Employment regularization not necessary to claim Gratuity - Supreme Court

In Netram Sahu vs State of Chattisgarh and another case, the employee was appointed as daily wager on 01.04.1986 by the Water Resources Department of the State of Chhattisgarh. Subsequently, the services of the employee were regularized in 2008 and the employee retired on 30.07.2011 but not paid the gratuity amount by the State.
The employee filed an application before the Controlling Authority under the Payment of Gratuity Act, 1972 and prayed for payment of gratuity amount to him in accordance with the provisions of the Act. The Controlling Authority allowed the application and held that the appellant is entitled to claim gratuity amount because he served for more than 25 years of service.
The State felt aggrieved and filed appeal before the specified Appellate Authority under the Act. But Appellate Court dismissed the appeal filed by the State and affirmed the order of the Controlling Authority. Then the state filed a writ petition against order of appellate Authority to the High Court of Chhattisgarh at Bilaspur which in 2013 set aside the orders of the Controlling Authority and the Appellate Authority and held that the employee worked as a regular employee only for 3 years. So, he does not qualify to get gratuity benefit under the Act.
The employee then filed writ appeal before the Division Bench of the High Court which dismissed the appeal. Then the employee filed a special leave appeal to Supreme Court of India which gave the decision against Bilaspur High Court and held that the appellant employee has actually rendered the service for a period of 25 years, and State regularized his services by passing the order dated 06.05.2008. So, the employee became entitled to claim its benefit for counting the period of 22 years regardless of the post and the capacity on which he worked for 22 years. that means the period for which an employee has worked on daily wages, will be counted for calculation of gratuity. And the Respondent-State is directed to pay the gratuity amount as determined by the Controlling Authority within three months to the appellant employee.


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