Dear All,
a) Suppose if an employee works for an indian company transfers to a company in abroad (Group company) ....
1. Salary been processed and paid outside india. Returns to india after 6 years. Whether the continous period of service includes such period he worked in abroad?
2. Situation as above but salary is being processed and paid in india.
b) Should the provision for gratuity be created from the first year of service as per AS-15 (Employee Benefits)
Regards
Vijay L
From India
a) Suppose if an employee works for an indian company transfers to a company in abroad (Group company) ....
1. Salary been processed and paid outside india. Returns to india after 6 years. Whether the continous period of service includes such period he worked in abroad?
2. Situation as above but salary is being processed and paid in india.
b) Should the provision for gratuity be created from the first year of service as per AS-15 (Employee Benefits)
Regards
Vijay L
From India
The Payment of Gratuity Act is silent in respect of where the employee works. If there is no change in the employer's status, irrespective of the fact whether salary is computed as 'earned in India or Outside India' gratuity is payable. This is what I find. Since gratuity is a concept developed for the benefit of employees, it is expected to be inclined to that direction. Otherwise the employer should be able to prove that on transfer to abroad the employee lost continuous service. Transfer, deputation, on duty etc are terms which come within the service conditions and, therefore, sounds to clarify regularity of service.
Regards,
Madhu.T.K
From India, Kannur
4249Regards,
Madhu.T.K
From India, Kannur
Hi
It depends on what are the conditions you have specified in the letter of transfer.
If an employee is transferred to another country, then you also make him eligible for Social Security Benefits of thet country.
\
We must examine it in this context.
Anyway, lots of companies must be facing this issue let us hear from them
Siva
From India, Chennai
It depends on what are the conditions you have specified in the letter of transfer.
If an employee is transferred to another country, then you also make him eligible for Social Security Benefits of thet country.
\
We must examine it in this context.
Anyway, lots of companies must be facing this issue let us hear from them
Siva
From India, Chennai
Good Questions!! And the answers are bang on!! We faced this problem like nobody's business. We had an employee who went abroad and returned to India, not once, but many times round.
We had to determine whether the employee was to be paid gratuity during the gaps,when the need to stay onsite was for a very long time(note: this is the open part of the law-it does not give you an idea of the timeline).
We finally agreed in principal, that we had to pay the employee on 2 accounts:-
1) The Payment Of Gratuity Act is not only silent on the movement of resources abroad, but it subtlely allows the employer to come to any feasible conclusion;
2) We came to the conclusion that the employee had to move many times and back for our business reasons.
Hence morally, the employee deserved to be paid gratuity.
SK
From India, Bangalore
We had to determine whether the employee was to be paid gratuity during the gaps,when the need to stay onsite was for a very long time(note: this is the open part of the law-it does not give you an idea of the timeline).
We finally agreed in principal, that we had to pay the employee on 2 accounts:-
1) The Payment Of Gratuity Act is not only silent on the movement of resources abroad, but it subtlely allows the employer to come to any feasible conclusion;
2) We came to the conclusion that the employee had to move many times and back for our business reasons.
Hence morally, the employee deserved to be paid gratuity.
SK
From India, Bangalore
Hi,
i think if person is transferred to abroad, and he is on your pay roll, then he is eligible for gratuity even if he is working in other place.
but if is no more on your pay roll, then employer can deny the payment of gratuity.
From India, Mumbai
i think if person is transferred to abroad, and he is on your pay roll, then he is eligible for gratuity even if he is working in other place.
but if is no more on your pay roll, then employer can deny the payment of gratuity.
From India, Mumbai
The fact whether an employee is on the Indian company's payroll or not maybe valid. But the intriguing point is that the Act does not specify this or any timeline in which Gratuity is payable if the employee is moving back and forth.
Take for eg the IT Act - it clearly gives you a timeline to calculate a case where a person is a resident or non-resident.
By specifying a 5 Year period of continuous service, the employer is free to decide whether the payroll becomes the governing factor or business reasons or what have you!!
Hence it must be clearly understood that the Act as on date is more intended to ensure that the employee does infact get this amount.
Another question that comes to mind is whether a person can be paid twice the same type of amount in 2 different countries - eg of this being Social Security and Gratuity. My opinion remains the same - since the Act requires the employer to decide on this, it makes sense to ensure that a valid reason is provided to pay both if required, so long as the buisness reasons are justified.
SK
From India, Bangalore
Take for eg the IT Act - it clearly gives you a timeline to calculate a case where a person is a resident or non-resident.
By specifying a 5 Year period of continuous service, the employer is free to decide whether the payroll becomes the governing factor or business reasons or what have you!!
Hence it must be clearly understood that the Act as on date is more intended to ensure that the employee does infact get this amount.
Another question that comes to mind is whether a person can be paid twice the same type of amount in 2 different countries - eg of this being Social Security and Gratuity. My opinion remains the same - since the Act requires the employer to decide on this, it makes sense to ensure that a valid reason is provided to pay both if required, so long as the buisness reasons are justified.
SK
From India, Bangalore
It depends on the legal entity of the company. The same company can have number of brahches with in the country as well,if the entity is different you can pay the grauity eligible when he gets transffered.
From India, Gurgaon
From India, Gurgaon
Hello,
I have been working with a company for the last 5 1/2 years. I started in India for the first 2 years and got "transferred" to the USA for the same group for the past 3.5 years. During my transfer, I was told that my service in the USA will be considered as a "continuity" of service for the group and I was given a letter mentioning the same.
I am planning to quit from USA and would like to know if I am eligible for Gratuity since I was a transfer employee assigned to work in the USA and I have completed 5 years??? If yes, then the company should calculate my last drawn USA pay for this calculation right??
Please help me understand.
Thanks,
Vee
From United States, Los Gatos
I have been working with a company for the last 5 1/2 years. I started in India for the first 2 years and got "transferred" to the USA for the same group for the past 3.5 years. During my transfer, I was told that my service in the USA will be considered as a "continuity" of service for the group and I was given a letter mentioning the same.
I am planning to quit from USA and would like to know if I am eligible for Gratuity since I was a transfer employee assigned to work in the USA and I have completed 5 years??? If yes, then the company should calculate my last drawn USA pay for this calculation right??
Please help me understand.
Thanks,
Vee
From United States, Los Gatos
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