Retired IITB Workers’ Gratuity Case

In light of the recent demise of a former IITB contract worker, Insight delved into the issue of payment of gratuity to institute workers. This article highlights the timeline of related legal affairs and the administration’s response to the current scenario.

IIT Bombay rules state that the retirement age for all non-academic staff is 60. Depending on their employment status and years of service, they are (or are not) entitled to gratuity upon retirement. Gratuity is a monetary benefit payable at the time of retirement or resignation to an employee for the services rendered to an organisation if they have provided continuous service for not less than five years. Additionally, some other employee benefits are also given to eligible workers as per the prevailing labour laws of the country. However, the eligibility (or ineligibility) of contract workers to receive gratuity has come under discord in the public discourse. According to Contract Labour (Regulation & Abolition) Act, 1970 ^[1], workers are deemed to be employed as “contract labour” for an establishment when they are hired in such work by or through a contractor with or without the knowledge of the principal employer (the head of the establishment). 

For the past four years, IIT Bombay has been part of a legal dispute with three contract workers regarding the payment of gratuity. One of the three workers, Shri Raman Garase, who retired on 31st December 2019 after 39 years of service, unfortunately passed away, allegedly by suicide^[2], on the morning of Thursday, 2nd May 2024. We are thankful for his years of service and extend our condolences to his family for the tragic loss. 

At the time of publishing, we are unclear about the status of the investigation and the cause of death. According to this Indian Express article, published on 3^rd May,

“Prima facie inquiry indicates that IIT-B has nothing to do with the suicide case. He worked in IIT-B on contract and then retired. After he suffered a paralysis attack, he was depressed over his health and took the extreme step. He has not left any suicide note. His family too has not given any complaint, so we have registered an ADR,” said a senior inspector of Powai police station.

As per the facts of the case mentioned in the orders passed by the Controlling and Appellate authorities, Shri Raman Garase worked in IIT Bombay under various contractors. He joined the service on 1st January 1981 and worked for 39 years. Similarly, one of his co-litigants joined and worked for IIT Bombay through various contractors with effect from 1st January 1991 for about 25 years till he reached the age of superannuation^[3]  

Prof. Amit Singh, a faculty member at the Department of Mechanical Engineering who was closely associated with the matter, spoke to Insight about the same. He shed light on the circumstances surrounding the legal proceedings and the issue of gratuity payment for contract workers. In 2020, the three workers wrote a letter to the institute administration demanding a gratuity for their services. They were assisted by some students and faculty (including Prof. Amit Singh), who also wrote letters to the admin on their behalf. In September 2020, due to a lack of positive response, the three workers filed an application to the Assistant Labour Commissioner (Central), Mumbai, who is the controlling authority under the Payment of Gratuity Act, 1972 ^{[4] [5]}.

In January 2022, the controlling authority directed IIT Bombay to pay the gratuity amount (which amounted to Rs 4,28,805 for Shri Raman Garase), together with an interest of 10% per annum. Subsequently, IIT Bombay filed an appeal to the Deputy Chief Labour Commissioner (Central), Mumbai, who is the appellate authority under the same act. After two more years of legal proceedings, the appellate authority passed an order on 3rd April 2024 and upheld the decision of the controlling authority.

We were informed by the Registrar of IIT Bombay that:

“Accordingly, before the appeal, IIT Bombay deposited the Gratuity (with interest) of all three contract workers (vide Demand Drafts dated 14.06.2022) to the office of the Assistant Labour Commissioner strictly as per the order of the Assistant Labour Commissioner.”

In the orders passed, the respective authorities called attention to specific sections of the Payment of Gratuity Act, 1972 ^{[4] [5]}, as well as past court judgements. The order stated that this act is a welfare legislation, putting it on a similar footing to other welfare legislations, namely the Employees Provident Fund & Misc. Provisions Act, 1952^[6], and the Employees State Insurance Act, 1948^[7]. In these Acts, contract workers were included within the purview of “employee”. Hence, the controlling authority was of the opinion that the Payment of Gratuity Act covers contractual workers as well because it defines “employee” as “any worker” employed on wages by the establishment.

IIT Bombay contended that the various contractors of these workers are the “employers”; however, the controlling authority considered the contractors to be intermediaries only for paying the wages (and not any terminal benefits to the workers). In the orders passed, the authority noted that the documents submitted by Shri Raman Garase substantiate that he had been in continuous service for 39 years at the Estate Office, IIT Bombay, either directly or under various contractors. The orders stated that the establishment of IIT Bombay was the authority that had ultimate control over its affairs and thus falls under the meaning of the word “employer”, as defined in the abovementioned Act. The order also took note that a contract labourer has no retirement age according to the Contract Labour (R&A) Act, 1970, but Shri Raman Garase had been retired on attaining the age of 60, which is the retirement age of all ‘employees’ of IIT Bombay.

Insight spoke to the institute administration regarding the matter, and they maintained that they cannot comment on legal matters which are currently under consideration. 

Note that at the end of 2022, the Institute constituted the ‘Committee on Casual Labour’ to look into casual labour-related issues. These include but are not limited to the verification of the length of service of casual labour for gratuity. 

“We have always been sympathetic towards this issue (of workers’ gratuity). We want to do right by the people who work for us. That’s why we formed the committee,” said the Dean of Administrative Affairs at IIT Bombay. 

When asked about the nature of the relationship between contract employees and the institute, the Registrar of IIT Bombay commented, “Contract workers cannot be considered as employees of IIT Bombay as they are managed by the contractors employing them.” 

Additionally, the Dean of Administrative Affairs at IIT Bombay mentioned, “There is no certain time after which a contract employee becomes an IITB employee. They need to go through official channels (by applying for the post as and when there is an opening).”

As per law (The Limitation Act of 1963 ^[8]), IIT Bombay, if aggrieved by the order of the appellate authority, can file an appeal in the High Court within a period of 90 days from the date of the order. For the time being, however, it’s unclear what the future of the case looks like. 

References:

1. Contract Labour (Regulation & Abolition) Act, 1970, where the definition of contract workers can be found: https://clc.gov.in/clc/acts-rules/contract-labour-regulation-abolition-act-1970#Definitions
2. Times of India Article alleging suicide as the cause of death: https://timesofindia.indiatimes.com/city/mumbai/retired-iit-gardener-ends-life-students-allege-gratuity-row/articleshow/109796954.cms
3. Superannuation is the attainment by the employee of such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment
4. The Payment of Gratuity Act: https://clc.gov.in/clc/sites/default/files/PaymentofGratuityAct.pdf
5. The Payment of Gratuity Act: https://www.indiacode.nic.in/bitstream/123456789/1703/1/A1972-39.pdf
6. The Employees Provident Fund & Misc. Provisions Act, 1952, cited by the controlling authority in its order: https://www.epfindia.gov.in/site_docs/PDFs/Downloads_PDFs/EPFAct1952.pdf
7. Employees State Insurance Act, 1948, cited by the controlling authority in the order:
   https://labour.gov.in/sites/default/files/theemployeesact1948_0.pdf
8. The Limitation Act, which specifies the time period to appeal: https://www.indiacode.nic.in/bitstream/123456789/1565/1/a1963-36.pdf