Karnataka HC allows recovery of employee dues from gratuity if valid undertaking permits adjustment.
Gratuity Can Be Adjusted for Employee Dues With Consent
The Karnataka High Court held that employer dues can be legally recovered from an employee’s gratuity if a valid undertaking authorizing such adjustment is in place. The petitioner challenged the deduction, claiming statutory protection under the Payment of Gratuity Act, 1972.
The bench distinguished between statutory protection and contractual consent, observing that while gratuity is generally protected, an employee may waive rights through a clear and voluntary undertaking. The court found the deduction lawful given the written authorization provided at the time of employment.
This decision clarifies that statutory protections are not absolute when consent is established. Employers must ensure such undertakings are informed and documented to avoid disputes.
Citations
- Payment of Gratuity Act, 1972
