Gratuity can not be taken away by contract

In CIVIL APPEAL NO. 1478 OF 2004 Allahabad Bank & Anr. v. All India Allahabad Bank Retired Emps. Assn. decided on 15/12/2009 the Supreme Court held that:
Gratuity is a statutory right; it can not be taken away by agreement. Employees having exercised their option to avail benefits under pension scheme are not stopped from claiming benefit under provisions of Payment of Gratuity Act, 1972. An establishment (Allahabad Bank in this case) is under statutory obligation to pay gratuity as provided for u/s. 4 read with s.14 of the Act . there is no escape from payment of gratuity under the provisions of the Act unless the establishment is granted exemption from the operation of the provisions of the Act by the appropriate Government.Provisions of Act prevail over all other enactment or instrument or contract so far as payment of gratuity is concerned. The right to receive gratuity under the provisions of the Act cannot be defeated by any instrument or contract.

The Supreme Court relied on Municipal Corporation Delhi v. Dharam Prakash Sharma & Ors. (1998)7SCC 221, where it was held that: "The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act, the provision for gratuity under the Pension Rules will have no effect.