Mere job switch with rival firm can’t bar gratuity: High Court

Kolkata: The Calcutta High Court has ruled that an employee’s attempt to seek work with a rival company cannot be treated as misconduct involving moral turpitude and, therefore, cannot justify forfeiture of gratuity.

Justice Shampa Dutt (Paul), while dismissing a writ petition filed by Xpro India Limited, upheld earlier orders directing the company to release gratuity dues to its former technician, Sudip Samanta, whose services were terminated in October 2022. The company had accused Samanta of disclosing confidential processes to a competitor and sought to forfeit his gratuity under the Payment of Gratuity Act, 1972.

The court, however, found that the domestic enquiry carried out by the company had failed to establish any evidence of misconduct amounting to moral turpitude. Witnesses had merely stated that Samanta was seen speaking to personnel of a rival firm, but no phone records or documentary proof were furnished. The judge described the company’s conclusions as “based on no evidence” and a “perverse determination of fact.”

Emphasising that gratuity is a statutory right, the Court observed that it can only be forfeited if proven misconduct during employment constitutes an offence involving moral turpitude. “Mere attempts to change jobs, even with a competitor, cannot justify forfeiture,” the ruling stated.

The court also held that the disciplinary authority’s approach violated principles of natural justice and amounted to an “abuse of power.”

Directing compliance, the High Court ordered Xpro India Limited to release the gratuity dues to Samanta along with 8 per cent simple interest per annum from April 30, 2009, within 60 days.