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Private Hospitals Are Covered Under Payment Of Gratuity Act

In WA.No. 1737 of 2013, M/S LOURDES HOSPITAL vs DR.ABRAHAM MATHEW, the Division Bench of the Kerala High Court, held that whether an establishment made profit or not was immaterial. Following the SC precedent Management of Tata Iron and Steeel Co.Ltd vs Chief Inspecting Officer and others, the bench observed that if the activity is frequent, continuous and relating to business, whether it earns profit or not is irrelevant. Since the above ingredients were present in respect of the activities of the hospital, it was held as an establishment under Section 2(6) of the above Act. Going by the scheme of of Gratuity Act, the shops and commercial establishments, which were covered under the Shops Act at the time of introduction of Gratuity Act would continue to be so covered under the said Act, irrespective of any amendment, repeal or exemption brought under the Shops Act. It cannot be said that the amendment of the Shops Act, if not brought into the Gratuity act, would make the Gratuity Act unworkable. For the same reason, a notification for exemption under the Shops Act would not apply to the Gratuity Act, as the power to grant exemption from the provisions of the Gratuity Act stands exclusively vested with the Central Government.

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