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vikram singh (advocate)     22 June 2009

whether gratuity payable to contract employees

dear all,

question no:1

  whether ''A'' who is a regular news contributor on contract basis and whose principal avocation is not that of journalism and  who is not an employee defined under P.G.Act or W.J.Act is eligible for gratuity ?.

if he is not eligible pls send me some citations.

pls note:iam forthe employer.


 9 Replies

jagadish paranjape (Advocate)     11 August 2009

Payment of Gratuity Act is applicable to employees of certain establishments.If a person does not fit in the definition of an employee,he will not be entitled to receive gratuity.Of course if the so called contract is sham,the situation may be different.Distinction has to be made between contract of service and contract for service.In case of the former contract employer employee relationship is established and if the Act is applicable to the concerned establishment,gratuity would be payable to all employees.Of course they have to fulfil the condition of length of contineous service.

P.Elamaran (Law Officer in a CPSU)     11 August 2009

Hi Sashidhar,

I think  , if the gratuity amount forms an inegral part of wages and the concerned employee has been terminated from service, the he will be entitled to gratuity. please refer to Madras Fertilizers Ltd Case-2003 I LLJ 854 Mad.HC.

Ashok Menon (HR MANAGER)     27 November 2012

please let me know that an employee ( cabin crew) she served more that 5 years on contract employment with air india charters ltd is she eligibility for GRATUITY her contract was from mumbai offfice

Please inform me the law points that i can get her this eligibility.



Ashok Menon

Kumar Doab (FIN)     28 November 2012

Kindly look into the attachment.It is felt that gratuity is payable.

Sailen Seth vs Deputy Labour Commissioner & Ors on 23 June, 2010


Kolkata High Court (Appellete Side)

Kolkata High Court (Appellete Side)

Sailen Seth vs Deputy Labour Commissioner & Ors on 23 June, 2010

 "It is therefore futile to
suggest that the petitioner is not liable to pay the aforesaid dues of the respondents Nos.6-121."






Case Name: Airport Authority of India

rep. By its Airport Director, Coimbatore

Airport, Coimbatore vs. Authority under rule

25 (2)(v)(a) & (b) of contract Labour

(R&A) Central Rules, 1971 & Deputy

Chief Labour Commissioner (Central), South

Zone, Bangalore, III Main, III cross, II

Phase, Tumkur Road, Bangalore 22 and

Others. (2012 LLR 399)

Forum: Madras High Court

"13.Hence considering the facts of the case, coupled with the position of law and after considering the object
behind the Contract Labour (Regulation and Abolition) Central Rules, 1971, this Court is of the view that the
order impugned is perfectly in order and no interference needs to be called for. Accordingly, the Writ Petition
is dismissed. No costs. 14.06.2011"

Attached File : 590032719 gratuity to contract labor airports authority of india vs authority under rule 25(2) (v) on 14 june, 2011.pdf, 590032719 gratuity to contract labor sailen seth vs deputy labour commissioner & ors on 23 june, 2010.pdf downloaded: 999 times

jagadish paranjape (Advocate)     28 November 2012

There seems to be some confusion.The facts cited by Adv. Vikram Singh do not indicate that the person was either an employee or even contract labour.He appears to be independent contractor who was paid for  contribution of news.

In case of contract labour one does not hire service bur hires labour  which can be employed for the required service or any service for that matter.

 Even in case of contract labour, the gratuity if any, is to be paid by contractor,if his establishment is amenable to provisions of Payment of Gratuity Act. Even if the contractor fails to pay gratuity to his employees,no liability is cast on principal employer..

Kumar Doab (FIN)     28 November 2012

Heartfelt thanks to Learned Mr. Paranjape for enriching the forum with his valuable advice.

The post with attachment of

Sailen Seth vs Deputy Labour Commissioner & Ors on 23 June, 2010


Kolkata High Court (Appellete Side)


Case Name: Airport Authority of India

rep. By its Airport Director, Coimbatore

Forum: Madras High Court

Was in reference to the post of  Mr. Ashok Menon.

Valuable advice of learned Mr. Paranjape and experts/members is sought, which shall enrich the forum and help many of the members facing similar situation.

jagadish paranjape (Advocate)     28 November 2012

As far as the case of Sailen Seth vs. Dy,. comm. of labour is concerned,the contractor was directed to pay the gratuity and the liability was not fastened on Principal employer i. e. SAIL. Of course some other points like sham contract is also involved,but that relates to facts in that matter and no new legal principle evolves.

Kumar Doab (FIN)     29 November 2012

Learned Mr. Paranjape,

Many thanks for your valuable advice.

Kumar Doab (FIN)     06 August 2016

Readers may also go thru;


Does the contractor have a more beneficial scheme of gratuity than Payment of Gratuity Act?

If yes avail it.



Supreme Court of India
Beed District Central ... vs State Of Maharashtra And Ors 

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