Will employees get gratuity if employer sale his company to other company.
as per Gratuity act , emplyee is not eligible to get gratuity if he resigns before completing 5 years. But what will happen to the emplyees if employer sale his company.
Will employee get gratuity if he completes 4 years + 8 months?
From India, Madras
as per Gratuity act , emplyee is not eligible to get gratuity if he resigns before completing 5 years. But what will happen to the emplyees if employer sale his company.
Will employee get gratuity if he completes 4 years + 8 months?
From India, Madras
When a company is sold to another company section 25FFF of the Industrial Disputes Act is attracted. Accordingly, the employees are expected to be paid compensation at the rate of 15 days salary for every completed year of service as retrenchment compensation. If the service of the employees is also transferred, then there should be a consensus on the following points.
1. Past service of employees- whether their service will have effect from the date of joining in the past/ old company. If so, whether provision has been made for payment of gratuity by the new company.
2. Service conditions- whether the salary, benefits and other service conditions would remain unchanged or not.
If the above terms are clear there would not come any doubt about payment of gratuity. If no such liability is taken over by the new company then arrangements should have been done to pay the compensation and gratuity to those eligible for the same. Though all employees who have worked at least for 240 days in the preceding 12 months will be getting retrenchment compensation at the rate of 15 days salary for every completed year of service along with notice pay of one month salary (or notice in advance) only those who have worked for 5 years will be getting gratuity. However, in some states, say in Tamil Nadu, following a High Court verdict an employee who had worked for 4 years and 240 days in the fifth year is also allowed gratuity.
Regards,
Madhu.T.K
From India, Kannur
42491. Past service of employees- whether their service will have effect from the date of joining in the past/ old company. If so, whether provision has been made for payment of gratuity by the new company.
2. Service conditions- whether the salary, benefits and other service conditions would remain unchanged or not.
If the above terms are clear there would not come any doubt about payment of gratuity. If no such liability is taken over by the new company then arrangements should have been done to pay the compensation and gratuity to those eligible for the same. Though all employees who have worked at least for 240 days in the preceding 12 months will be getting retrenchment compensation at the rate of 15 days salary for every completed year of service along with notice pay of one month salary (or notice in advance) only those who have worked for 5 years will be getting gratuity. However, in some states, say in Tamil Nadu, following a High Court verdict an employee who had worked for 4 years and 240 days in the fifth year is also allowed gratuity.
Regards,
Madhu.T.K
From India, Kannur
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Gratuity notification amendment in definition of employees.pdf