The Kerala High Court has ruled that retired abkari workers of Kerala State Beverages Corporation Ltd. are entitled to gratuity under the Payment of Gratuity Act, 1972, even if they have already received terminal benefits under the Kerala Abkari Workers Welfare Fund Act, 1989. A Division Bench allowed a batch of writ appeals filed by such workers against a previous decision that had denied them gratuity on the ground that they had already availed benefits under the welfare fund.
The dispute arose because a Single Bench had held that paying gratuity under the Gratuity Act to abkari workers who had already received benefits from the welfare fund would amount to double payment. The Single Judge had treated abkari workers as a separate class not covered by the Payment of Gratuity Act and referred to an agreement between the corporation and trade unions that purportedly provided for gratuity only under the welfare fund scheme.
On appeal, the High Court examined the statutory language of the Gratuity Act and concluded that exclusion from the definition of "employee" under the Act requires that the individual holds a government post and is governed by some other statutory scheme providing gratuity. The Court found that the mere fact of receiving benefits under another law does not automatically disqualify a person from claiming gratuity under the Gratuity Act. It noted that the state had not issued any proper notification to exempt abkari workers or their employer from the Act’s operation.
The Bench further observed that classifying abkari workers as a separate category exempt from statutory gratuity was unjustified. The argument that payment under the welfare fund would amount to “unjust enrichment” if statutory gratuity were also paid was rejected. The Court held that dual benefit per se cannot be treated as unjust when both schemes are legally recognized and funded.
In light of this reasoning, the High Court directed that abkari workers be paid gratuity under the Payment of Gratuity Act and in accordance with the corporation’s service rules within three months of the judgment. The appeals were accordingly disposed of.
This decision affirms statutory rights for a long‑neglected class of workers. The Court reaffirmed that benefits under a welfare scheme do not automatically deprive workers of their entitlement under a general labour statute unless the law explicitly provides for such exclusion. The judgment clarifies that for an exemption or classification to override a statutory right, the state must issue a formal notification under the relevant provision — a step that was not taken in this case. Consequently, abkari workers who had retired and received terminal payments under the welfare fund scheme now have a clear legal entitlement to claim gratuity under the Payment of Gratuity Act.
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