1. The petitioner has filed the captioned writ petition challenging Exts.P2 and P4 orders passed under the provisions of the Payment of Gratuity Act, 1972 (for short “Act”).

2. The 3rd respondent, who is stated to have been employed with the petitioner herein, filed Ext.P1 application dated 05.12.2016 before the 2nd respondent under the provisions of the Act. By Ext.P2 order dated 28.12.2019, the Controlling Authority directed the petitioner herein - being the employer - to pay the amount quantified therein towards the balance gratuity amount along with interest.

3. Aggrieved by Ext.P2 order, as corrected, the petitioner preferred an appeal before the Appellate Authority, as evidenced by Ext.P4. By the order at Ext.P4, the 1st respondent herein rejected the appeal filed by the petitioner. It is challenging Exts.P2 and P4 orders passed as above that the captioned writ petition has been filed.

4. I have heard Sri.Athul Shaji, the learned counsel for the petitioner, as well as Sri. Adithyan Ezhapilly, the learned counsel for the 3rd respondent herein.

5. Two submissions were made by Sri. Athul. The first contention raised is that, the Government having exercised its power under Section 5 of the Act, as evidenced by Ext.P5 notification, the entire proceedings are liable to be set aside. He would point out that the Appellate Authority, in the order at Ext.P4, has proceeded on the premise that no notification under Section 5 of the Act has been issued, which finding, according to him, is erroneous. Secondly, he would submit that, since the petitioner is calculating the gratuity payable to its employees with reference to Rule 44(a) of its Service Rules, the exclusion contemplated under Section 2I of the Act would apply.

6. Per contra, Sri. Adithyan would submit that the notification at Ext.P5 has not been given any retrospective operation. He would further submit that the exclusion contemplated under Section 2I of the Act applies only in respect of employees of the State or Central Government.

7. I have considered the rival contentions as well as the connected records.

8. Section 5 of the Act, reads as under:

                  “Power to exempt:- (1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

                  (2) The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

                  (3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interests of any person.”

                  (Underlining supplied)

                  It is under the provisions of Section 5(1) and (2) that the Government is conferred with the power to exempt an establishment or an employee from the operation of the provisions of the statute. Sub-section (3) specifically confers power upon the Government to issue a notification under sub-section (1) or sub-section (2) with “retrospective operation”.

9. In other words, under the statute, the Government has been vested with the power to issue an exemption notification even with retrospective operation. However, while issuing Ext.P5 notification dated 23.12.2021, no retrospective operation has been granted by invoking the power under sub-section (3). Therefore, I am of the opinion that the claim raised by the 3rd respondent herein on 05.12.2016 (Ext.P1), is liable to be considered and decided with reference to the provisions as they stood on the said date. Accordingly, the first contention raised by Sri. Athul Shaji is liable to be rejected.

10. The second contention raised, as noticed earlier, is with reference to the provisions of Section 2I of the Act. Section 2I reads as under:

                  “”employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment, to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;”

                  (Underlining supplied)

                  Thus, under the statute, the term “employee” has been defined to mean a person employed in any kind of work, whether manual or otherwise, in an establishment such as a factory, mine, etc. However, the definition excludes persons “who holds a post under the State or Central Government”. Such exclusion is applicable only in respect of a person holding a post under the State or Central Government and who is governed by any other enactment or rules providing for payment of gratuity.

11. It is not in dispute that the 3rd respondent herein is not an employee of the State or Central Government. In such circumstances, the exclusion contained in the latter part of Section 2I of the Act, as contended by Sri. Athul, would not be applicable.

Resultantly, I find no merits in this writ petition, and the same would stand dismissed.