratuity Act, but only an 'apprentice' is excluded. The court said:

"Trainees give various duties during the course of the so called training and who is not deputed in a particular designated trade cannot be called as an apprentice or learner. The nomenclature of the post is not of much consequence while interpreting the beneficial provisions of the welfare statute. The Gratuity Act is undoubtedly a welfare statute which only bars an apprentice from the benefit of payment of gratuity during such training period. However, designating an employee as trainee, extracting regular work from him and then denying him the benefit of Gratuity Act under the pretext of such employee being a trainee would certainly defeat the object of the welfare statute."

The court also agreed with a view expressed by Orissa High Court in Chairman-Cum-Managing Director, Orissa Mining Corporation Ltd vs. Controlling Authority, Payment of Gratuity Act that a trainee employed under a contract of employment is not an apprentice, under the Apprentices Act, unless he is undergoing apprenticeship training in a designated trade in pursuance of a contract of apprenticeship.

The court said that the employee was thus entitled for gratuity for the period from 16.07.1991 to 15.07.1993 as he has proved that, during the said period, he was not undergoing any training and as such was not an apprentice so as to exclude his case from the beneficial legislation i.e. Payment of Gratuity Act, 1972.

CASE: IREL (INDIA) LIMITED vs. P. N. RAGHAVA PANICKER [WP(C).No.2254 OF 2020]

CORAM: Justice AM Badar

COUNSEL: Adv M.GOPIKRISHNAN NAMBIAR, Adv C.S.AJITH PRAKASH

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