The Court, therefore, proceeded to examine the definition of ‘wages’ under Section 2(s) of the Payment of Gratuity Act.
It held that wages as per the definition, the emphasis is on what is earned by the employee “in accordance with the terms and conditions of employment”.
“Irrespective of whether what was earned has been paid or remained payable, the same is included in the definition, provided it is in accordance with the terms and conditions of his employment,” the Court said.
Applying the same to the instant case, the Court noted that what was claimed in the first round of litigation was not what was payable in accordance with the terms and conditions of employment.
“It is a fundamental principle of law that a party who is in enjoyment of an interim order, is bound to lose the benefit of such interim order when the ultimate outcome of the case goes against him. Merely because of the fortuitous circumstance of the Voluntary Separation Scheme coming into effect before the transferred cases were finally dismissed by this Court by an order dated 25.04.2003, creating an illusion as though the last drawn pay included this ad hoc payment, it is not possible to go against the fundamental rule that the benefits of an interim order would automatically go when the party who secured it, failed in the final stage,” the Court ruled.
However, in view of the efflux of time and taking into account the fact that few employees are now no more, the Court directed the management not to effect any recovery, if payment has already been made to any of the respondents or their families.
Source: Barandbench
