A Worker Who Spends His Entire Career in Service Cannot Be Stripped of His Retirement Benefits: Calcutta High Court

In a significant ruling Calcutta High Court in Hooghly Infrastructure Pvt. Ltd. v. Gopal Das & Ors. dismissed a writ petition filed by the employer challenging the grant of gratuity and interest to a worker who served for 38 years as a ‘badli worker’ (substitute worker in place of permanent employees on leave or absent).

Justice Shampa Dutt (Paul), while upholding the orders of the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act, 1972, observed that denying retirement benefits to a worker who has given his entire life to a company would amount to a gross violation of social security laws.

The court firmly held: "An employee who has admittedly worked for 38 years and has rendered his service towards the work to be carried out by a regular employee will have definitely put in work for the number of days required to make him entitled to such benefits."

"Continuous Service of 38 Years Cannot Be Ignored"

The case revolved around Gopal Das, a worker who was engaged as a badli worker on May 7, 1976, and continued in that position until his retirement on June 30, 2014.

Upon retirement, he applied for gratuity in 2016, but the company refused to pay, arguing that he was not a permanent employee and had not completed the required five years of continuous service with 240 working days per year.

The worker approached the Controlling Authority, which directed the company to pay gratuity for 34 years of service (from 1980, the year he became a provident fund member, to 2014). The amount awarded was ₹2,04,465 as gratuity and ₹1,89,130 as interest, totaling ₹3,93,595.

The company’s appeal before the Appellate Authority was dismissed, and it was directed to pay the outstanding interest amount. Challenging both orders, the company filed the present writ petition before the High Court.

"Failure to Produce Employment Records Leads to Adverse Inference Against Employer"

The company contended that Gopal Das was never a permanent employee and did not work continuously for 240 days every year. However, both the Controlling Authority and the Appellate Authority found that the company failed to produce employment records to support its claim.

Citing Supreme Court precedents, the Appellate Authority noted: "It is the duty of the employer to maintain attendance registers of its employees. The company failed to produce the original service records, even when ordered by the Controlling Authority. Given the circumstances, an adverse inference must be drawn against the employer."

The High Court agreed with this finding and held that the employer’s failure to provide records was fatal to its case.

Quoting from Union of India v. Ibrahim Uddin (2012) 8 SCC 148, the court reiterated: "When a party withholds material evidence, the court may draw an adverse presumption against it, notwithstanding the onus of proof not lying on such a party."

"Employment for 38 Years—A Life Dedicated to the Company Deserves Social Security"

The court strongly emphasized that the nature of employment—whether permanent or badli—was immaterial when a worker had spent his entire career serving the company.

Rejecting the employer’s argument that a badli worker is not entitled to gratuity, the court held: "If a worker has served continuously for 38 years in a permanent post, performing duties of a regular employee, he cannot be denied benefits under a beneficial legislation like the Payment of Gratuity Act."

It further stated: "The worker’s employment spanned decades, and he was also a member of the Provident Fund scheme. To deny him gratuity would be a clear abuse of the process of law."

The court criticized the employer’s attempt to exploit a legal loophole to evade gratuity payments, warning against such unfair labor practices.

"If such conduct of the employer is ignored, there shall be a clear abuse of the process of law," the judgment stated.

"No Interference Needed—Employer Must Pay Full Gratuity with Interest"

After considering all facts, the High Court concluded that the orders of the Controlling and Appellate Authorities were in accordance with the law and did not warrant interference.

Justice Shampa Dutt (Paul) dismissed the writ petition, ruling: "The employee has now superannuated after 38 years. Having done so, the least that he is entitled to are the retiral dues (social security) which include gratuity. Such benefits should be made available to the employee without any hindrance."

The petition was dismissed, and the employer was directed to pay the full gratuity amount along with interest.

This judgment reinforces the principle of social security and fair treatment for long-serving employees, regardless of their formal classification. By holding that a badli worker serving for decades cannot be denied gratuity, the court has upheld the spirit of labor laws and protected workers from arbitrary denial of retirement benefits.

The ruling is a strong reminder that employers cannot escape their legal obligations by manipulating employment classifications. It ensures that workers who dedicate their lives to a company are not left without financial security in their old age.

Date of decision:  March 4, 2025