Nothing Illegal In Insisting Employee To Withdraw Litigation Against Employer To Avail Of Ex Gratia Scheme: Kerala HC [Read Judgment]

‘If you want this benefit, spare us from litigation. You extend an olive branch; we extend a benefit’

The Kerala High court has held that when an employer introduces a beneficial scheme, not because of any right or entitlement of the employer, but entirely as an ex gratia, there is no illegality in insisting the employee to withdraw from any litigation pending against it, as an eligibility criterion.

Justice Dama Seshadri Naidu, speaking for the division bench of the high court while upholding such precondition in a beneficial scheme introduced by Bharat Petroleum Corporation, said: “We may bear in mind that the Corporation has compelled no employee to desist from litigating against it; it only says this: If you want this benefit, spare us from litigation. You extend an olive branch; we extend a benefit — so to say.”s

An employer of the corporation had a dispute was pending before an industrial tribunal. While it was pending, the employer introduced a beneficial scheme, but with a condition that the employee should have no litigation pending against his employer.

The court observed: “The Corporation has no statutory — not even contractual — obligation, much less compulsion, to provide a benefit as it has provided under the Scheme. It is, therefore, a benefit it extended to its employs, gratis. It lacks enforceability. Once it lacks enforceability, it can also be couched in conditions. The beneficiary may take it with the conditions, or leave it.”

The bench further said: “Once the benefit is gratis — free — we reckon that the Corporation is well within its rights to insist on a precondition as an eligibility criterion.”

Read the Judgment here.