Bombay HC: Aplab Ltd's Gratuity Payment Missteps Under Scrutiny

Here's a straightforward breakdown of a legal battle between Aplab Ltd and several employees over gratuity payments. The case was heard in the Bombay High Court, with Judge Amit Borkar in charge.

The Gratuity Tussle

The case is about a disagreement over gratuity payments under the Payment of Gratuity Act, 1972. The main issue was whether Aplab Ltd had correctly calculated and paid the gratuity owed to its former employees, including Jayaprakash Jagannath Raut.

Background of the Case

• Date of Judgment: The original judgment was given on November 9, 2023, by the authority at the Fourth Labour Court in Thane.
• Appeal Judgment: An appeal was judged on October 19, 2024, by the Industrial Court in Mumbai.

Aplab Ltd, a company based in Navi Mumbai, makes UPS systems and power units. The disagreement started when Jayaprakash and others claimed they were owed gratuity payments that the company had not paid after they quit.

The Employee's Claim

Jayaprakash and other employees argued that they should receive gratuity based on 26 days’ pay per year of service, instead of the 15 days’ pay Aplab Ltd had used. They also claimed that a "special allowance" should be considered part of their pay for calculating gratuity.

Aplab Ltd's Defense

Aplab Ltd argued that:

• The employees had not submitted the necessary Form “I” to claim gratuity on time.
• The special allowance was not part of the pay according to the law.
• They had money problems which delayed payment.

Court's Findings

• Notice and Delay: The court found that Aplab Ltd failed to give the required notice about gratuity payments. This meant the employees’ delay in filing claims was excused.
• Interest on Delayed Payment: The court decided that Aplab Ltd must pay interest on delayed gratuity payments since they hadn’t gotten permission for the delay.
• Special Allowance: The case was sent back to the Appellate Authority to decide if the special allowance should be included as pay.

Summary of the Verdict

The court directed the Appellate Authority to take another look at whether the special allowance should be included and to calculate the correct gratuity based on 26 days’ pay. The parties are scheduled to appear before the Appellate Authority on March 23, 2026.