Gratuity rows fall within jurisdiction of consumer forums

A consumer forum has held that disputes relating to employee gratuity fall within its purview. The forum directed Godrej Consumer Products Ltd to pay former employee Vipin Dwiwedi his gratuity of Rs 2.21 lakh along with Rs 1.43 lakh compensation for the 13-year delay. “The opponents, by not paying gratuity to the complainant, have indulged in deficiency of service,” the additional Mumbai suburban district consumer disputes redressal forum said.

In the complaint filed in 2010, Dwiwedi alleged that after 25 years of service the firm asked him to resign. He claimed that while his pension and provident fund were given to him, his gratuity was denied.

The company argued that Dwiwedi did not fall within the definition of a consumer as he had resigned. Further, as he was involved in illegal gratification, which caused losses to the company, the claim for the gratuity was not settled.

The company then contended that the complainant's claim for gratuity did not lie within the forum's jurisdiction. To this, the forum pointed out that though the amount of gratuity was considered under the Gratuity Act, it did not prohibit the jurisdiction of a consumer forum to entertain and decide the point of gratuity. It also relied on a National Commission order that said that the amount of gratuity could be withheld only to the extent of amount defalcated (a defalcation is the amount of funds misappropriated by a person trusted with its charge) by the employee.

“Though the opponents have come with the case that the complainant had involved in illegal activities due to which it lost Rs 8 lakh, no documents about any inquiry or criminal prosecution have been filed,” the forum said. It observed that even after the resignation no action was initiated against Dwiwedi.