Dear All,
It is intriguing that the employee is not coming forward to collect the gratuity amount. But is the employee traceable? If yes, then send a registered letter in the form of a notice as specified in the Gratuity Act. If the employee does not come, the employer cannot help. If the employee is not traceable, then legally all parties have to wait for 8 years. If even after 8 years the employee is not found, then the amount of gratuity is to be paid to the nominee whom the employee had nominated in Form F. If there is no nomination, then the employer has to wait for a claimant for the gratuity amount. When anyone approaches for the gratuity amount, advise that person to go to court and obtain a letter of probate. The employer need not decide who the legal heirs are; let the Court make that determination.
Vibhakar Ramtirthkar.
From India, Pune
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87It is intriguing that the employee is not coming forward to collect the gratuity amount. But is the employee traceable? If yes, then send a registered letter in the form of a notice as specified in the Gratuity Act. If the employee does not come, the employer cannot help. If the employee is not traceable, then legally all parties have to wait for 8 years. If even after 8 years the employee is not found, then the amount of gratuity is to be paid to the nominee whom the employee had nominated in Form F. If there is no nomination, then the employer has to wait for a claimant for the gratuity amount. When anyone approaches for the gratuity amount, advise that person to go to court and obtain a letter of probate. The employer need not decide who the legal heirs are; let the Court make that determination.
Vibhakar Ramtirthkar.
From India, Pune
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Dear all,
The problem can be resolved by writing to the employee concerned with a copy to the Controlling authority under the Payment of Gratuity Act, clearly indicating your intention to pay the gratuity amount. However, the employee appears to be uninterested (please see Section 7(2)). Further, Sub-section 3 clearly states that where the delay is on the part of the defaulting employee, then no liability is attached to the employer.
Another option is to deposit the amount with the Labour Welfare Fund authorities. Please check the state law applicable, as any unpaid amount to an employee could be paid to the Labour Welfare Fund authorities after the prescribed waiting period is over. The employer will be free of any liability thereafter.
Thank you.
From India, Bhopal
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The problem can be resolved by writing to the employee concerned with a copy to the Controlling authority under the Payment of Gratuity Act, clearly indicating your intention to pay the gratuity amount. However, the employee appears to be uninterested (please see Section 7(2)). Further, Sub-section 3 clearly states that where the delay is on the part of the defaulting employee, then no liability is attached to the employer.
Another option is to deposit the amount with the Labour Welfare Fund authorities. Please check the state law applicable, as any unpaid amount to an employee could be paid to the Labour Welfare Fund authorities after the prescribed waiting period is over. The employer will be free of any liability thereafter.
Thank you.
From India, Bhopal
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Dear Sonam,
I concur with Mr. Kalsi. However, since in view of the rejection of the resignation and the subsequent penal termination of the services of the employee on account of unauthorized absence by inference, you should have arranged payment of his gratuity as calculated by you before the expiry of 30 days from the date of dismissal. As suggested by Mr. Kalsi, immediately obtain the permission of the C.A. as per the proviso to S.7(3A). In addition, deposit the amount of gratuity as per your calculation with the C.A. forthwith as per S.7(4)(a) in order to avoid interest and other penal actions.
From India, Salem
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I concur with Mr. Kalsi. However, since in view of the rejection of the resignation and the subsequent penal termination of the services of the employee on account of unauthorized absence by inference, you should have arranged payment of his gratuity as calculated by you before the expiry of 30 days from the date of dismissal. As suggested by Mr. Kalsi, immediately obtain the permission of the C.A. as per the proviso to S.7(3A). In addition, deposit the amount of gratuity as per your calculation with the C.A. forthwith as per S.7(4)(a) in order to avoid interest and other penal actions.
From India, Salem
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I have gone through the comments of all the members. It is the statutory obligation of the employer to pay gratuity on time to the employee. If the employee concerned did not apply or is not traceable, the employer must prepare his/her gratuity in the prescribed form and deposit the same to the Controlling Authority. Failing to do so will attract the imposition of a fine and penalty.
From India, Koraput
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From India, Koraput
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Make a note of it in the unpaid wages register. Send him a notice by registered post asking him to come for his full and final settlement. If he does not come, then after 3 years, you have to deposit the money in the labor welfare fund of your state. You may deduct from the gratuity amount any dues the employee has towards the company, including the value of the short notice period.
From India, Mumbai
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From India, Mumbai
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Dear All,
1. Under the Payment of Gratuity Act, an employer cannot keep or hold the payable gratuity under any circumstances.
2. If there is any dispute, the employer must deposit the payable gratuity with the Controlling Authority.
3. The present case is also a dispute under the Payment of Gratuity Act.
4. The employer cannot deposit the payable gratuity in the Labor Welfare Fund without exploring the options available under the Payment of Gratuity Act, which includes involving the Controlling Authority in the whole process of gratuity payment to anyone.
5. If the Controlling Authority returns the deposited payable gratuity to the employer, then only the option of depositing the gratuity in the LWF arises; otherwise, it does not.
6. No amount can be deducted from the calculated gratuity in the present case, as the Payment of Gratuity Act clearly provides that the gratuity payable to an employee may be wholly or partially forfeited only under the following conditions: if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or if the services of such employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.
Gratuity is a protected benefit and cannot be attached even in the execution of any decree or order of the civil or criminal court.
Regards,
Kamal
From India, Pune
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1. Under the Payment of Gratuity Act, an employer cannot keep or hold the payable gratuity under any circumstances.
2. If there is any dispute, the employer must deposit the payable gratuity with the Controlling Authority.
3. The present case is also a dispute under the Payment of Gratuity Act.
4. The employer cannot deposit the payable gratuity in the Labor Welfare Fund without exploring the options available under the Payment of Gratuity Act, which includes involving the Controlling Authority in the whole process of gratuity payment to anyone.
5. If the Controlling Authority returns the deposited payable gratuity to the employer, then only the option of depositing the gratuity in the LWF arises; otherwise, it does not.
6. No amount can be deducted from the calculated gratuity in the present case, as the Payment of Gratuity Act clearly provides that the gratuity payable to an employee may be wholly or partially forfeited only under the following conditions: if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or if the services of such employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.
Gratuity is a protected benefit and cannot be attached even in the execution of any decree or order of the civil or criminal court.
Regards,
Kamal
From India, Pune
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Gratuity is not a protected benefit like PF. The concept of partial forfeiture is where the company is allowed to refuse to pay gratuity, typically when the employee has committed a serious offense such as fraud. However, once the amount is payable, the company can deduct amounts owed by the employee to the company. In the case of PF, it is different. The entire amount has to be given directly to the employee, and nothing can be recovered from that amount.
Regarding depositing with the controlling authority, you may be correct. I had not considered that option. However, there is no dispute here. The employee has not filed the application for gratuity and has not come for his full and final settlement. The employer is not disputing the amount payable.
Under the Payment of Gratuity Act, the employer cannot withhold the payable gratuity under any circumstances. In case of any dispute, the employer must deposit the payable gratuity with the Controlling Authority. The present case is also a dispute under the Payment of Gratuity Act. The employer cannot deposit the payable gratuity in the Labor Welfare Fund without exploring the options available under the Payment of Gratuity Act, which includes involving the Controlling Authority in the entire process of gratuity payment to anyone.
No amount can be deducted from the calculated gratuity in the present case as the Payment of Gratuity Act clearly provides that the gratuity payable to an employee may be wholly or partially forfeited only under specific conditions. Gratuity is a protected benefit and cannot be attached even in the execution of any decree or order of the civil or criminal court.
Regards,
Kamal
From India, Mumbai
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Regarding depositing with the controlling authority, you may be correct. I had not considered that option. However, there is no dispute here. The employee has not filed the application for gratuity and has not come for his full and final settlement. The employer is not disputing the amount payable.
Under the Payment of Gratuity Act, the employer cannot withhold the payable gratuity under any circumstances. In case of any dispute, the employer must deposit the payable gratuity with the Controlling Authority. The present case is also a dispute under the Payment of Gratuity Act. The employer cannot deposit the payable gratuity in the Labor Welfare Fund without exploring the options available under the Payment of Gratuity Act, which includes involving the Controlling Authority in the entire process of gratuity payment to anyone.
No amount can be deducted from the calculated gratuity in the present case as the Payment of Gratuity Act clearly provides that the gratuity payable to an employee may be wholly or partially forfeited only under specific conditions. Gratuity is a protected benefit and cannot be attached even in the execution of any decree or order of the civil or criminal court.
Regards,
Kamal
From India, Mumbai
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Dear Saswatabanerjee,
Deductions from the gratuity amount as per calculation formula given in the Payment of Gratuity Act is only possible under the strict conditions given in the Act.
Employer can not deducton any amount from the calculated gratuity under any condition other than as mentioned in the said Act.
Protected benefit does not mean that the amount payable should be with the third party and not with the employer.(as you have given example of PF benefits)
Gratuity is a protected benefit because it has been given protection under sec 13 of the Act which says "Gratuity of an employee can not be attached for under any decree by court or any kind of payment" and the same has been upheald by several High courts and Hon. Supreme Court on India.
There are several cases and judgement in which the court gave a very clear view that "Withhold or Adjustment of Gratuity is not permissiable under any circumstance other then those mentioned in section 4(6) of the Act otherwise, the amount towards gratuity shall stand protected under Sec.13 of the Act" and this the legal position of the matter as on now.
I would request you to go through the cases Yada Lakmi Vs A.P State Co. bank LLR 2008 (108) , K.C Methew V/s Plantation Corporation Kerla LLR 2001(123) ker , Panchmahal District Co-Operative Bank limited – Petitioner Vs Harjivandas Purshottamdas Prajapati – Respondent, Gujrat High court.
In Ram Ranjan Mukhjeri V/s Minining and Allied Machinery Corporation Ltd 2001 LLR 297(Cal HC).the court held that "even if a workmen give undertaking for making deductions, the gratuity of an employee can not be withheld".
Your contention that "there is no dispute here. The employe has not filed the application for gratuity and has not come for his full and final settlement. The employer is not disputing the amount payable." I would say there is a DISPUTE from the legal point of view as intervention of the Controlling Authority is required to settle the issue.
Lets not mis-interpretate and twist the provisions of law. Interpretation are done by the competent court of law not by us.
regards,
Kamal
From India, Pune
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Deductions from the gratuity amount as per calculation formula given in the Payment of Gratuity Act is only possible under the strict conditions given in the Act.
Employer can not deducton any amount from the calculated gratuity under any condition other than as mentioned in the said Act.
Protected benefit does not mean that the amount payable should be with the third party and not with the employer.(as you have given example of PF benefits)
Gratuity is a protected benefit because it has been given protection under sec 13 of the Act which says "Gratuity of an employee can not be attached for under any decree by court or any kind of payment" and the same has been upheald by several High courts and Hon. Supreme Court on India.
There are several cases and judgement in which the court gave a very clear view that "Withhold or Adjustment of Gratuity is not permissiable under any circumstance other then those mentioned in section 4(6) of the Act otherwise, the amount towards gratuity shall stand protected under Sec.13 of the Act" and this the legal position of the matter as on now.
I would request you to go through the cases Yada Lakmi Vs A.P State Co. bank LLR 2008 (108) , K.C Methew V/s Plantation Corporation Kerla LLR 2001(123) ker , Panchmahal District Co-Operative Bank limited – Petitioner Vs Harjivandas Purshottamdas Prajapati – Respondent, Gujrat High court.
In Ram Ranjan Mukhjeri V/s Minining and Allied Machinery Corporation Ltd 2001 LLR 297(Cal HC).the court held that "even if a workmen give undertaking for making deductions, the gratuity of an employee can not be withheld".
Your contention that "there is no dispute here. The employe has not filed the application for gratuity and has not come for his full and final settlement. The employer is not disputing the amount payable." I would say there is a DISPUTE from the legal point of view as intervention of the Controlling Authority is required to settle the issue.
Lets not mis-interpretate and twist the provisions of law. Interpretation are done by the competent court of law not by us.
regards,
Kamal
From India, Pune
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I stand corrected on the concept of protected payment.
I have not checked the relevant court decisions but I assume you must be well acquire red with that.
On the last part,
The act requires the employee apply for gratuity, for which there is a relevant form (Form I). The employee has not filed the form.,the employer is not disputing the amount or that it is payable. The provision of the act as far as I recall says once you get form I, you have to send notice of payment showing how much is payable and the computation and the date by which it will be paid (within 30 days). So, if the employee has not applied and has not come to do his full and final settlement, does the employer still need to deposit this with the authority ?
From India, Mumbai
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I have not checked the relevant court decisions but I assume you must be well acquire red with that.
On the last part,
The act requires the employee apply for gratuity, for which there is a relevant form (Form I). The employee has not filed the form.,the employer is not disputing the amount or that it is payable. The provision of the act as far as I recall says once you get form I, you have to send notice of payment showing how much is payable and the computation and the date by which it will be paid (within 30 days). So, if the employee has not applied and has not come to do his full and final settlement, does the employer still need to deposit this with the authority ?
From India, Mumbai
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It is obligatory on the part of the employer to pay gratuity within 30 days of the employee leaving. Not receiving Form I cannot be an excuse for a delay in the gratuity payment. If the employee is not traceable, the employer should deposit the amount (calculated as per the formula given in the Payment of Gratuity Act) with the Controlling Authority; failing which, the employer has to pay interest.
Delay in the payment of gratuity payment under any circumstances, except as directed by the Controlling Authority, amounts to contravening the provisions of the Act.
Regards,
Kamal
From India, Pune
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Delay in the payment of gratuity payment under any circumstances, except as directed by the Controlling Authority, amounts to contravening the provisions of the Act.
Regards,
Kamal
From India, Pune
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