Karnataka High Court in the case of Central Warehousing Corporation vs. G C Bhat &Anr. WP No. 102365/2024, set aside the employer’s contention that it was entitled to withhold the gratuity amount and adjust it towards the losses caused to the employer corporation. The Court upheld the order to pay gratuity passed by the controlling authority designated under the Payment of Gratuity Act, 1972. It further observed that when an employee is dismissed for misappropriation or causing losses to the employer, the employer can initiate proceedings to recover those losses or the amount misappropriated. However, no such proceedings had been initiated against the employee to recover the alleged losses in this case. As a result, the Court concluded that the issue of the employer retaining or forfeiting the gratuity amount did not arise. Consequently, the employer was not permitted to retain the gratuity amount without first initiating proceedings for recovery.
Also read – In the absence of request by employee, Back wages cannot be granted: Cal. HC
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