I was with a cooperative bank on a 5-year contract which was further extended for several one-year contracts, resulting in more than 8 years of continuous service. Those contracts stated that it included ex-gratia payment in the monthly salary. As gratuity is legally payable after 5 years of continuous service, am I entitled to gratuity at the end of employment, as ex-gratia and gratuity are not the same.
From India, Ahmedabad
Acknowledge(0)
Amend(0)
From India, Ahmedabad
Acknowledge(0)Amend(0)
Dear Rajesh,
There is no mention about the total number of employees employed in the co-operative bank to know the applicability of the Payment of Gratuity Act, 1972 to it. Assuming that the bank comes under the purview of the PGA, whatever be the mode of employment - whether permanent, temporary, casual, or contract basis, including fixed-term direct contract or through a third party, once such an employee completes the minimum qualifying continuous service of 5 years there, he becomes eligible to claim gratuity under the Act on his termination of employment due to resignation or expiry of the contract once for all without any further extension.
Moving on to the question of the monthly payment of ex gratia, it cannot replace the statutory gratuity payable, for ex gratia is a separate payment made at the discretion of the employer, whereas gratuity is his statutory obligation payable only on the termination of employment, that too in a lump sum. Therefore, the payment of ex gratia by the employer at his will to an employee while in service, irrespective of the reason for or mode of payment, cannot be a substitute for the payment of statutory gratuity on the termination of his employment.
From India, Salem
Acknowledge(0)Amend(0)
6108There is no mention about the total number of employees employed in the co-operative bank to know the applicability of the Payment of Gratuity Act, 1972 to it. Assuming that the bank comes under the purview of the PGA, whatever be the mode of employment - whether permanent, temporary, casual, or contract basis, including fixed-term direct contract or through a third party, once such an employee completes the minimum qualifying continuous service of 5 years there, he becomes eligible to claim gratuity under the Act on his termination of employment due to resignation or expiry of the contract once for all without any further extension.
Moving on to the question of the monthly payment of ex gratia, it cannot replace the statutory gratuity payable, for ex gratia is a separate payment made at the discretion of the employer, whereas gratuity is his statutory obligation payable only on the termination of employment, that too in a lump sum. Therefore, the payment of ex gratia by the employer at his will to an employee while in service, irrespective of the reason for or mode of payment, cannot be a substitute for the payment of statutory gratuity on the termination of his employment.
From India, Salem
Acknowledge(0)Amend(0)Gathering data for an AI comment.... Sending emails to relevant members...
Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Key features of employment contracts.pdf
M & A - Transfers of employment contracts.docx