Gratuity Payment: The Supreme Court has said that if the ‘moral turpitude’ of the employee is proved in the hearing of the company’s disciplinary committee, then the employer can confiscate his gratuity payment.
Supreme Court on Gratuity payment: The Supreme Court has given an important verdict regarding gratuity. In its decision delivered on February 17, 2025, the court said that criminal conviction is no longer necessary to confiscate the gratuity of an employee under the Gratuity Payment Act, 1972. The Supreme Court of India says that if the employer has dismissed an employee from the job citing the reason of ‘moral turpitude’, then this reason itself is sufficient basis for confiscating the gratuity of the employee.
What is the meaning of ‘moral turpitude’?
Let us tell you that the term ‘moral turpitude’ is often used in matters of labor and employment law. It refers to actions that are wrong or unethical such as committing fraud. After this new order of the Supreme Court, now if the employer fires an employee on the basis of actions related to ‘moral turpitude’, then he can also refuse to pay him his gratuity. Lawyers say that this is a very important decision and is completely opposite to the decision given by the court in 2018.
Now there is no need to wait for the court’s decision
With this new decision, if an employee is fired due to ‘moral turpitude’, then the employer can now take action to seize his gratuity under the Gratuity Payment Act, 1972 and for this they will not have to wait for the court’s decision.
What is gratuity?
Gratuity is an important benefit given to employees who remain in the company for a long time. For this, the employee should complete a service period of at least 5 years in a company or institution. It is paid to the family of the employee at the time of retirement or after resignation or after the death of the employee.
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