Gratuity Payment: In a recent important decision, the Supreme Court has clarified that criminal conviction is no longer necessary to confiscate an employee’s gratuity. If an employee is dismissed on grounds of moral turpitude, his employer can withhold his gratuity. This decision will affect cases where employees are accused of unethical conduct, even if no criminal case is filed against them in any court.
What is moral turpitude?
Moral turpitude refers to unethical activities that question the employee’s honesty, credibility and ethical values. This may include fraud, corruption, financial irregularities, use of fake documents, manipulation and other unethical acts. If an employee knowingly engages in activities that violate the rules and ethical standards of the organization, he may be considered morally unfit.
What has changed in the law?
In 2018, the Supreme Court had said in one of its decisions that to stop an employee’s gratuity, the employer must first prove that the employee was criminally guilty of moral turpitude. That is, a conviction from the court was necessary. But this condition has been removed in the recent decision. Now if an employee is found guilty of moral turpitude after a departmental inquiry, the employer will not need to wait for the court’s decision. He can directly stop the employee’s gratuity.
What was the case in the Supreme Court?
In this case, an employee was accused of submitting a wrong date of birth to get his job. The actual year of birth of the employee was 1953, but he mentioned 1960, which made his age look younger and he got the job. This employee worked in a Public Sector Undertaking (PSU) for 22 years. When the PSU investigated, it came to light that if the employee had given his correct date of birth, he would not have been eligible for the job.
Thereafter, the Disciplinary Committee held the employee guilty of moral turpitude and dismissed him from service and stopped his gratuity. Although no criminal case was registered against the employee, the Supreme Court held that gratuity can be confiscated in case of moral turpitude.
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