Accepting someone as an employee under one act/legislation (EPF) and denying the same under other act/legislation (Gratuity) ......who will agree with this?
If such type of stand is taken by the Employer, the court will not only disapprove it but may also pass strictures against the Employer as it is nothing but manipulating the terms of the legislation.
Denying this guy of Gratuity benefits on CSR ground can not be accepted as he was getting wages and not any stipend or scholarship.
I have got sponsorship agreement signed with future employees where we sponsor them and bear the training or educational expenses. In such cases we pay them stipend or scholarship, we dont pay salary (wages).
Even if we accept that Employer's intention was not wrong rather it was their goodwill gesture to cover the guy under EPF, I would say the Employer was not properly advised on the subject and has chosen a wrong path to execute their idea.
From India, Pune
173If such type of stand is taken by the Employer, the court will not only disapprove it but may also pass strictures against the Employer as it is nothing but manipulating the terms of the legislation.
Denying this guy of Gratuity benefits on CSR ground can not be accepted as he was getting wages and not any stipend or scholarship.
I have got sponsorship agreement signed with future employees where we sponsor them and bear the training or educational expenses. In such cases we pay them stipend or scholarship, we dont pay salary (wages).
Even if we accept that Employer's intention was not wrong rather it was their goodwill gesture to cover the guy under EPF, I would say the Employer was not properly advised on the subject and has chosen a wrong path to execute their idea.
From India, Pune
Dear All,
again some more clarification.
in my I-card and in system Date of joining is wriiten as 04-08-2008.
and regarding the wages or stipend; i am not able to, what i should call this...
as per appointment letter, this is written as stipend, but in our pay- slip i have detailed break-up for the same like the break-up of salary....
so i dont whether to consider it as salary or stipend??
From United States, Ashburn
again some more clarification.
in my I-card and in system Date of joining is wriiten as 04-08-2008.
and regarding the wages or stipend; i am not able to, what i should call this...
as per appointment letter, this is written as stipend, but in our pay- slip i have detailed break-up for the same like the break-up of salary....
so i dont whether to consider it as salary or stipend??
From United States, Ashburn
Hi Prakash
This proves that in August this year you'd complete your 5 years of continuous service.
Again as I said earlier apprentices are not covered under PF or related act.
So even if they have mentioned salary but have deducted your PF and deposited it with PF authorities, again second proof to your employee-employer relationship.
Let's understand stipend firstly:
A stipend is a form of salary, such as for an internship or apprenticeship.
It is often distinct from a wage or a salary because it does not necessarily represent payment for work performed; instead it represents a payment that enables somebody to be exempt partly or wholly from waged or salaried employment in order to undertake a role that is normally unpaid (e.g. a magistrate in England) or voluntary, or which cannot be measured in terms of a task (e.g. members of the clergy).
Stipends are usually lower than what would be expected as a permanent salary for similar work.
Source-
Stipend - Wikipedia, the free encyclopedia
Again to re-emphasis my point that since PF is deducted from your salary, it cannot be qualified as stipend. You can also get further information on the discussion of the difference between salary and stipend on this forum. A relevant attribution by Mr. Dinesh Divakar is as follows:
Stipend is paid under the provisions of Apprentice Act 1961. The minimum amount is decided and revised every year by the Govt. However, employers have liberty to pay more than what is stipulated. Stipend is paid to the apprentices. They are not employees, either regular or contractual. Provisions of PF and ESI are not applicable for apprentices when they receive stipend.
attribution from - https://www.citehr.com/423069-differ...#ixzz2TABKYTb4
For your perusal
Apprentice Act - APPRENTICESHIP RULES
Training in employment - Training of Employees - Need and Importance of Training
From India, Mumbai
This proves that in August this year you'd complete your 5 years of continuous service.
Again as I said earlier apprentices are not covered under PF or related act.
So even if they have mentioned salary but have deducted your PF and deposited it with PF authorities, again second proof to your employee-employer relationship.
Let's understand stipend firstly:
A stipend is a form of salary, such as for an internship or apprenticeship.
It is often distinct from a wage or a salary because it does not necessarily represent payment for work performed; instead it represents a payment that enables somebody to be exempt partly or wholly from waged or salaried employment in order to undertake a role that is normally unpaid (e.g. a magistrate in England) or voluntary, or which cannot be measured in terms of a task (e.g. members of the clergy).
Stipends are usually lower than what would be expected as a permanent salary for similar work.
Source-
Stipend - Wikipedia, the free encyclopedia
Again to re-emphasis my point that since PF is deducted from your salary, it cannot be qualified as stipend. You can also get further information on the discussion of the difference between salary and stipend on this forum. A relevant attribution by Mr. Dinesh Divakar is as follows:
Stipend is paid under the provisions of Apprentice Act 1961. The minimum amount is decided and revised every year by the Govt. However, employers have liberty to pay more than what is stipulated. Stipend is paid to the apprentices. They are not employees, either regular or contractual. Provisions of PF and ESI are not applicable for apprentices when they receive stipend.
attribution from - https://www.citehr.com/423069-differ...#ixzz2TABKYTb4
For your perusal
Apprentice Act - APPRENTICESHIP RULES
Training in employment - Training of Employees - Need and Importance of Training
From India, Mumbai
If you resign on 5th July, 2013 then considering one month notice period your last working day would be 4th August 2013. It means you complete your 5 years on 3rd August, 2013 after office hours.
For the calculation of services it is only consider the last working day not the date of resignation.
Here I seek the guidance of seniors……
From India, Ahmadabad
For the calculation of services it is only consider the last working day not the date of resignation.
Here I seek the guidance of seniors……
From India, Ahmadabad
Dear Mr.Hardeep,
Your statement is 100% correct. But, if any employee put his resignation in view of one month notice period, The employer has right to accept the said resignation with immediate effect without waiting for one month and by paying one month salary in lie of Notice period. In a such incidence an employee can't entitled for Gratuity. To avoid such things, an employee should resign after completion of 5 years continuous service only for getting Gratuity.
regards,
Ramesh Rao
H.R-SPML
From India, Hyderabad
Your statement is 100% correct. But, if any employee put his resignation in view of one month notice period, The employer has right to accept the said resignation with immediate effect without waiting for one month and by paying one month salary in lie of Notice period. In a such incidence an employee can't entitled for Gratuity. To avoid such things, an employee should resign after completion of 5 years continuous service only for getting Gratuity.
regards,
Ramesh Rao
H.R-SPML
From India, Hyderabad
Dear Prakash
I have gone through your query and all the responses with care.
I had thought of refraining from commenting; but I can empathise with your rising concern on the subject of gratuity.
I totally agree with the analytical comments of KPrasoon; which are in conformity with the Laws on Gratuity; and which are followed to the letter; as well as in spirit; by all good companies.
Saswatabanerjee has also rightly cautioned you with the subterfuges adopted by bad companies to deny their employees their rightful and lawful dues.
Ankita has summed up the situation comprehensively.
In my opinion; what matters most is what kind of company you are working with.
As one is aware, there are companies which are the best places to work; for they provide more than what the Law asks for or stipulates. As all are aware; Law stipulates only the MINIMUM; and a good employer is free to give more benefits to its employees.
In such companies; for example; they do not even even restrict gratuity to a minimum service of five years. Also, in the last year of service, a period exceeding six month (which is even lesser than the stipulated 240 days) is reckoned as a full year for payment of gratuity. Also, if an employee has completed certain years, say thirty years of service, then instead of fifteen days salary for every completed years of service; they give full months salary for every completed years of service. These are the hallmarks of a great company - to be better than what the Law and Acts prescribe as the Minimum !!!
Then there are good companies; where legal compliance is complete. they do not violate any stipulations of the Law.
Finally, there are companies, which are called so, as they just manage to register themselves as companies and in reality are just a proprietor's business outfit. In such companies, there is always an attempt at hoodwinking the Law; trying to find loopholes in the Law and to exploit the employees to the maximum extent feasible.
These penny-pinching kind of companies always attempt to do the following, which is sure indicator of their philosophy and company policy :
- find ways to to avoid payment of gratuity (by attempting to reckon less service than actual);
- reduce the company payables in case of PF (by bifurcating even the Minimum Wages; or capping the PF at Rs. 780; keeping thee basic pay low; using cash reimbursements etc);
- try to reduce the accrued Leave by using sandwich leave concepts or clubbing sundays/weekly off or closed holidays in the leave period; etc.
In your case; what the company will do - depends on what kind of company it is. From your description; I gather that its a good and reputed company.
If it is so; then rest assured, you will not be denied of your gratuity. There are two important points in your favour :
1. Your PF contributions have been deducted from the very outset; which signifies your status as an enrolled employee.
2. The clause in the appointment letter, that the training period is not to be counted as service; is fairly standard and is applied wherever there is such long period of training involved such as for Management Trainee, Executive Trainee or Engineer Trainee etc.
Such persons are always considered as Trainees, whose services can be terminated on non-completion of Training or unsatisfactory performance during training. In both the cases; they can not be taken as employees and posted elsewhere; rather their services are terminated.
This is the actual purpose of having that clause - that services will be counted only after satisfactory completion of training.
3. After training, once such a trainee is absorbed and regularized (generally a confirmation letter/ Part - 2 order is issued) and he is posted; his service or Date of Joining is reckoned with the earlier / original date of joining.
In any case; as already pointed out; anything that is CONTRARY to the Act; shall not be considered. Thus, no company policy can run contrary to the provisions of the Act and you can not be denied of your rightful claim.
Accordingly; it would be better, if you discuss the matter in confidence, with your HR manager and based on the feedback, act accordingly.
Do keep us informed of the developments.
Warm regards.
From India, Delhi
I have gone through your query and all the responses with care.
I had thought of refraining from commenting; but I can empathise with your rising concern on the subject of gratuity.
I totally agree with the analytical comments of KPrasoon; which are in conformity with the Laws on Gratuity; and which are followed to the letter; as well as in spirit; by all good companies.
Saswatabanerjee has also rightly cautioned you with the subterfuges adopted by bad companies to deny their employees their rightful and lawful dues.
Ankita has summed up the situation comprehensively.
In my opinion; what matters most is what kind of company you are working with.
As one is aware, there are companies which are the best places to work; for they provide more than what the Law asks for or stipulates. As all are aware; Law stipulates only the MINIMUM; and a good employer is free to give more benefits to its employees.
In such companies; for example; they do not even even restrict gratuity to a minimum service of five years. Also, in the last year of service, a period exceeding six month (which is even lesser than the stipulated 240 days) is reckoned as a full year for payment of gratuity. Also, if an employee has completed certain years, say thirty years of service, then instead of fifteen days salary for every completed years of service; they give full months salary for every completed years of service. These are the hallmarks of a great company - to be better than what the Law and Acts prescribe as the Minimum !!!
Then there are good companies; where legal compliance is complete. they do not violate any stipulations of the Law.
Finally, there are companies, which are called so, as they just manage to register themselves as companies and in reality are just a proprietor's business outfit. In such companies, there is always an attempt at hoodwinking the Law; trying to find loopholes in the Law and to exploit the employees to the maximum extent feasible.
These penny-pinching kind of companies always attempt to do the following, which is sure indicator of their philosophy and company policy :
- find ways to to avoid payment of gratuity (by attempting to reckon less service than actual);
- reduce the company payables in case of PF (by bifurcating even the Minimum Wages; or capping the PF at Rs. 780; keeping thee basic pay low; using cash reimbursements etc);
- try to reduce the accrued Leave by using sandwich leave concepts or clubbing sundays/weekly off or closed holidays in the leave period; etc.
In your case; what the company will do - depends on what kind of company it is. From your description; I gather that its a good and reputed company.
If it is so; then rest assured, you will not be denied of your gratuity. There are two important points in your favour :
1. Your PF contributions have been deducted from the very outset; which signifies your status as an enrolled employee.
2. The clause in the appointment letter, that the training period is not to be counted as service; is fairly standard and is applied wherever there is such long period of training involved such as for Management Trainee, Executive Trainee or Engineer Trainee etc.
Such persons are always considered as Trainees, whose services can be terminated on non-completion of Training or unsatisfactory performance during training. In both the cases; they can not be taken as employees and posted elsewhere; rather their services are terminated.
This is the actual purpose of having that clause - that services will be counted only after satisfactory completion of training.
3. After training, once such a trainee is absorbed and regularized (generally a confirmation letter/ Part - 2 order is issued) and he is posted; his service or Date of Joining is reckoned with the earlier / original date of joining.
In any case; as already pointed out; anything that is CONTRARY to the Act; shall not be considered. Thus, no company policy can run contrary to the provisions of the Act and you can not be denied of your rightful claim.
Accordingly; it would be better, if you discuss the matter in confidence, with your HR manager and based on the feedback, act accordingly.
Do keep us informed of the developments.
Warm regards.
From India, Delhi
HI prakash
what ankita said is exactly right. why don't you wait for one month to complete your 5 years of service.
and however as per your appointment letter you shall entitle for gratuity after 05.08.2013 only.
so wait till aug 2013 and enjoy gratuity benefit.
KHS
From India, Hyderabad
what ankita said is exactly right. why don't you wait for one month to complete your 5 years of service.
and however as per your appointment letter you shall entitle for gratuity after 05.08.2013 only.
so wait till aug 2013 and enjoy gratuity benefit.
KHS
From India, Hyderabad
Yes your are eligible for your gratuity .
The law tells if any employees completes the tenure of 5 yrs is eligible for gratuity.
in this employment it involves Probation, notice and all.
Hence, You can avail for your Gratuity.
From India, Hyderabad
The law tells if any employees completes the tenure of 5 yrs is eligible for gratuity.
in this employment it involves Probation, notice and all.
Hence, You can avail for your Gratuity.
From India, Hyderabad
Dear All,
further to my query, i have resigned on 24th August and my last day in company is 24 Sept 2013.
According the reply received, i am eligible to Gratuity, but our Finance department has refused to give the gratuity stating that the training perios is not considered as service, as per their view trainee is considered as Aprentice, but it is not mentioned anywhere in the letter...
so please advice me what steps i should take to counter this...
also clarify me that whether PF and EPS is deducted for apprentice also???
From United States, Ashburn
further to my query, i have resigned on 24th August and my last day in company is 24 Sept 2013.
According the reply received, i am eligible to Gratuity, but our Finance department has refused to give the gratuity stating that the training perios is not considered as service, as per their view trainee is considered as Aprentice, but it is not mentioned anywhere in the letter...
so please advice me what steps i should take to counter this...
also clarify me that whether PF and EPS is deducted for apprentice also???
From United States, Ashburn
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Surendra_Kumar_ Verma_Etc_vs_Th e_Central_Gover nment_on_23_Sep tember_1980 Gratuity payable 4 years.pdf
Gratuity Form I.doc