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Gratuity, a right not reward

The Supreme Court ruled that gratuity is an unchallenged right of an employee, not a reward that is offered by the management.

Apnainsurance.com Research Bureau

15 Feb 2008

The Supreme Court ruled that gratuity is an unchallengeable right of an employee and not a reward that is offered by the management.

Gratuity is paid for successful completion of the tenure of service. If the employees are entitled to the benefit under the scheme, all the employees must be offered the same. The Supreme Court (SC) gave the ruling the judgment while rejecting appeal filed by the Life Insurance Corporation of India (LIC).

LIC had filed the appeal against a Karnataka High Court ruling which had held that the corporation's Chairman does not enjoy any uncontrolled powers to fix pay scales and other benefits for the employees.

However, the Chairman or the other authorities can use the powers only as given to them under the relevant decree.