Gratuity cannot be forfeited without providing an opportunity of hearing to the employee: Bombay High Court

Gratuity cannot be forfeited without providing an opportunity of hearing to the employee: Bombay High Court

Bombay High Court in Chairman and Managing Director, Bank of Maharashtra and Ors. vs. Kishore and Ors. W.P. No. 1572/2022, on August 19, 2022 observed that when gratuity payable to an employee is sought to be forfeited to the extent of loss caused due to wilful omission or negligence of the employee under section 4(6)(a) of the Payment of Gratuity Act, 1972, an employer cannot simply issue notice (Form-M in the instant case) to the employee rejecting claim for payment of gratuity; this has to be preceded by a show cause notice, enumerating the basis and extent of financial loss as claimed by the employer, due to the alleged wilful omission or negligence of the employee and thereby providing an opportunity to the employee to contest the same, ensuring fairness of procedure.

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November 2024

Tech & Human Equation

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