Hi all, I used to work for a company in India for 10 years and now I work for its UK subsidiary. Am I eligible for gratuity from the Indian HQ.
From United Kingdom, Surbiton
From United Kingdom, Surbiton
Dear Siddhartha-Kothari ji,
Since your service is more than 5 years, you are certainly entitled to payment of gratuity when you leave your service.
You said, after working for 10 years you are now working with UK subsidiary of your company. Is your service transferred from Indian company to UK subsidiary or your service account is settled at Indian company and you have been given fresh appointment letter with out uttering to your past service?
You need to check this. You need to talk to your management. Where is your place of work. Your profile shows you are at UK.
From India, Mumbai
183Since your service is more than 5 years, you are certainly entitled to payment of gratuity when you leave your service.
You said, after working for 10 years you are now working with UK subsidiary of your company. Is your service transferred from Indian company to UK subsidiary or your service account is settled at Indian company and you have been given fresh appointment letter with out uttering to your past service?
You need to check this. You need to talk to your management. Where is your place of work. Your profile shows you are at UK.
From India, Mumbai
Hi Siddhartha,
You also need to study your 'terms & conditions' of Indian posting and terms of settlement, if any, when you left India for UK(subsidiary) and answer to above queries raised by Mr.Akil. How about your EPF and other terminal benefits, if any separation took place.
From India, Bangalore
You also need to study your 'terms & conditions' of Indian posting and terms of settlement, if any, when you left India for UK(subsidiary) and answer to above queries raised by Mr.Akil. How about your EPF and other terminal benefits, if any separation took place.
From India, Bangalore
Gratuity is a gratuitous payment saying thank you for your services. Whether you have resigned from Indian posting and got a separate appointment letter for UK or it is an internal transfer and when you return to India you will be reabsorbed again in your previous place - This needs to be clarified for deciding your gratuity. If you have severed from Indian posting for ever, then you are eligible for gratuity since your service is above 5 years and if it is a transfer to UK, then for the time being cannot claim gratuity.
From India, Mumbai
From India, Mumbai
Subject to receiving Siddartha's clarifications on his gratuity issue, there appears -
i) He is yet to file his claim (subject to his eligibility w.r.t.separation of his service from the Indian Co.)
ii) Assuming he already filed the claim and the Indian employer yet to make his gratuity payment, provided the separation has been effected. And when his employment got over in Indian Co. ?
Here the question remains whether he is still not filed his claim in the Form and if so whether he still be eligible for payment of gratuity?
= Yes, (in case his service already separated) it's the duty of the Indian Co. to
a) calculate his eligible gratuity and intimate his/issue notice to him reg the payment.
b) if a) above didn't happen as yet, the onus is on the Indian employer to settle his gratuity together with accrued interest till the date of payment.
c) whether Siddartha's claim is barred by any limitation (assuming he has not yet filed his claim?
Answer to this is -
No Limitation to Claim Payment of Gratuity. The Payment of Gratuity Act does not prescribe any limitation to claim gratuity.
Payment of gratuity is not a bounty to the employee by the employer. It is the right of an employee to claim gratuity. And the employee doesn't forfeit his claim to gratuity just on a/c of the delayed claim. But the employer cannot delay the disbursement of gratuity. The amount should be disbursed without delay within 30 days of claim. Even if the claim is not received by the employer, calculate & issue a notice to the claimant.
It is duty of the employer to pay gratuity within stipulated period. In case, employee fails to claim, it is the duty of the employer, to calculate give notice in writing to the person to whom the gratuity is payable and also to the controlling authority (and deposit the same with the Controlling Authority). Failure of this, benefit of interest goes to the employee.
In case of any dispute -Starting point for payment of gratuity will be from the time when the employer disputes the liability. And in Siddartha's case there is no indication existence of any dispute either.
The employer cannot resist the claim of payment of Gratuity on the ground of limitation.
No claim for gratuity shall be invalid merely because the claimant failed to present his application within the specified period ( If any).
The rule leaves no manner of doubt that the Legislature intended that the claim or application for gratuity by an employee should not be defeated on technical consideration.
Payment of Gratuity
>>> Payment of Gratuity Act, 1972:
Section: 7
Determination of the amount of gratuity.
(1)A person who is eligible for payment of gratuity under this Act or any person authorized, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.
(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined.
(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.
(3-A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3) the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits, as that Government may, by notification specify
(4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the Controlling Authority such amount as he admits to be payable by him as gratuity
>>> Some states have enacted Gratuity Rules in accordance with the Act, to ensure that payment of social security benefit is further secured for the employees’ e.g;
THE GRATUITY ACT, 1972
The Payment of Gratuity (Maharashtra) Rules, 1972.
ELIGIBILITY: (i) Any person employed on wages / salary.
Other Requirements: 4) Abstract of the Payment of Gratuity Act & Rules made there under is to be displayed as per Rule 20.
5) Compulsory insurance of the employees is to be obtained Section:
4A Compulsory insurance Every employer has to obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer.
Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of 'contribution to all approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority. Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.
Determination of the amount of gratuity:
Section: 7 As soon as gratuity becomes payable, the employer shall determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined. A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:
>>> THE PAYMENT OF GRATUITY (CENTRAL) RULES, 1972-1
7. Application for gratuity.-(1) An employee who is eligible for payment of gratuity under the Act, or any person authorised, in writing, to act on his behalf, shall apply, ordinarily within thirty days from the date the gratuity became payable, in Form 'I' to the employer: Provided that where the date of superannuation or retirement of an employee is known, the employee may apply to the employer before thirty days of the date of superannuation or retirement.
(5) An application for payment of gratuity filed after the expiry of the periods specified in this rule shall also be entertained by the employer, if the applicant adduces sufficient cause for the delay in preferring his claim, and no claim for gratuity under the Act shall be invalid merely because the claimant failed to present his application within the specified period. Any dispute in this regard shall be referred to as the controlling authority for his decision.
Case law: (there are many) e.g.,
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Court No.22 - Writ Petition No.2841 (M/S) of 2008
Organic Fertilizers ... Petitioner
Versus
Assistant Labour Commissioner (Controlling Authority)
and another ... Opp. Parties
"A bare perusal of provisions of Section 7 of the Payment of Gratuity Act, 1972 reveals that employer is under duty to prepare the gratuity and give notice in writing to the employee.
Though the employee is also under obligation to submit the Form-I as prescribed, which requires certain informations unless certain informations as are required, are received to the employer, it is difficult for the employer to ascertain the facts and pay the gratuity as is demanded. Overall, it is not disputed that after retirement, the gratuity is payable to the employee. Therefore, I hereby observe that the petitioner shall extend the benefit of the gratuity to the opposite party no.2 as per order passed by the Prescribed Authority. So far as the interest is concerned, I do not find any error in the direction issued by the authorities concerned as only the direction has been issued to pay the interest w.e.f. the institution of the case till the date of decision. The petitioner shall pay the gratuity irrespective of the case pending before the Labour Court regarding the dispute of age of retirement. Learned counsel for the petitioner complaints that even after the retirement, the respondent has retaining the quarter without payment of rent etc. Learned counsel for the opposite party no.2 undertakes that as soon as the gratuity along with interest is paid, the opposite party no.2 shall vacate the quarter, considering which, in the interest of justice, I hereby provide that as soon as the amount of gratuity along with interest is paid, the contesting respondent shall vacate the quarter forthwith. It is further provided that the petitioner shall be at liberty to deduct the amount of rent from the amounts which are payable against the gratuity."
------------------
So it's upto Siddartha to act fast if the gratuity became "accrued & due".
From India, Bangalore
i) He is yet to file his claim (subject to his eligibility w.r.t.separation of his service from the Indian Co.)
ii) Assuming he already filed the claim and the Indian employer yet to make his gratuity payment, provided the separation has been effected. And when his employment got over in Indian Co. ?
Here the question remains whether he is still not filed his claim in the Form and if so whether he still be eligible for payment of gratuity?
= Yes, (in case his service already separated) it's the duty of the Indian Co. to
a) calculate his eligible gratuity and intimate his/issue notice to him reg the payment.
b) if a) above didn't happen as yet, the onus is on the Indian employer to settle his gratuity together with accrued interest till the date of payment.
c) whether Siddartha's claim is barred by any limitation (assuming he has not yet filed his claim?
Answer to this is -
No Limitation to Claim Payment of Gratuity. The Payment of Gratuity Act does not prescribe any limitation to claim gratuity.
Payment of gratuity is not a bounty to the employee by the employer. It is the right of an employee to claim gratuity. And the employee doesn't forfeit his claim to gratuity just on a/c of the delayed claim. But the employer cannot delay the disbursement of gratuity. The amount should be disbursed without delay within 30 days of claim. Even if the claim is not received by the employer, calculate & issue a notice to the claimant.
It is duty of the employer to pay gratuity within stipulated period. In case, employee fails to claim, it is the duty of the employer, to calculate give notice in writing to the person to whom the gratuity is payable and also to the controlling authority (and deposit the same with the Controlling Authority). Failure of this, benefit of interest goes to the employee.
In case of any dispute -Starting point for payment of gratuity will be from the time when the employer disputes the liability. And in Siddartha's case there is no indication existence of any dispute either.
The employer cannot resist the claim of payment of Gratuity on the ground of limitation.
No claim for gratuity shall be invalid merely because the claimant failed to present his application within the specified period ( If any).
The rule leaves no manner of doubt that the Legislature intended that the claim or application for gratuity by an employee should not be defeated on technical consideration.
Payment of Gratuity
>>> Payment of Gratuity Act, 1972:
Section: 7
Determination of the amount of gratuity.
(1)A person who is eligible for payment of gratuity under this Act or any person authorized, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.
(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined.
(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.
(3-A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3) the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits, as that Government may, by notification specify
(4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the Controlling Authority such amount as he admits to be payable by him as gratuity
>>> Some states have enacted Gratuity Rules in accordance with the Act, to ensure that payment of social security benefit is further secured for the employees’ e.g;
THE GRATUITY ACT, 1972
The Payment of Gratuity (Maharashtra) Rules, 1972.
ELIGIBILITY: (i) Any person employed on wages / salary.
Other Requirements: 4) Abstract of the Payment of Gratuity Act & Rules made there under is to be displayed as per Rule 20.
5) Compulsory insurance of the employees is to be obtained Section:
4A Compulsory insurance Every employer has to obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer.
Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of 'contribution to all approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority. Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.
Determination of the amount of gratuity:
Section: 7 As soon as gratuity becomes payable, the employer shall determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined. A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:
>>> THE PAYMENT OF GRATUITY (CENTRAL) RULES, 1972-1
7. Application for gratuity.-(1) An employee who is eligible for payment of gratuity under the Act, or any person authorised, in writing, to act on his behalf, shall apply, ordinarily within thirty days from the date the gratuity became payable, in Form 'I' to the employer: Provided that where the date of superannuation or retirement of an employee is known, the employee may apply to the employer before thirty days of the date of superannuation or retirement.
(5) An application for payment of gratuity filed after the expiry of the periods specified in this rule shall also be entertained by the employer, if the applicant adduces sufficient cause for the delay in preferring his claim, and no claim for gratuity under the Act shall be invalid merely because the claimant failed to present his application within the specified period. Any dispute in this regard shall be referred to as the controlling authority for his decision.
Case law: (there are many) e.g.,
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Court No.22 - Writ Petition No.2841 (M/S) of 2008
Organic Fertilizers ... Petitioner
Versus
Assistant Labour Commissioner (Controlling Authority)
and another ... Opp. Parties
"A bare perusal of provisions of Section 7 of the Payment of Gratuity Act, 1972 reveals that employer is under duty to prepare the gratuity and give notice in writing to the employee.
Though the employee is also under obligation to submit the Form-I as prescribed, which requires certain informations unless certain informations as are required, are received to the employer, it is difficult for the employer to ascertain the facts and pay the gratuity as is demanded. Overall, it is not disputed that after retirement, the gratuity is payable to the employee. Therefore, I hereby observe that the petitioner shall extend the benefit of the gratuity to the opposite party no.2 as per order passed by the Prescribed Authority. So far as the interest is concerned, I do not find any error in the direction issued by the authorities concerned as only the direction has been issued to pay the interest w.e.f. the institution of the case till the date of decision. The petitioner shall pay the gratuity irrespective of the case pending before the Labour Court regarding the dispute of age of retirement. Learned counsel for the petitioner complaints that even after the retirement, the respondent has retaining the quarter without payment of rent etc. Learned counsel for the opposite party no.2 undertakes that as soon as the gratuity along with interest is paid, the opposite party no.2 shall vacate the quarter, considering which, in the interest of justice, I hereby provide that as soon as the amount of gratuity along with interest is paid, the contesting respondent shall vacate the quarter forthwith. It is further provided that the petitioner shall be at liberty to deduct the amount of rent from the amounts which are payable against the gratuity."
------------------
So it's upto Siddartha to act fast if the gratuity became "accrued & due".
From India, Bangalore
Dear colleague,
The responses of the learned colleagues are based on assumptions as the poster has not clearly stated whether his services in India came to an end and whether he joined the subsidiary in UK as fresh employee or on transfer with continuity of service.
He needs to clarify relevant the terms of his appointment in UK subsidiary as well as in India.
On receiving this clarification, one can answer his query more appropriately.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
The responses of the learned colleagues are based on assumptions as the poster has not clearly stated whether his services in India came to an end and whether he joined the subsidiary in UK as fresh employee or on transfer with continuity of service.
He needs to clarify relevant the terms of his appointment in UK subsidiary as well as in India.
On receiving this clarification, one can answer his query more appropriately.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Circular No_04_2016 Payment of Gratuity to the No Work No Pay System workers under Payment of Gr.pdf
WORK PLACE STANDARDS - Blank.doc