Srinagar, Oct 8: The High Court today held that the employees of J&K Project Construction Corporation (JKPCC) are not at par with the employees of the Government as such are not entitled to gratuity benefits.
Justice Sanjay Dhar dismissed two writ petitions filed by the Project Construction Corporation Workers Association through its president in a common judgment. The Association had challenged Rule 5(II) of the J&K Projects Construction Corporation Limited Gratuity Rules on the ground that the same is contrary to Section 4(3) of the Payment of Gratuity Act.
Association was seeking direction upon the Government to implement the provisions of Section 4(3) of Payment of Gratuity Act and extend the benefit of the said provision with retrospective effect to the employees of the Association also.
Justice Dharheld that the JKPCC is a Company incorporated under the Companies Act having its own identity distinct from the identity of the Government of Jammu and Kashmir and as such, the rules applicable to the employees of the J&K Government are not applicable to its employees ipso facto.
Court said the said gratuity rules applied to Government employees would become applicable to the employees of the Corporation only if the Board of Directors of the Corporation decides to do so. “In view of the above, I do not find any merit in this writ petition. The same is dismissed accordingly”, court concluded.
The Association had contended that the vires of Rule 5(II) of the J&K Projects Construction Corporation Limited Gratuity Rules is contrary to the provisions contained in Section 4(3) of the Payment of Gratuity Act. The Association contended that as per the impugned Rule, the employees of the Corporation have been held entitled to gratuity to the extent of 20 months wages or Rs. 80,000 whichever is less.
Justice Dhar has clarified that there is no provision of law or statute which makes payment of cash in lieu of leave mandatory. It is the prerogative of an employer to lay down the service conditions and the matters relating to leave, grant of cash in lieu of leave to its employee. “Unless there is a statutory obligation upon the employer to extend a particular benefit to its employees, the employer cannot be directed to extend the said benefit to its employees.
“In the case of payment of gratuity, there is specific enactment i.e. Payment of Gratuity Act, which obliges a particular class of employers as defined under the said Act to make payment of gratuity to its employees at a particular rate”, the court said adding that “there is no such statute which obliges the Corporation to make payment of cash in lieu of leave to its employees”.
Since the leave rules of Corporation, court added, do not provide for extension of such a benefit to its employees, the Corporation is not obliged to grant the said benefit to its employee unless such a decision is taken by the Board of Directors of the Corporation.
The Corporation while defending its stand that the employees are not entitled to gratuity, submitted that specific provisions relating to matter pertains to grant of leave have been framed by the Corporation and therefore, there is no question of applicability of J&K Civil Service Leave Rules 1979 to its employees.
Court has been informed that Rules 37 and 38 of the Rules of 1979 do not have any applicability to the Corporation. It is also contended that the Corporation is a company registered under the Companies Act and it has its own separate existence distinct from the Government, therefore, the provisions of Leaves Rules of 1979 applicable to the employees of the J&K Government cannot be made applicable to the employees of the Corporation ipso facto without approval of the Board of Directors of the Corporation.