Conditions incorporated under Ex Gratia Scheme, precluding an employee from pursuing litigation against employer are enforceable

Kerala High Court: A Bench comprising of P.R. Ramachandra Menon and Dama Seshadri Naidu, JJ. disposed of an appeal filed by an employee against his employer, by holding that he cannot claim the benefits of an Ex Gratia Scheme introduced by the employer, without complying with the conditions incorporated under the Scheme.

The respondent introduced an Ex Gratia scheme for its ex-employees. To avail the benefits of the scheme, an employee had to give an undertaking that he has no litigation pending against the corporation. Since, the appellant had a dispute pending against the corporation, it precluded him from being enrolled under the scheme. Consequently, he filed a Writ Petition, challenging the said condition as arbitrary and discriminatory, affecting his constitutional right to approach a court. The Single Judge held that the scheme is non-statutory, therefore, if an employee wants to avail its benefits, he must accept it in its entirety. He further held that the employee will be entitled to the benefits of the scheme, since the day it was introduced, once he files the requisite undertaking. This decision was challenged by both the employer (on the ground that the employee can’t get the benefits retrospectively, but only from the date of filing of the undertaking) and the employee (on the ground that it did not allow him to have the benefit without reference to the earlier dispute).

The Court while noting the importance of “access to justice”, stated that there will be no remedy if the right claimed has no legal recognition. Since the Corporation has no statutory or contractual obligation to the employee and the scheme introduced by it was merely ex gratis, it lacks enforceability. Thus, it can be couched in conditions. Therefore, the holding of the Single Judge that, the scheme contradicts no provision of law, is unassailable. In view of the same, the employee is only entitled to the benefits of the scheme after the date of the decision of the earlier litigation, and not retrospectively, from the date of introduction of the scheme. [V.G.K. Naidu v. Bharat Petroleum Corporation Ltd, 2017 SCC OnLine Ker 2588, decided on 11.04.2017]

Join the discussion

Your email address will not be published. Required fields are marked *

7 + 11 =