If the judgment of the controlling authority (Astt. Central Labour Commissioner) of Kerala under payment of Gratuity Act directing HDFC Bank to pay gratuity on “Personal pay” also apart from basic pay by treating the personal pay amount as part of basic wages to an employee , is not challenged by the employer HDFC Bank and set aside by higher judicial forum, the consequences would be very far reaching in terms of additional financial burden on employers in respect of gratuity payment.
At the centre of the case is a petition filed by a former employee of HDFC Bank before the controlling authority under the Payment of Gratuity Act, 1972
P.V. Unnikrishna Pillai, an employee who worked for close to 16 years before quitting his job in 2022, disputed the amount of gratuity he received from the bank.
He filed the appeal on 8 June 2022, arguing that the bank must also include “personal pay” while calculating his gratuity, and not just his “basic pay”.
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The controlling authority asked HDFC Bank to pay an additional ₹7.22 lakh with a 10% simple interest. This was over and above the gratuity payment of ₹5.95 lakh already paid by the bank. While the order was delivered in July 2022, it was sent to the bank and the petitioner only on 20 January this year.
The Controlling Authority, Aneish Ravindra, who is assistant labour commissioner, Ernakulam, said in his order.“In the instant case, it is pertinent to note that with respect to the components of the salary of the applicant, the term used by the employer is ‘personal pay’ instead of ‘personal allowance’ and all other components of the salary are specifically termed as ‘allowances’,”
“This order would certainly encourage other employees to quote the Kerala Controlling Authority order as a precedent and ask for inclusion of ‘personal pay’, or for that matter, any other head as a component in the term ‘wages’ and accordingly claim a larger gratuity amount.”
According to media reports, The Bank against whom the order has been passed has decide to go in appeal against the order before the Dy. Chief Labour Commissioner ( Central) Kochi.
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