I work for an American company that runs an outsourced center in Bangalore and is registered as a Pvt Ltd company. I'm completing my notice period and have worked here for about 8 years. When I checked with the HR regarding the gratuity, I was told that they do not follow that practice in the company. Can a company choose to pay gratuity or not, and if necessary, what actions can an employee take to receive the gratuity amount?
From India, Bangalore
From India, Bangalore
Dear,
If a company has 10 or more employees, this act is applicable to them. There is no choice, and they are bound to pay gratuity. You can file a case before the controlling authority under the Payment of Gratuity Act 1972.
From India, Delhi
If a company has 10 or more employees, this act is applicable to them. There is no choice, and they are bound to pay gratuity. You can file a case before the controlling authority under the Payment of Gratuity Act 1972.
From India, Delhi
Dear Malick,
My husband worked for a PVT LTD firm for the last 11 years, and this year they told him to search for a new job as they don't have the business to retain employees. Now, they are giving excuses for gratuity, saying that the company is in a bad economic state. On the other hand, the company never provided any PF, ESI, or other benefits, paid cash salaries until 2008, and then by cheques. They have also sent my husband to a number of locations while on the job.
In this case, should we expect gratuity, and what should be the approximate amount? He started with 3,000, and at the time of leaving the job, he was drawing 17,500.00. Presently, we are located in Mumbai, and the company's head office is in Delhi.
Kindly help.
From India, Mumbai
My husband worked for a PVT LTD firm for the last 11 years, and this year they told him to search for a new job as they don't have the business to retain employees. Now, they are giving excuses for gratuity, saying that the company is in a bad economic state. On the other hand, the company never provided any PF, ESI, or other benefits, paid cash salaries until 2008, and then by cheques. They have also sent my husband to a number of locations while on the job.
In this case, should we expect gratuity, and what should be the approximate amount? He started with 3,000, and at the time of leaving the job, he was drawing 17,500.00. Presently, we are located in Mumbai, and the company's head office is in Delhi.
Kindly help.
From India, Mumbai
A company cannot escape payment of gratuity to eligible employees by saying that it is running losses. At the same time, it is the obligation of the company to pay it within 30 days of the employee leaving, EVEN IF THE EMPLOYEE DOES NOT ASK FOR IT. In other words, if the employee is not traceable, the company should DEPOSIT the amount with the Government (Labour Department); failing which, the company will be constrained to pay interest.
In the above circumstances, there is nothing wrong in demanding gratuity by sending an application in Form I (attached). If no intimation is received from the company (the company is expected to intimate the date of payment of gratuity in Form L) within 30 days, file a complaint before the District Labour Officer. You will get it.
The amount of gratuity is equal to 15 days' salary for every completed year of service. If there is a fraction of a year of more than six months, it shall be taken as one year, whereas a fraction of a year of less than six months shall be ignored. Salary for this purpose will include basic salary and dearness allowance only, and the gratuity is calculated on the LAST DRAWN SALARY.
Regards,
Madhu.T.K
From India, Kannur
In the above circumstances, there is nothing wrong in demanding gratuity by sending an application in Form I (attached). If no intimation is received from the company (the company is expected to intimate the date of payment of gratuity in Form L) within 30 days, file a complaint before the District Labour Officer. You will get it.
The amount of gratuity is equal to 15 days' salary for every completed year of service. If there is a fraction of a year of more than six months, it shall be taken as one year, whereas a fraction of a year of less than six months shall be ignored. Salary for this purpose will include basic salary and dearness allowance only, and the gratuity is calculated on the LAST DRAWN SALARY.
Regards,
Madhu.T.K
From India, Kannur
Dear Jaya Keerthi,
A company employing 10 or more employees has to pay gratuity to its employees upon separation from the company, provided they complete continuous service of 5 years (one year's service in the case of death). Since you have completed 5 years of service, you can apply for the payment of gratuity in Form I to your employer under the Payment of Gratuity Act. If your company does not pay the gratuity, you can approach the Labour department. The concerned Assistant Commissioner of Labour is the controlling authority under the Act.
D. Phani Kumar
Sr. Manager - P&A
Zuari Cement Ltd.
An Italcementi Group.
A company employing 10 or more employees has to pay gratuity to its employees upon separation from the company, provided they complete continuous service of 5 years (one year's service in the case of death). Since you have completed 5 years of service, you can apply for the payment of gratuity in Form I to your employer under the Payment of Gratuity Act. If your company does not pay the gratuity, you can approach the Labour department. The concerned Assistant Commissioner of Labour is the controlling authority under the Act.
D. Phani Kumar
Sr. Manager - P&A
Zuari Cement Ltd.
An Italcementi Group.
Dear Mr. Madhu,
Thank you for your reply and the form.
One more thing I want to share is that my husband has been working there since August 2000 without any offer or appointment letter. Can we go ahead and claim gratuity?
We only have one promotion letter from 2008 and some address proofs on the company's letterhead.
I am hereby describing below his experience with the company:
Organization: XYZ (I) PVT LTD
Duration: From August 2000 to Till Date
Designation & Job Responsibilities: As Follows
Manager Operations - From April 2007 to till date in Mumbai Branch Office.
Field Officer – From 2006 to 2007 in Bangalore Branch Office
Field Officer – From 2005 to 2006 in Kolkata Branch Office
Field Officer – From 2004 to 2005 in Mumbai Branch Office
Sr. Plumber – From 2002 to 2004 in Mumbai Branch Office at Site – Proctor & Gamble, Andheri.
Plumber – From 2001 to 2002 in Delhi Head Office at Site – Polyplex, Noida.
Plumber – from 2000 to 2001 in Delhi Head Office at Site – Apollo Tyres, Gurgaon.
Awaiting senior's reply.
From India, Mumbai
Thank you for your reply and the form.
One more thing I want to share is that my husband has been working there since August 2000 without any offer or appointment letter. Can we go ahead and claim gratuity?
We only have one promotion letter from 2008 and some address proofs on the company's letterhead.
I am hereby describing below his experience with the company:
Organization: XYZ (I) PVT LTD
Duration: From August 2000 to Till Date
Designation & Job Responsibilities: As Follows
Manager Operations - From April 2007 to till date in Mumbai Branch Office.
Field Officer – From 2006 to 2007 in Bangalore Branch Office
Field Officer – From 2005 to 2006 in Kolkata Branch Office
Field Officer – From 2004 to 2005 in Mumbai Branch Office
Sr. Plumber – From 2002 to 2004 in Mumbai Branch Office at Site – Proctor & Gamble, Andheri.
Plumber – From 2001 to 2002 in Delhi Head Office at Site – Polyplex, Noida.
Plumber – from 2000 to 2001 in Delhi Head Office at Site – Apollo Tyres, Gurgaon.
Awaiting senior's reply.
From India, Mumbai
Dear Yaasmin,
Before giving you any suggestion, we need to know the employment conditions of your husband. If your husband has worked on a retainership basis, then the applicability of PF/ESI/Gratuity depends on the terms mentioned in the employment contract and it's not obligatory on the part of the employer. If your husband has worked as a regular employee, then the applicability of PF/ESI/Gratuity is a must; otherwise, it depends on the terms mentioned in the employment contract.
Regards,
From India, Pune
Before giving you any suggestion, we need to know the employment conditions of your husband. If your husband has worked on a retainership basis, then the applicability of PF/ESI/Gratuity depends on the terms mentioned in the employment contract and it's not obligatory on the part of the employer. If your husband has worked as a regular employee, then the applicability of PF/ESI/Gratuity is a must; otherwise, it depends on the terms mentioned in the employment contract.
Regards,
From India, Pune
Dear Jayakeerthi As informed by Madhu Please proceed. You have to get the gratuity. With warm regards S. Bhaskar 9099024667
From India, Kumbakonam
From India, Kumbakonam
He has worked on a regular basis, not on retainer-ship. It is a lala-type company; the employees are paid in cash and with a signature on any wage register, or sometimes no wage register is provided, and no payslip has been provided to date.
From India, Mumbai
From India, Mumbai
He havent had any pay slip or any other proof. The just paid cash to evry employee with no deductions at all, from 2008 they introduced paying by cheque then from 2009 transferring to bank account.
From India, Mumbai
From India, Mumbai
Yasmin,
The matter is a little complicated because if you go for legal options, then the onus lies with the employee to prove that he worked as a regular employee. As you guys have no document (employment contract) to prove that, the task becomes more tough.
Suppose on paper (for audit purposes) the employer has shown your husband as a consultant/professional (retainership), then deduction of TDS (10%) is a must, and the employer is bound to give Form 16A at the end of the financial year. If there is no deduction of TDS, then again, it's an offense on the part of the employer.
It seems the employer is wrong on all fronts. Ask your husband to write a letter (with registered post) to the owner of the company with details of the statutory obligations of the employers and his eligibility for the same. Wait for the reply for around 15 days and then consult with us.
Regards
From India, Pune
The matter is a little complicated because if you go for legal options, then the onus lies with the employee to prove that he worked as a regular employee. As you guys have no document (employment contract) to prove that, the task becomes more tough.
Suppose on paper (for audit purposes) the employer has shown your husband as a consultant/professional (retainership), then deduction of TDS (10%) is a must, and the employer is bound to give Form 16A at the end of the financial year. If there is no deduction of TDS, then again, it's an offense on the part of the employer.
It seems the employer is wrong on all fronts. Ask your husband to write a letter (with registered post) to the owner of the company with details of the statutory obligations of the employers and his eligibility for the same. Wait for the reply for around 15 days and then consult with us.
Regards
From India, Pune
Dear Mr. Kamal,
Thank you for the suggestion. I will proceed as per your recommendations first and then consider Mr. Madhu's suggestions. By this Sunday, I will gather all the necessary documents, including the company documents and employment-related documents (provided I am able to obtain the ID card). I will return on Monday with the scanned copies attached.
I have some documents that confirm his employment, and I will have the scanned copies ready by Monday for you.
Thank you.
From India, Mumbai
Thank you for the suggestion. I will proceed as per your recommendations first and then consider Mr. Madhu's suggestions. By this Sunday, I will gather all the necessary documents, including the company documents and employment-related documents (provided I am able to obtain the ID card). I will return on Monday with the scanned copies attached.
I have some documents that confirm his employment, and I will have the scanned copies ready by Monday for you.
Thank you.
From India, Mumbai
I want to clarify one more thing. Will the experience letter stating the period of work as mentioned and signed by the authority in the Mumbai office work as proof of employment? Also, the proof for the last drawn salary is the bank statement of the last two years.
From India, Mumbai
From India, Mumbai
Dear Friends,
It has been indicated to me by a consultant that if an employer issues a salary compensation letter without providing any details of gratuity, then the employer is not obligated to pay any gratuity to an employee who leaves after completing 5 years.
Please confirm if this information is accurate.
Thank you.
From India, Mumbai
It has been indicated to me by a consultant that if an employer issues a salary compensation letter without providing any details of gratuity, then the employer is not obligated to pay any gratuity to an employee who leaves after completing 5 years.
Please confirm if this information is accurate.
Thank you.
From India, Mumbai
Yasmin,
An experience letter can be a supportive document for your claim, but employment conditions are not typically mentioned in the experience letter. The experience letter will certainly prove that the concerned person has worked with the said employer.
From India, Pune
An experience letter can be a supportive document for your claim, but employment conditions are not typically mentioned in the experience letter. The experience letter will certainly prove that the concerned person has worked with the said employer.
From India, Pune
Dear Smita,
Mentioning or not mentioning gratuity details in the compensation letter does not curb your claim to gratuity if you are working as a regular employee. It's a statutory obligation of the employer. Recently, the definition of employees has been amended, and the new definition of an employee is very wide, covering almost all types of employment with the employer.
The amended definition of an employee is as follows: "employee" means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop, or other establishment, to which this Act applies. However, it does not include any person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for the payment of gratuity.
Thank you.
From India, Pune
Mentioning or not mentioning gratuity details in the compensation letter does not curb your claim to gratuity if you are working as a regular employee. It's a statutory obligation of the employer. Recently, the definition of employees has been amended, and the new definition of an employee is very wide, covering almost all types of employment with the employer.
The amended definition of an employee is as follows: "employee" means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop, or other establishment, to which this Act applies. However, it does not include any person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for the payment of gratuity.
Thank you.
From India, Pune
Hi everyone.
I'm not sure how I got sucked into this website, but I really enjoy reading your HR issues. I am from the United States - born and raised here. I would like to tell you a little bit about how things are done here in regards to this discussion since the company is a US firm.
In the USA, we are not bound by law to provide nor receive any type of compensation when we leave a company no matter how large or small. This might be the mindset of the company in the discussion - they might not understand your country's laws, and if this is the case, this US company would feel insulted by the employee asking for gratuity. Sometimes the US company will provide "severance" pay, but they are not required to. It's just something nice they do so they can get you out of there without issues. The main reason to give a US employee severance pay is so the former employee will sign a document stating that they will not sue the company at a later date for any reason. After they sign the letter, they get a severance check. Again, not a government mandate. I believe you guys are really lucky that you have that law in place - you should feel fortunate.
Regards,
Tina
From United States, Creedmoor
I'm not sure how I got sucked into this website, but I really enjoy reading your HR issues. I am from the United States - born and raised here. I would like to tell you a little bit about how things are done here in regards to this discussion since the company is a US firm.
In the USA, we are not bound by law to provide nor receive any type of compensation when we leave a company no matter how large or small. This might be the mindset of the company in the discussion - they might not understand your country's laws, and if this is the case, this US company would feel insulted by the employee asking for gratuity. Sometimes the US company will provide "severance" pay, but they are not required to. It's just something nice they do so they can get you out of there without issues. The main reason to give a US employee severance pay is so the former employee will sign a document stating that they will not sue the company at a later date for any reason. After they sign the letter, they get a severance check. Again, not a government mandate. I believe you guys are really lucky that you have that law in place - you should feel fortunate.
Regards,
Tina
From United States, Creedmoor
To prove the employer-employee relationship, there is no need for an appointment letter. A signature in the muster roll or wage register, or even a witness to produce before the authority, is sufficient. Since it is the obligation of the employer, and not the employee, to maintain wage registers, muster rolls, and other relevant registers and issue wage slips as per the Payment of Wages Act, Minimum Wages Act, Payment of Gratuity Act, etc., the question of the employee proving the employer-employee relationship does not arise. Similarly, unless otherwise contracted, all persons working for the establishment are considered only as employees, and thus the question of giving him a designation of "consultant" does not arise. In the absence of such an agreement, he is considered an employee only.
The roles he has been performing have no relevance in gratuity payment. What matters are the last salary drawn and the length of service that are taken into account. Therefore, you can proceed with claiming gratuity from your end.
Regards,
Madhu.T.K
From India, Kannur
The roles he has been performing have no relevance in gratuity payment. What matters are the last salary drawn and the length of service that are taken into account. Therefore, you can proceed with claiming gratuity from your end.
Regards,
Madhu.T.K
From India, Kannur
Dear Tina,
Welcome to CiteHR.com!
Thanks for sharing the HR practices in US companies. It also helps in understanding the stance adopted by the company in question. However, I must clarify for your information (and others') that irrespective of the original incorporation or "nationality" of a company, its operations in another country are regulated by the Company Laws prevalent in the host country. This being the situation, the companies need to amend their "practices" accordingly while operating in other countries.
Do keep visiting CiteHR.com - one of the largest live networks of HR professionals - and share your knowledge, learnings, and views.
Warm regards.
From India, Delhi
Welcome to CiteHR.com!
Thanks for sharing the HR practices in US companies. It also helps in understanding the stance adopted by the company in question. However, I must clarify for your information (and others') that irrespective of the original incorporation or "nationality" of a company, its operations in another country are regulated by the Company Laws prevalent in the host country. This being the situation, the companies need to amend their "practices" accordingly while operating in other countries.
Do keep visiting CiteHR.com - one of the largest live networks of HR professionals - and share your knowledge, learnings, and views.
Warm regards.
From India, Delhi
I have a similar problem.
I had worked for 9 years and 6 months in an autonomous body under the Ministry of Industries, Government of India. They did not pay me gratuity upon my resignation, stating that it is not applicable in Government service if an employee resigns. However, this organization will pay gratuity after 10 years of service.
I wrote to the Assistant Labour Commissioner (Central), Ahmedabad (where I was last posted) but have not received any reply.
Kindly let me know what can be done.
From India, Mumbai
I had worked for 9 years and 6 months in an autonomous body under the Ministry of Industries, Government of India. They did not pay me gratuity upon my resignation, stating that it is not applicable in Government service if an employee resigns. However, this organization will pay gratuity after 10 years of service.
I wrote to the Assistant Labour Commissioner (Central), Ahmedabad (where I was last posted) but have not received any reply.
Kindly let me know what can be done.
From India, Mumbai
Dear All,
Thank you for the information. However, the last thing I learned about gratuity was that it is a payment through which an employer shows gratitude towards their employee for working for a long period with the company. Even though the law exists, the employer may not be bound by it. In fact, this was explained to us by a law practitioner. So, in the case of Yasmin, how will this take effect?
Please let me know.
Thanks & Regards,
Anuja
From India, Mumbai
Thank you for the information. However, the last thing I learned about gratuity was that it is a payment through which an employer shows gratitude towards their employee for working for a long period with the company. Even though the law exists, the employer may not be bound by it. In fact, this was explained to us by a law practitioner. So, in the case of Yasmin, how will this take effect?
Please let me know.
Thanks & Regards,
Anuja
From India, Mumbai
Dear Yasmin,
It is mandatory for an employer to pay gratuity whether the company is in loss or profit. You need not worry. Just show one thing that proves your husband was a permanent employee. You can demonstrate this by providing an offer letter, salary slip, promotion letter, any letter showing experience, or through employees of that company. Simply make a written complaint and send it to the DLC. If the DLC does not take any action, then escalate it to the LABOUR COMMISSIONER. He or she will assist you. You need to be bold to teach the employer a lesson.
From India, Delhi
It is mandatory for an employer to pay gratuity whether the company is in loss or profit. You need not worry. Just show one thing that proves your husband was a permanent employee. You can demonstrate this by providing an offer letter, salary slip, promotion letter, any letter showing experience, or through employees of that company. Simply make a written complaint and send it to the DLC. If the DLC does not take any action, then escalate it to the LABOUR COMMISSIONER. He or she will assist you. You need to be bold to teach the employer a lesson.
From India, Delhi
Dear Anuja,
Are you an HR professional? Or are you working in some other functional areas?
Kindly check up with the labor laws and statutes before giving such "expert" advice, as it amounts to misguiding the person.
I wonder what "your law practitioner" will answer if asked whether a bonus is payable if the company makes a loss.
For your information, gratuity was initially given as a "reward" or a "gratuitous" payment for long dedicated service. Similarly, "bonus" in Latin means "something extra" and was given as an additional payment during festivals and when the company made profits.
Since then, a lot has changed. Since 1972 and 1965 respectively, the payment of gratuity and bonus is no longer voluntary but compulsory.
So, it's not as you say "although the law exists, the employer may not be bound by it," but it has to be paid compulsorily if an employee is eligible for it.
Also, please comply with labor laws. If you are an HR person, you must know that compliance is an important function of HRM. It would also be better for your company if you dispense with the services of your "labor practitioner" and find someone more competent.
Warm regards.
.
From India, Delhi
Are you an HR professional? Or are you working in some other functional areas?
Kindly check up with the labor laws and statutes before giving such "expert" advice, as it amounts to misguiding the person.
I wonder what "your law practitioner" will answer if asked whether a bonus is payable if the company makes a loss.
For your information, gratuity was initially given as a "reward" or a "gratuitous" payment for long dedicated service. Similarly, "bonus" in Latin means "something extra" and was given as an additional payment during festivals and when the company made profits.
Since then, a lot has changed. Since 1972 and 1965 respectively, the payment of gratuity and bonus is no longer voluntary but compulsory.
So, it's not as you say "although the law exists, the employer may not be bound by it," but it has to be paid compulsorily if an employee is eligible for it.
Also, please comply with labor laws. If you are an HR person, you must know that compliance is an important function of HRM. It would also be better for your company if you dispense with the services of your "labor practitioner" and find someone more competent.
Warm regards.
.
From India, Delhi
Dear All,
Law is a convenience store which can be used on a need-based. Gratuity is a legal act which the company has to follow and can be prosecuted if violated. So, companies that do not follow the basic law need to be warned and informed to fulfill their obligations.
Regards,
Shridhar
From India, Mumbai
Law is a convenience store which can be used on a need-based. Gratuity is a legal act which the company has to follow and can be prosecuted if violated. So, companies that do not follow the basic law need to be warned and informed to fulfill their obligations.
Regards,
Shridhar
From India, Mumbai
Dear Mr. Madhu.T.K,
My input was case specific (Yaasmin's husband) and your input was a general one. My input was keeping in view the fact if the employer is doing mischief to such an extent that for 5-6 years they were paying salary in case without fulfilling any statutory obligations , such employer must be doing his ground work on paper in his favor so that he may not be in trouble in future.
Secondly, in this particular case the employee was not conscious enough to ask the employer regarding his eligibility for getting employment contract, salary slips, pf/esic deductions etc. The employee was accepting salary in cash for 5-6 years without having any employment proof for himself.
Whatever you have mentioned regarding employer's responsibility to maintain wage register, attendance register, salary slips etc is applicable (strictly) in case of a regular employees and not in case of consultants. Consultants having field jobs may or may not require to sign the attendance register, may or may not get salary slips.
Your input “a witness to produce before the authority is sufficient to prove employer employee relationship” may be correct in a particular but not in all cases. Producing a witness is not enough to prove any case in the court of law.
In Coimbatore Cement Worker’s Union V. Managemenr of ACC Ltd. & Ors. LLN (3) 2010 P. 505, the Madras high court has ruled that documentary evidence of an employee to prove his status as a workman lies with the employee and just a company i-card is not enough to prove the employer-employee relationship (workman).
Even apex court has few ruling where the court has doubted the clean hands of the employee and questioned why the employee was silent for so many years.
Your input “The roles he has been performing has no relevance in gratuity payment. It is the last salary drawn and the length of service that are taken into account and therefore, you can certainly proceed with claiming of gratuity from your end” is correct but the type of employment has all relevance in deciding the gratuity payment.
I would appreciate your further input.
Regards,
From India, Pune
My input was case specific (Yaasmin's husband) and your input was a general one. My input was keeping in view the fact if the employer is doing mischief to such an extent that for 5-6 years they were paying salary in case without fulfilling any statutory obligations , such employer must be doing his ground work on paper in his favor so that he may not be in trouble in future.
Secondly, in this particular case the employee was not conscious enough to ask the employer regarding his eligibility for getting employment contract, salary slips, pf/esic deductions etc. The employee was accepting salary in cash for 5-6 years without having any employment proof for himself.
Whatever you have mentioned regarding employer's responsibility to maintain wage register, attendance register, salary slips etc is applicable (strictly) in case of a regular employees and not in case of consultants. Consultants having field jobs may or may not require to sign the attendance register, may or may not get salary slips.
Your input “a witness to produce before the authority is sufficient to prove employer employee relationship” may be correct in a particular but not in all cases. Producing a witness is not enough to prove any case in the court of law.
In Coimbatore Cement Worker’s Union V. Managemenr of ACC Ltd. & Ors. LLN (3) 2010 P. 505, the Madras high court has ruled that documentary evidence of an employee to prove his status as a workman lies with the employee and just a company i-card is not enough to prove the employer-employee relationship (workman).
Even apex court has few ruling where the court has doubted the clean hands of the employee and questioned why the employee was silent for so many years.
Your input “The roles he has been performing has no relevance in gratuity payment. It is the last salary drawn and the length of service that are taken into account and therefore, you can certainly proceed with claiming of gratuity from your end” is correct but the type of employment has all relevance in deciding the gratuity payment.
I would appreciate your further input.
Regards,
From India, Pune
I have not gone through the complete text of the case, Coimbatore Cement Workers Union Vs. ACC Cements Ltd. I hope it is not the same National Cement Workers Union Vs. Government of Tamil Nadu in which the third respondent was ACC Ltd, Coimbatore, and the pertinent case was relating to exemption from ESI schemes. Anyway, I understand that the onus to prove employee-employer relationship lies on the employee. At the same time, I believe that to establish an employee-employer relationship, the commission of inquiry will take into consideration the nature of work, length of service, and remuneration paid to a person by whatever name he is referred to and by whatever mode the remuneration is paid. In that circumstance, I believe that the employee would get the protection offered by law.
Regards, Madhu.T.K
From India, Kannur
Regards, Madhu.T.K
From India, Kannur
Dear Mr. Madhu T K,
Following are the details of the discussed case for your reference:
Coimbatore Cement Workers Union v. Management of ACC Ltd. & Ors. LLN (3) 2010P. 505
According to the petitioner (workers' union and individual worker), he was serving as a room boy in the offices of Coimbatore Cement Ltd and ACC Ltd., and he was paid a monthly salary of Rs. 1900. He was issued an identity card at the time of his entry into service. The petitioner claimed that the employers had promised to regularize his service.
The petitioner claimed that his service was permanent in nature, but the employer orally terminated his job without complying with the provisions of Section 25-F of the ID Act. The petitioner raised an industrial dispute regarding his alleged illegal termination.
The Conciliation Authority submitted a failure report to the government. It was submitted on behalf of the government that the petitioner failed to produce any documentary evidence to show that he worked as a workman. Hence, the government was justified in declining to make a reference.
In the instant case, there is documentary evidence to show that the petitioner was appointed as a room boy and was paid a monthly salary of Rs. 1900. The document called 'entry pass' cannot give the petitioner the status of a workman. It was held that unless the petitioner proves his status as a workman, the appropriate government cannot, for the sake of asking, refer the case for adjudication. Therefore, no interference is called for in the award, and the petition is dismissed.
Regards
From India, Pune
Following are the details of the discussed case for your reference:
Coimbatore Cement Workers Union v. Management of ACC Ltd. & Ors. LLN (3) 2010P. 505
According to the petitioner (workers' union and individual worker), he was serving as a room boy in the offices of Coimbatore Cement Ltd and ACC Ltd., and he was paid a monthly salary of Rs. 1900. He was issued an identity card at the time of his entry into service. The petitioner claimed that the employers had promised to regularize his service.
The petitioner claimed that his service was permanent in nature, but the employer orally terminated his job without complying with the provisions of Section 25-F of the ID Act. The petitioner raised an industrial dispute regarding his alleged illegal termination.
The Conciliation Authority submitted a failure report to the government. It was submitted on behalf of the government that the petitioner failed to produce any documentary evidence to show that he worked as a workman. Hence, the government was justified in declining to make a reference.
In the instant case, there is documentary evidence to show that the petitioner was appointed as a room boy and was paid a monthly salary of Rs. 1900. The document called 'entry pass' cannot give the petitioner the status of a workman. It was held that unless the petitioner proves his status as a workman, the appropriate government cannot, for the sake of asking, refer the case for adjudication. Therefore, no interference is called for in the award, and the petition is dismissed.
Regards
From India, Pune
I want to thank Malik and Madhu for their contributions. I'm on leave as of now and will take up the issue with the finance department when I rejoin work. Thanks again for now, and I will keep everybody updated about how things turn out.
From India, Bangalore
From India, Bangalore
Dear Friends & Seniors,
Thanks for all the coordinations. I have managed to obtain the acceptance of resignation, relieving letter, and experience certificate from the company. The resignation, relieving, and experience letters mention his employment dates, last designation, and all designations, etc. They are on the letterhead and signed and stamped by the administrative executive of the company. Prior approval mail is available with me from the MD to obtain from the available administrative executive.
So, shall I proceed to claim gratuity? Are there any documents that I need to attach along with the gratuity Form "I" provided by Mr. Madhu?
I really thank all the members from the bottom of my heart for helping and guiding me through all the knowledge and processes.
From India, Mumbai
Thanks for all the coordinations. I have managed to obtain the acceptance of resignation, relieving letter, and experience certificate from the company. The resignation, relieving, and experience letters mention his employment dates, last designation, and all designations, etc. They are on the letterhead and signed and stamped by the administrative executive of the company. Prior approval mail is available with me from the MD to obtain from the available administrative executive.
So, shall I proceed to claim gratuity? Are there any documents that I need to attach along with the gratuity Form "I" provided by Mr. Madhu?
I really thank all the members from the bottom of my heart for helping and guiding me through all the knowledge and processes.
From India, Mumbai
Great Yaasmin....now you can proceed with the claim of Gratuity. I always suggest people to first make their documentation strong and then make your claim with the employer. regards, Kamal
From India, Pune
From India, Pune
Hello Mr. Sinha,
I would like to thank you for updating me on my query. Also, I would like to thank you, Mr. Madhu T.K., and Mr. Raj Kumar for putting your valuable inputs in making everyone aware of the actual facts about Gratuity.
Here, once again, I am in need of certain details about gratuity. It would be great if someone could assist me in gathering the information.
We started our organization in February 2006, and we are currently operating with a staff of 70 to 80 employees. Now, I feel that we need to take a step towards implementing the gratuity policy in our organization.
I would appreciate detailed information from all of you on implementing this policy in my organization. Please guide me through all the necessary steps and actions that I need to take to comply with the gratuity policy.
Thanks once again to everybody for your cooperation.
Smita
From India, Mumbai
I would like to thank you for updating me on my query. Also, I would like to thank you, Mr. Madhu T.K., and Mr. Raj Kumar for putting your valuable inputs in making everyone aware of the actual facts about Gratuity.
Here, once again, I am in need of certain details about gratuity. It would be great if someone could assist me in gathering the information.
We started our organization in February 2006, and we are currently operating with a staff of 70 to 80 employees. Now, I feel that we need to take a step towards implementing the gratuity policy in our organization.
I would appreciate detailed information from all of you on implementing this policy in my organization. Please guide me through all the necessary steps and actions that I need to take to comply with the gratuity policy.
Thanks once again to everybody for your cooperation.
Smita
From India, Mumbai
I don't think that you may require any more updates about gratuity since your establishment is covered by the Payment of Gratuity Act. You have to follow the provisions of the said Act.
Accordingly, you have to collect nominations from all employees who have completed at least one year of service in Form F and file it with you (no need to send it to any department).
Whenever an employee leaves, calculate and pay the gratuity. Gratuity will be an amount equal to 15 days' pay for every completed year of service. Any fraction of a year more than six months shall be taken as one year, and less than six months shall be ignored. The maximum gratuity payable as per the Act is Rs 10 lakhs. The average rate of wages is calculated by dividing the last drawn monthly salary (Basic and Dearness allowance) by 26.
When an employee leaves, collect a gratuity claim application form (Form I) and pay the amount within 30 days. Remember, the payment of gratuity within 30 days is a legal obligation of the employer. Therefore, if the former employee is not traceable, the employer should deposit the amount with the appropriate authority under the Act (Labour Deptt) within that period (30 days). Before that, send a letter in Form L calling on the employee to come and collect the amount on a specified date. This will absolve the employer's liability. Otherwise, they have to pay interest.
Regards,
Madhu.T.K
From India, Kannur
Accordingly, you have to collect nominations from all employees who have completed at least one year of service in Form F and file it with you (no need to send it to any department).
Whenever an employee leaves, calculate and pay the gratuity. Gratuity will be an amount equal to 15 days' pay for every completed year of service. Any fraction of a year more than six months shall be taken as one year, and less than six months shall be ignored. The maximum gratuity payable as per the Act is Rs 10 lakhs. The average rate of wages is calculated by dividing the last drawn monthly salary (Basic and Dearness allowance) by 26.
When an employee leaves, collect a gratuity claim application form (Form I) and pay the amount within 30 days. Remember, the payment of gratuity within 30 days is a legal obligation of the employer. Therefore, if the former employee is not traceable, the employer should deposit the amount with the appropriate authority under the Act (Labour Deptt) within that period (30 days). Before that, send a letter in Form L calling on the employee to come and collect the amount on a specified date. This will absolve the employer's liability. Otherwise, they have to pay interest.
Regards,
Madhu.T.K
From India, Kannur
Dear Mr. Madhu,
One more query. I have been offered a supervisory position at a reputable hospital in Mumbai. My CTC is 18,000 per month, out of which 14,000 would be cash in hand. From this amount, 4,000 will be deducted for PF (both sides), LTA, and Gratuity.
I am concerned about the deduction of gratuity from my salary by the company. If I were to leave the organization before completing five years, what would happen to the gratuity amount that has been deducted from my payment?
For your information, I have not yet signed the offer.
From India, Mumbai
One more query. I have been offered a supervisory position at a reputable hospital in Mumbai. My CTC is 18,000 per month, out of which 14,000 would be cash in hand. From this amount, 4,000 will be deducted for PF (both sides), LTA, and Gratuity.
I am concerned about the deduction of gratuity from my salary by the company. If I were to leave the organization before completing five years, what would happen to the gratuity amount that has been deducted from my payment?
For your information, I have not yet signed the offer.
From India, Mumbai
Thank you for the updates, Mr. Madhu. But I would like to tell you we have not covered our establishment in the payment of gratuity as yet. We are not showing any gratuity in CTC letters, nor are we making any provision for this in our balance sheet. I am planning to implement this now onwards in my organization. So we are just in the start procedure, and I want to know how we can go about this.
A lot of questions I have, like do I need to register under any gratuity act, do I need to reflect the same in the balance sheet, do I need to inform ROC, do I need to implement all this in the company policy manual, etc...
From India, Mumbai
A lot of questions I have, like do I need to register under any gratuity act, do I need to reflect the same in the balance sheet, do I need to inform ROC, do I need to implement all this in the company policy manual, etc...
From India, Mumbai
Dear Smita,
To start with (step-wise):
1. Your organization should obtain insurance for its liability towards the payment of gratuity under the Payment of Gratuity Act from LIC or any other insurance company.
2. Alternatively, your organization can establish its own approved gratuity fund for its liability towards the payment of gratuity.
3. A notice in Form A (regarding the implementation of the Act) should be submitted by your organization to the controlling authority of your area.
4. Nomination of all covered employees in Form F should be submitted to the controlling authority.
Yes, the paid contribution amount towards the gratuity fund and fund value should reflect in the balance sheet. There is no need to inform the ROC.
Regards,
Kamal
From India, Pune
To start with (step-wise):
1. Your organization should obtain insurance for its liability towards the payment of gratuity under the Payment of Gratuity Act from LIC or any other insurance company.
2. Alternatively, your organization can establish its own approved gratuity fund for its liability towards the payment of gratuity.
3. A notice in Form A (regarding the implementation of the Act) should be submitted by your organization to the controlling authority of your area.
4. Nomination of all covered employees in Form F should be submitted to the controlling authority.
Yes, the paid contribution amount towards the gratuity fund and fund value should reflect in the balance sheet. There is no need to inform the ROC.
Regards,
Kamal
From India, Pune
Dear Yasmin,
As you have mentioned, 18K is your CTC and not your monthly gross salary. Therefore, showing gratuity contribution as one of the CTC components is not a deduction from your salary. CTC is what the company is spending on you. There is nothing wrong if PF contribution, LTA, Gratuity contribution, etc., are mentioned as components of CTC.
Regards,
Kamal
From India, Pune
As you have mentioned, 18K is your CTC and not your monthly gross salary. Therefore, showing gratuity contribution as one of the CTC components is not a deduction from your salary. CTC is what the company is spending on you. There is nothing wrong if PF contribution, LTA, Gratuity contribution, etc., are mentioned as components of CTC.
Regards,
Kamal
From India, Pune
Dear Kamal,
The gratuity is the employer showing gratitude towards the employee for his dedication to long-term service. If I leave the job in 1 year, then what? Will the company not give me my own money?
From India, Mumbai
The gratuity is the employer showing gratitude towards the employee for his dedication to long-term service. If I leave the job in 1 year, then what? Will the company not give me my own money?
From India, Mumbai
Your apprehensions are genuine. Gratuity is not a part of salary since it is payable only when an employee leaves. The amount of gratuity will depend on the salary the employee will earn at the time of his leaving. Whereas the date of leaving is not known in advance, how would you calculate gratuity right at the time of joining? How can you say that X amount would be gratuity and that would be the cost to the company? If the entire costs to be incurred by nature of an employment should be included in the Cost to Company (CTC), then it is better to add the electricity costs (because an employee must be using fans or AC), paper and stationery costs, depreciation of chairs, etc., to CTC, forgetting the work done or rather the benefits which the company gets out of his employment.
Read the following also: [Madhu.T.K: CTC Vs BTC](http://madhu-t-k.blogspot.com/2010/02/ctc-vs-btc.html)
From India, Kannur
Read the following also: [Madhu.T.K: CTC Vs BTC](http://madhu-t-k.blogspot.com/2010/02/ctc-vs-btc.html)
From India, Kannur
Dear Mr. Madhu,
Thank you for your input. This is the matter I wanted to clarify: I will try to help them understand what gratuity stands for. How can they predict the future?
I am not willing to leave the job early, but in case, due to some unavoidable reason, it can happen to anyone. Then, they may withhold the gratuity amount, stating that you are not eligible for it.
From India, Mumbai
Thank you for your input. This is the matter I wanted to clarify: I will try to help them understand what gratuity stands for. How can they predict the future?
I am not willing to leave the job early, but in case, due to some unavoidable reason, it can happen to anyone. Then, they may withhold the gratuity amount, stating that you are not eligible for it.
From India, Mumbai
DEAR SIR; An employee sunddly quit from our company wilingly.He get any claim(like gratuity, pf etc)
From India, Calcutta
From India, Calcutta
Hey Kamal,
Thank you for the updates. I will take care of all the areas that you have mentioned to implement gratuity. It feels great to know all these things in advance before making any decisions. I would also like to thank Mr. Madhu T.K. for making me aware of the next steps.
Warm regards,
Smita
From India, Mumbai
Thank you for the updates. I will take care of all the areas that you have mentioned to implement gratuity. It feels great to know all these things in advance before making any decisions. I would also like to thank Mr. Madhu T.K. for making me aware of the next steps.
Warm regards,
Smita
From India, Mumbai
Dear Yasmin,
What I feel is a company cannot be a fool to mention a gratuity payment (for which you will be eligible when you leave the company - the future amount) in your CTC. What they must have mentioned is gratuity contribution, which is 15 days' salary (basic + DA) that an employer contributes every year to the gratuity fund towards its liability for the payment of gratuity to its employees.
You can easily calculate your 15 days' fixed salary and the gratuity amount they have mentioned in your offer letter. It should not be more than your 15 days' (basic + DA) salary.
Gratuity contribution cannot be deducted from an employee's salary. It is the employer's liability, and there is nothing wrong either legally or ethically if the employer is considering it as a part of your CTC.
Regards,
Kamal
Comparing something for which an employee is a direct beneficiary with electricity costs, paper/stationery costs, depreciation of chairs, etc. (which come under the administrative expenses of the organization) is somewhat a derailment of the discussion from its point.
I don't understand how mentioning gratuity contribution as a part of CTC will undermine an employee's dedication and loyalty towards their employer.
From India, Pune
What I feel is a company cannot be a fool to mention a gratuity payment (for which you will be eligible when you leave the company - the future amount) in your CTC. What they must have mentioned is gratuity contribution, which is 15 days' salary (basic + DA) that an employer contributes every year to the gratuity fund towards its liability for the payment of gratuity to its employees.
You can easily calculate your 15 days' fixed salary and the gratuity amount they have mentioned in your offer letter. It should not be more than your 15 days' (basic + DA) salary.
Gratuity contribution cannot be deducted from an employee's salary. It is the employer's liability, and there is nothing wrong either legally or ethically if the employer is considering it as a part of your CTC.
Regards,
Kamal
Comparing something for which an employee is a direct beneficiary with electricity costs, paper/stationery costs, depreciation of chairs, etc. (which come under the administrative expenses of the organization) is somewhat a derailment of the discussion from its point.
I don't understand how mentioning gratuity contribution as a part of CTC will undermine an employee's dedication and loyalty towards their employer.
From India, Pune
Mr. Kamal,
Mr. Madhu has easily and exactly expressed what an employee feels. How do you know if an employee is going to work for your organization for more than 5 years? If he leaves the job because of some reason, then you will not pay the amount deducted against gratuity. Gratuity is the employer's gratitude towards an employee's long-term service, so how can an employer start showing his gratitude towards an employee from the first month?
This type of employer is making gratuity a component of salary and diminishing its actual value.
From India, Mumbai
Mr. Madhu has easily and exactly expressed what an employee feels. How do you know if an employee is going to work for your organization for more than 5 years? If he leaves the job because of some reason, then you will not pay the amount deducted against gratuity. Gratuity is the employer's gratitude towards an employee's long-term service, so how can an employer start showing his gratitude towards an employee from the first month?
This type of employer is making gratuity a component of salary and diminishing its actual value.
From India, Mumbai
When we discuss CTC/salary, we need to understand the difference between deduction and contribution. Deduction is incorrect, whereas contribution cannot be termed as wrong. Making gratuity a salary component is unfortunate. Gratuity is not only the employer's gratitude (at will) towards its employees—it is also a statutory obligation of the employer.
From India, Pune
From India, Pune
Hi Madhu,
I was working in an organization for more than 5 years. After resignation, the company did not pay me the gratuity amount, stating that it is not doing well. I have submitted Form I, and I even have acknowledgment for that. I have filed a case in the labor office, and already 3 hearings have been completed. In every hearing, the opponent's advocate will ask for time, and the hearing will be postponed to the next date. How long will this continue, and will I receive my gratuity money? I have all supporting documents (joining letter, relieving letter, offer letter, salary slip).
From India, Bangalore
I was working in an organization for more than 5 years. After resignation, the company did not pay me the gratuity amount, stating that it is not doing well. I have submitted Form I, and I even have acknowledgment for that. I have filed a case in the labor office, and already 3 hearings have been completed. In every hearing, the opponent's advocate will ask for time, and the hearing will be postponed to the next date. How long will this continue, and will I receive my gratuity money? I have all supporting documents (joining letter, relieving letter, offer letter, salary slip).
From India, Bangalore
Dear Sir, i have worked a organization 5.6 years, i am eligible for gratuity, but company not paying over than last 7 months. please suggest
From India, Kakinada
From India, Kakinada
Dear Sir,
I worked in a company on third-party payroll from September 2009 to May 2015, and I completed my notice period. However, when I asked for my gratuity, they denied my eligibility, stating that being on third-party payroll excluded me from receiving gratuity. These conditions were not mentioned in the company agreement. Please advise.
Regards,
Banwari Yadav
From India, Delhi
I worked in a company on third-party payroll from September 2009 to May 2015, and I completed my notice period. However, when I asked for my gratuity, they denied my eligibility, stating that being on third-party payroll excluded me from receiving gratuity. These conditions were not mentioned in the company agreement. Please advise.
Regards,
Banwari Yadav
From India, Delhi
This is Salim. I resigned from LTD company 3 months ago. My total working experience spans 7 years. I asked HR for gratuity, but they informed me that it is not a company practice. Despite sending 3 follow-up emails to HR requesting for gratuity, I have not received any response.
I am considering submitting FORM-I. However, if they continue to disregard the form, what should be my next course of action?
Please advise.
Salim - Surat, Gujarat
9328028570
From India, undefined
I am considering submitting FORM-I. However, if they continue to disregard the form, what should be my next course of action?
Please advise.
Salim - Surat, Gujarat
9328028570
From India, undefined
"I have planned to send FORM-I. But if they ignore FORM-I, then what next?"
How many employees are there in the company?
If the company is legally bound to pay gratuity and does not pay, just approach your local labor officer and complain in writing. The company may not have a practice of paying gratuity, but they are legally bound to pay gratuity.
From India, Pune
How many employees are there in the company?
If the company is legally bound to pay gratuity and does not pay, just approach your local labor officer and complain in writing. The company may not have a practice of paying gratuity, but they are legally bound to pay gratuity.
From India, Pune
Hi, My name is Venkataramana Rao, and I am from Hyderabad.
I need information: am I eligible for Gratuity? I worked in a medium-scale product-based organization from 26th Sep 2011 to 30th June 2016 and maintained my PF account with the respective organization until 30th Oct 2016.
Please suggest to me, am I eligible for Gratuity? Also, let me know the steps to take if they fail to pay my Gratuity.
Thanks in Advance.
Regards, Venkat
From India, Bengaluru
I need information: am I eligible for Gratuity? I worked in a medium-scale product-based organization from 26th Sep 2011 to 30th June 2016 and maintained my PF account with the respective organization until 30th Oct 2016.
Please suggest to me, am I eligible for Gratuity? Also, let me know the steps to take if they fail to pay my Gratuity.
Thanks in Advance.
Regards, Venkat
From India, Bengaluru
Hello all,
This post seeks proper advice on my gratuity payment. I served a company for 6 years and 9 months. I quit the company upon acceptance of my resignation without serving the prescribed notice period, thereby not being properly relieved from service. In this case, am I eligible for the gratuity payment?
Regards,
Mohan
From India, Mumbai
This post seeks proper advice on my gratuity payment. I served a company for 6 years and 9 months. I quit the company upon acceptance of my resignation without serving the prescribed notice period, thereby not being properly relieved from service. In this case, am I eligible for the gratuity payment?
Regards,
Mohan
From India, Mumbai
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