In a recent case, the Karnataka High Court was asked to consider whether the orders passed by competent authority appointed under the Payment of Gratuity Act, 1972, admitting belated claim filed by the employees and holding the employer liable to pay the gratuity, was valid when the claim was filed beyond a period of three years.

In this case, the employees had resigned from the post in the year 2006 and a notice claiming the gratuity was issued only in the year 2012.

The Court noted that in terms of Section 13A (2) of the Payment of Wages Act, 1936, an employer was required to maintain the relevant records only up to three years. That apart, Rule 24 of the Karnataka Shops and Commercial Establishments Act, 1961 provides for maintaining the records for only one year. Accordingly, the Court held that if the claim is made beyond a period of three years, the employer would not be under an obligation to provide the statutory registers (such as attendance and payment register) for the relevant period and such failure would not warrant the employer to be liable for payment of gratuity, in absence of the relevant proof of employment.

This update has been contributed by Arka Majumdar (Partner) and Juhi Roy (Associate).