New Delhi: The Supreme Court has ruled that a principal employer cannot be held responsible for paying gratuity to workers engaged through a contractor when there is no direct employer-employee relationship between the workers and the principal employer. The ruling came in a case involving Oil and Natural Gas Corporation Ltd (ONGC), in which the court set aside a Bombay High Court order that had fastened gratuity liability on the company.
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A bench of Justices Ahsanuddin Amanullah and Manmohan held that the Controlling Authority under the Payment of Gratuity Act could not decide and fasten employer liability where no direct employment relationship existed. The dispute involved workers engaged through contractors who had claimed gratuity from ONGC. The Supreme Court restored the position taken by the Appellate Authority in ONGC’s favour and set aside the Bombay High Court order.
The Court Tightened Rules on Arrest and Re-Arrest
In a separate ruling, the Supreme Court said an arrested person has a fundamental and statutory right to receive the grounds of arrest in writing. If the requirement is not followed, the arrest can be rendered illegal. The court further ruled that if a person is released after an arrest is declared illegal, an investigating agency cannot simply arrest the person again on its own; it must first approach the jurisdictional magistrate for permission and comply with the required safeguards.
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