Mumbai: Five months after retired gardener Raman Garase died by suicide at his home in Mumbai, he posthumously won a Bombay High Court case against his employers at the Indian Institute of Technology-Bombay (IIT-B).
Since 2020, as Article 14 reported in May 2024, Garase and two other daily-wage workers—Dadarao Ingale and Tanaji Lad—had been locked in a legal battle with IIT-B, demanding payment of post-retirement gratuity benefits after working 39, 25 and 20 years respectively on the campus of the prestigious public engineering institute.
Garase’s job as a gardener at IIT-B earned him Rs 733 a day when he retired in December 2019.
In January 2022 and April 2024, the three workers won two rulings in their favour from the labour court in Mumbai. However, IIT-B appealed the last ruling in the high court.
The institute claimed that Garase, Ingale and Lad were workers hired through a labour contractor, and since they were not direct employees of IIT-B, the institute was not responsible for paying gratuity benefits.
In a judgement delivered on 5 October 2024, the high court dismissed IIT-B’s arguments and upheld the labour court’s order in favour of Garase, Ingale and Lad. It ordered IIT-B to pay the gratuity amount due to the three workers.
“For the limited purpose of payment of gratuity, respondents [the three workers] are required to be treated as employees of IIT-Bombay,” said the high court order by Justice Sandeep Marne, of which Article 14 has a copy.
“I am of the view that no palpable error is committed by the Controlling Authority and the Appellate Authority [of the labour court] in passing the impugned orders. Writ petitions [the appeal by IIT-B] are accordingly rejected,” said Justice Marne.
Of the three workers, Ingale and Lad had already withdrawn their principal gratuity amount of Rs 235,000 and Rs 189,000 respectively earlier in 2024, from the money that IIT-B was required to deposit with the labour court.
Now, the Bombay High Court has ordered the institute to allow the legal heirs of Raman Garase to withdraw the Rs 428,000 gratuity due to him as well. It has also directed IIT-B to pay all three workers interest on the principal gratuity amount within two months of its order.
‘My Father’s Sacrifice Has Borne Fruit’
“I am very happy about this high court order. My father’s struggle and sacrifice has borne fruit,” said Sunil Garase, Raman Garase’s son, a marketing professional and sole breadwinner for his mother, wife and child.
“It has taken more than four years to win this case in the high court, but better late than never,” said Sunil Garase. “Other workers who will retire from IIT in the future will benefit from this.”
Beyond workers within IIT-B, the high court judgement in this case could have significant ramifications for millions of workers employed on temporary contracts nationwide.
Contract workers make up 39.4% of the public sector workforce in India, and in 2022, there were 524,423 contract workers in central public sector enterprises alone. In the private sector, manufacturing alone accounted for 5.5 million contract workers in 2021-2022.
Over the years, there have been a number of high court cases from across India about contract workers demanding gratuity payment from their principal employers, and many of the verdicts have upheld workers’ rights.
According to labour lawyer Rohini Thyagarajan, these court judgements, in themselves, are not likely to prevent employers from exploiting contract workers. “Irrespective of what a court order says, we know that employers will always find different ways to avoid financial liability, especially with contract workers,” said Thyagarajan, who practises in Mumbai.
However, high court and Supreme Court orders set a precedent for the way similar cases are judged in the future.
“Through this [IIT-B] judgement, we now know that in situations where contractors keep changing while workers remain the same, the principal employer is responsible for gratuity payment because workers cannot be made to chase all the different contractors they were shown to have worked under,” said Thyagarajan.
It is unclear whether IIT-B will choose to appeal the high court’s order before the Supreme Court. Article 14 sent a list of questions on 14 October 2024 to the institute’s director, Shireesh Kedare, and its public relations officer, Falguni Banerjee Naha. There was no response. We will update this story if they do respond.
Sudha Bharadwaj, one of the lawyers on the workers’ legal team, said she hoped IIT-B would not place any further legal obstacles in the path of the Lad, Ingale and particularly Garase’s widow and other legal heirs.
“There have now been concurrent judgements from three courts in favour of the workers,” said Bharadwaj, referring to the orders by the controlling and appellate authorities of the labour court as well as the high court.
“We really hope that for these workers, who have spent so many years labouring on the premises of IIT, the institute just gracefully pays them the gratuity amounts due to them,” said Bhardwaj.
A Questionable Contract System
Gratuity is a social welfare benefit that workers in India are legally entitled to, along with provident fund, health insurance and pension. Established under the Payment of Gratuity Act, 1972, it is a sum paid to an employee at the end of their service.
Employees are eligible for gratuity once they complete five years in a particular organisation, and the amount paid is calculated as 15 days’ wages for every year served.
This is straightforward enough when a worker is directly hired as a regular employee of an organisation, but what happens when workers are employed indirectly, on short-term contracts, through external contractors who supply labour?
As Article 14 has previously reported, employers often use such contractualisation of labour to save money and avoid paying welfare benefits to workers.
The contractualisation of labour has been a growing trend in the public sector in India in the past few decades. Data from the union finance ministry’s department of public enterprises shows that in 2012-13, contract-based workers formed 16.5% of the total workforce in Indian public sector undertakings. That number rose to 35% in 2020-21 and further to 39.4% in 2022-23.
Many of the jobs that are contractualised to external agencies tend to be blue-collar services, such as housekeeping, maintenance and various aspects of construction.
IIT-B, which is a public institution under the union government, deploys at least 1,800 contract workers on its 550-acre campus. There are 22 other IITs across India, with thousands more contract workers.
Like Raman Garase, many of these labourers—gardeners, mess workers, electricians, housekeeping staff—have worked the same jobs for years, under the direction and supervision of IIT’s own officials. On paper, however, they are short-term employees of external contractors.
Every one or two years, the contractors are cyclically replaced, and the workers begin receiving their salaries from a different contractor even though their work remains uninterrupted.
In response to the demand for gratuity by Garase, Ingale and Lad, IIT-B cited this contract system to claim that it was not the real employer of these contract workers, and therefore not liable to pay.
The high court order of 5 October 2024, however, clearly points out flaws in IIT-B’s argument—particularly the fact that it was the institute, and not the contractor, that had control over the workers’ services.
The workers, said the Bombay High Court, “have not travelled with their contractors to different organisations during the tenure of their long services. On the contrary, they have continued with IIT-Bombay for considerable periods of time even though contractors kept on changing”.
Since the workers’ services were not terminated at the end of each contract, the Court explained that they had no occasion to claim gratuity from various different contractors.
After retirement, if they had claimed gratuity only from the last contractor for their entire duration of service, their request would have been rejected—the last contractor is not liable for paying gratuity for periods when the workers were not under his contract.
The Court described this as a “unique situation”, and “clearly…an arrangement [by IIT] of merely routing salaries through the contractor”.
This is why the high court insisted on pinning the responsibility for payment of gratuity on IIT-B.
Possible Hope For The Future
The Court’s judgement also questioned why the institute had not already ensured the payment of gratuity for all contract workers by incorporating it as a clause in the tenders, or work orders, awarded to external contractors.
Currently, many contract workers at IIT-B get welfare benefits, such as provident fund (PF) and medical insurance, through the Employees’ State Insurance Corporation (ESIC) because the institute’s work orders given to contractors make it mandatory to provide them.
The Bombay High Court order observed that “when IIT-Bombay is specific in directing deposit of ESIC and PF contribution, it is incomprehensible as to why liability for payment of gratuity was not specifically incorporated in the work order”.
While IIT-B had not taken such a step for Garase, Ingale, Lad and other workers who have now retired, one labour contractor believes it is possible the institute might include payment of gratuity as a clause in its future tenders.
“In meetings with some of us contractors in the past two years, IIT has mentioned that it will provide gratuity policies for workers, to be paid through the contractors,” said Latif Shaikh, owner of the labour contracting agency Moosa Services, with which Garase was last employed.
“When workers retire, they would have to submit a gratuity application form to IIT, which keeps records of each worker’s employment history,” said Shaikh. “Then the worker’s last contractor would have to withdraw the gratuity amount and pay it.”
Shaikh specified that IIT-B has not yet implemented this plan in any of his own work orders, but he believes it would be the “right decision for worker welfare”.
‘Why Can’t They Listen?’
Whether or not IIT-B includes gratuity payments in its future work orders to contractors, contract workers on its campus, for now, draw hope from the high court order in the Garase case.
“If the Court has said that these three workers have a right to get gratuity, then all of us who have retired should get it too,” said a 62-year-old mason who retired from his contract-based job at IIT-B two years ago. He spoke on condition of anonymity. “And if we get it, other workers who will retire in the future should also get paid.”
The retired mason had spent 29 years on the job, earning barely Rs 16,000 a month at the time he retired. “My children don’t have very well-paying jobs, so gratuity would be very helpful for my old age,” he said.
Another worker—a carpenter in his 40s who also requested anonymity—said that the high court verdict has spurred many contract-workers at IIT-B to consider asking the institute for the assurance that they will be paid gratuity upon retirement.
“Before the Garase case, no one was getting gratuity. But now we know it is our right,” said the carpenter, who gets paid a daily wage of Rs 948 after over 20 years of service. “Gratuity should be mentioned in our contracts itself. No more workers should have to fight for it.”
Meanwhile, Dadarao Ingale—Garase’s colleague and co-petitioner in the gratuity case—is feeling less hopeful about getting the interest amount on his gratuity that the Court ordered IIT-B to pay.
“So far, they have still not paid me the interest. I am afraid that IIT will fight this case further in the Supreme Court,” said Ingale, 65, who says he is tired of the legal battle.
In the past few months, Ingale has been in and out of hospitals for a kidney problem that has been draining his family’s finances. “We are poor people. IIT has got three court orders now. Why can’t they just listen and pay us?”
(Aarefa Johari is an award-winning independent journalist writing on gender, labour, human rights, culture and more.)
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