“Non Payment Of Dues To Employee For Seeking Another Job Against Principles Of Natural Justice”: Calcutta HC

Calcutta High Court

The Calcutta High Court has ruled that an employee cannot be denied their rightful dues merely for exploring better opportunities, even with a rival company.

The court emphasised that such conduct does not amount to moral turpitude and is instead a basic right of every worker.

Court’s Observation

Justice Shampa Dutt (Paul), while setting aside a disciplinary order against a technician, directed the employer to release pending gratuity dues of ₹1.37 lakh along with 8% simple interest per annum.

“Looking for another job, even if with a rival company (though, not proved in this case) with better perks and facilities is a basic right and does not constitute moral turpitude as it is not contrary to honesty, modesty or good morals,” the judge stated in her judgment delivered on Thursday.

The court further held that the company failed to prove that the employee’s actions had caused any damage, loss, or destruction of property belonging to the employer.

Violation of Natural Justice

Justice Dutt strongly criticized the company’s internal inquiry, calling it “an abuse of power and totally against the principles of natural justice.” She noted the absence of independent findings, reasoning, or adherence to fair procedure in the disciplinary process.

The petition was filed by the company—claiming to be the sole manufacturer of a particular type of insulator film in India—against earlier orders of the Controlling Authority and Appellate Authority, which had directed payment of gratuity to technician Sudip Samanta.

Dismissing the company’s plea, the high court upheld the Appellate Authority’s order, calling it well-reasoned, lawful, and within jurisdiction under the Payment of Gratuity Act.

Lack of Evidence Against Employee

The employer had accused Samanta of maintaining regular contact with officials of a rival company that was attempting to set up a similar manufacturing unit. It was further alleged that he leaked confidential details about the process, technology, and receipts.

However, the court noted that the company failed to produce concrete evidence—no witnesses or call records were provided to prove the charges. The witnesses presented only claimed that they had “seen” Samanta talking to rival personnel, which was insufficient to establish misconduct.

Employee’s Termination and Court’s Stand

The enquiry officer had earlier found Samanta guilty and recommended his termination. The company argued that this misconduct amounted to moral turpitude, leading to financial loss, and hence justified forfeiture of his gratuity.

Samanta, who joined the company in 2012, was eventually terminated on October 11, 2022. He had also claimed to have resigned during the proceedings.

The court, however, ruled that the company’s stand was untenable. Justice Dutt concluded that denying gratuity on such unproven grounds was unlawful and against the principles of fairness.