If two choices are available, employee can select the one having higher benefits

Kerala State Co-Operative Bank Ltd Vs S. Viswanathamallan (Kerala High Court)

Held that when two choices are available, one under the provisions of the Payment of Gratuity Act and the other under such arrangement with the employer and if the latter offers better terms, the employee cannot be denied the right to receive those higher benefits.

Facts-

The Kerala State Co-operative Bank Ltd., the respondent in the writ petitions is the appellant before us. The respondents – writ petitioners are the retired employees of the appellant Bank having more than 20 years of service. They filed the writ petition contending that they were governed by the Appendix IV Gratuity Rules of the Kerala State Co­operative Bank Staff Regulations (Ext.P1) and the Payment of Gratuity Act, 1972. Rule 5(e) of Ext.P1 stipulates that gratuity payable shall be the amount equal to one month’s pay for every year of service, provided that the amount so payable shall not exceed 15 months pay. As per Section 4(3) of the Payment of Gratuity Act, 1972, the maximum amount payable to an employee shall not exceed Rs.10 lakh. However, Section 4(5) of the Payment of Gratuity Act, clearly provides that nothing in that section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

Conclusion-

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