Hi,
As per Gratuity act (In India), the act says that the minimum number of years of continuos service for the employee to be eligible for gratuity is 5 years. However, it adds that the company can frame their own gratuity rules, but the conditions for eligibility should be more beneficial than the gratuity act 1972.
Coming to your point, if the employee resigns after three years of service, he is not entitled for Gratuity and the management is not bound to pay gratuity. However, the gratuity provision made for the said employee assuming he/she will continue for five years, will get adjusted in the provisions to be made for other employees in the subsequent months.
From India, Madras
2As per Gratuity act (In India), the act says that the minimum number of years of continuos service for the employee to be eligible for gratuity is 5 years. However, it adds that the company can frame their own gratuity rules, but the conditions for eligibility should be more beneficial than the gratuity act 1972.
Coming to your point, if the employee resigns after three years of service, he is not entitled for Gratuity and the management is not bound to pay gratuity. However, the gratuity provision made for the said employee assuming he/she will continue for five years, will get adjusted in the provisions to be made for other employees in the subsequent months.
From India, Madras
Dear Malik Saheb,
I will be extremely thankful if the "said judgement" copy is shared through this. This will be highly useful to person like me and other forum memebers.
Meanwhile thanks a lot for taking time to reply and give clear clarification to my specific query. Always grateful to you, Sir. I am your Follower and I take note your replies & clarifications.
With best regards,
Sundararaman
From India, Madras
I will be extremely thankful if the "said judgement" copy is shared through this. This will be highly useful to person like me and other forum memebers.
Meanwhile thanks a lot for taking time to reply and give clear clarification to my specific query. Always grateful to you, Sir. I am your Follower and I take note your replies & clarifications.
With best regards,
Sundararaman
From India, Madras
Dear idbi,
Payment of gratuity 1972, does not provide for gratuity of contract workers (by principal employer). They are the employees of the contractor, so he will solely be responsible for gratuity and hence he cant charge the principal employer for the same. However, for other compliance like PF, ESIC, principal employer is responsible for adherence. Principal employer should in fact, not involve in gratuity aspect of contract workers.
Regards,
Saurabh
From India, Ranchi
Payment of gratuity 1972, does not provide for gratuity of contract workers (by principal employer). They are the employees of the contractor, so he will solely be responsible for gratuity and hence he cant charge the principal employer for the same. However, for other compliance like PF, ESIC, principal employer is responsible for adherence. Principal employer should in fact, not involve in gratuity aspect of contract workers.
Regards,
Saurabh
From India, Ranchi
In Madras Fertilizers Ltd v. Controlling Authority under Payment of Gratuity Act case 2003 (Madras High Court) court held that any sum payable under law on termination of employment of the employee as part of wages. Once Gratuity, thus becomes part of wages, it will be the basic responsibility of the Principal Employer to pay Gratuity to the contract labor BUT recover the same from the contractor.
Regards,
CG
From India, Delhi
Regards,
CG
From India, Delhi
Dear sir
Yes, the legal position is that if the contractor fails to pay the dues of his employees then the principal employer is ultimately held responsible for the payment. Therefore it is wise to pay the gratuity but at the same time pls ensure that at the time of separation of the employee it is paid to him alternatively contractor should give indemnity bond.
From India, Pune
Yes, the legal position is that if the contractor fails to pay the dues of his employees then the principal employer is ultimately held responsible for the payment. Therefore it is wise to pay the gratuity but at the same time pls ensure that at the time of separation of the employee it is paid to him alternatively contractor should give indemnity bond.
From India, Pune
Dear CG
If you have copy of that judgement .please attach the same because
gratuity does not come in the definition of wages but accoding to you as mentioned by Madras high cour it is wages,please forward the same or give case reference so we can find out from LLR etc.
From India, Delhi
If you have copy of that judgement .please attach the same because
gratuity does not come in the definition of wages but accoding to you as mentioned by Madras high cour it is wages,please forward the same or give case reference so we can find out from LLR etc.
From India, Delhi
Dear Sundar
i donot hve copy of judgement but kerala high cout given judgement in
cominco binani zinc ltd vspappachan,1989 LLR 123 .
no doubt a principle employer is laible to pay wages to employees of contractor if the later fails to make payment of wages to his employees.However,it has been held in abovesaid case that the gratuity and bonuswill not be payable by principle employer since these do not come in the definition of Wages.
From India, Delhi
i donot hve copy of judgement but kerala high cout given judgement in
cominco binani zinc ltd vspappachan,1989 LLR 123 .
no doubt a principle employer is laible to pay wages to employees of contractor if the later fails to make payment of wages to his employees.However,it has been held in abovesaid case that the gratuity and bonuswill not be payable by principle employer since these do not come in the definition of Wages.
From India, Delhi
Malik Saheb thanks again for your guidance giving the case reference.
I could browse and get the Judgement copy which is attached herewith for the benefit Cite HR Forum Members.
Look forward to more & more interactions with you to gain knowledge on the Labour Laws. With best regards,
Sundararaman
From India, Madras
I could browse and get the Judgement copy which is attached herewith for the benefit Cite HR Forum Members.
Look forward to more & more interactions with you to gain knowledge on the Labour Laws. With best regards,
Sundararaman
From India, Madras
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Fixed Term Contract Employees to get Gratuity.docx