Dear Sir, I worked in a private limited company from 2014 to 2020 for a period of 6 years in Delhi with the post of clerical staff/stenographer/back office coordinator. After leaving the service I got the gratuity of Rs. 108346 on the last monthly gross salary of Rs 31300/-. (31300/26) x 15 x 6.
But as per the rule, the gratuity is to be calculated on the basic salary or on the basis of the last pay drawn.
During the year 2018, my basic salary was Rs 28000/- + other components total to Rs 30000/-. But in the year 2019 the basic salary has been reduced to Rs 16000 with all other components totaling to Rs 31300/-.
Now the company is requesting for the refund of excess amount in gratuity as received by me with basic as Rs 16000/-.
I do understand that once the basic salary is fixed, it remains the same. or it can be reduced? If possible what are the guidelines? Is it different from Govt service or private service? Is there any notification or govt order to justify this point.
As per the discussion with some of my colleagues, I understand the basic salary of back-office/clerical staff / is Rs 19000/- per month and not 16000/-.
What is the possible solution or what amount to be returned.
VDS
From India, New Delhi
But as per the rule, the gratuity is to be calculated on the basic salary or on the basis of the last pay drawn.
During the year 2018, my basic salary was Rs 28000/- + other components total to Rs 30000/-. But in the year 2019 the basic salary has been reduced to Rs 16000 with all other components totaling to Rs 31300/-.
Now the company is requesting for the refund of excess amount in gratuity as received by me with basic as Rs 16000/-.
I do understand that once the basic salary is fixed, it remains the same. or it can be reduced? If possible what are the guidelines? Is it different from Govt service or private service? Is there any notification or govt order to justify this point.
As per the discussion with some of my colleagues, I understand the basic salary of back-office/clerical staff / is Rs 19000/- per month and not 16000/-.
What is the possible solution or what amount to be returned.
VDS
From India, New Delhi
You may reply to them inviting reference to the term "wages" as defined in Section 2 (s) of the Payment of Gratuity Act 1972, it reads as follows:
“wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable
to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
So, first of all, gratuity is not to be calculated on the basis of basic pay alone but includes DA too as well as any other emolument paid in cash. It specifically excludes bonus, commission, HRA, OT wages and other allowances.
Pl. factor in the amount of Rs. 31,300 you were receiving as monthly salary and see where you stand.
As regards the reduction of basic pay is concerned, it cannot be reduced except as a punishment. But that has not been the case. However, you accepted the total package looking to the gains in the process so you cannot now complain against it. There is a legal principle you cannot agree and disagree at the same time.
From India, Mumbai
1534“wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable
to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
So, first of all, gratuity is not to be calculated on the basis of basic pay alone but includes DA too as well as any other emolument paid in cash. It specifically excludes bonus, commission, HRA, OT wages and other allowances.
Pl. factor in the amount of Rs. 31,300 you were receiving as monthly salary and see where you stand.
As regards the reduction of basic pay is concerned, it cannot be reduced except as a punishment. But that has not been the case. However, you accepted the total package looking to the gains in the process so you cannot now complain against it. There is a legal principle you cannot agree and disagree at the same time.
From India, Mumbai
Sir, Kindly clarify the below point : But as per the rule the gratuity is to be worked on the last basic salary or on the basis of the last pay drawn. This makes the picture clear. VDS
From India, New Delhi
From India, New Delhi
Dear colleague,
The Gratuity Act has defined what " wages " mean for calculating gratuity already referred to by the learned colleague.
The Gratuity is to be calculated on the basis of 'last drawn wages' at the time of cessation of employment and not on basic wages alone.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
The Gratuity Act has defined what " wages " mean for calculating gratuity already referred to by the learned colleague.
The Gratuity is to be calculated on the basis of 'last drawn wages' at the time of cessation of employment and not on basic wages alone.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
In fact the right of the employee to get gratuity which is more than the statutory gratuity as is provided in the Payment of Gratuity Act 1972, is protected in the Act itself. Therefore, in my opinion, once the employer paid the gratuity on gross, it will tantamount to better terms for payment of gratuity and the employer is now estopped in law to ask the excess amount back from you.
S. K. Mittal
9319956443
From India, Faridabad
S. K. Mittal
9319956443
From India, Faridabad
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REQUEST FOR DEDUCTION OF GRATUITY AMOUNT (2).pdf
Security Amount Proof.docx