Hi Ramachandra & All.
I looked back my deputation letter and it clearly states as Transfer letter. But they also say Gratuity will not be covered. But in relieving letter I see 5yr 9 mos without break of service.
My company is not responding now for my queries.
This is what I see in my transfer letter ....
" We are pleased to inform you that you are being transferred on an an assignment to USA, beginning the day you land in U.S under the following terms and condition .
- For the purpose of calculating gratuity, the period of service in India only will be considered for accounting purpose.
- You will be covered under US payroll from the day you report to work in US. Your India salary components such as Basic, FP, Gratuity , PF etc will be stopped from this date. "
Thanks
Mohan
From India, Bangalore
I looked back my deputation letter and it clearly states as Transfer letter. But they also say Gratuity will not be covered. But in relieving letter I see 5yr 9 mos without break of service.
My company is not responding now for my queries.
This is what I see in my transfer letter ....
" We are pleased to inform you that you are being transferred on an an assignment to USA, beginning the day you land in U.S under the following terms and condition .
- For the purpose of calculating gratuity, the period of service in India only will be considered for accounting purpose.
- You will be covered under US payroll from the day you report to work in US. Your India salary components such as Basic, FP, Gratuity , PF etc will be stopped from this date. "
Thanks
Mohan
From India, Bangalore
hi All, The gratuity act is applicable to all companies or with a minimum number of employees? same as PF? regards Sajith
From India, Madras
From India, Madras
Dear Sajith,
We are required to go through section 1(3) of the Payment of Gratuity Act to see its applicability which may be read as under:
1. (3) It shall apply to—
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
R.N.KHOLA
[SIZE=1][B][COLOR=#3366ff][FONT=Verdana]
From India, Delhi
363We are required to go through section 1(3) of the Payment of Gratuity Act to see its applicability which may be read as under:
1. (3) It shall apply to—
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
R.N.KHOLA
[SIZE=1][B][COLOR=#3366ff][FONT=Verdana]
From India, Delhi
Dear Mr Mohan
The gratuity is paid based on the employment conditions only and continuous service.
In your case the transfer letter states that your employment ceases with the indian company and the conditions of salary and benefits also ceases and you willbe in the pay roll of US company. Thus your salary components also change. With this background, I feel that you willbe elgible for gratuity till you were with the Indian company.
It is only for the service certificate or you can say experience certificate, the company has given the certificate saying you have had 5 yrs and 9 months. May be the company should have given a certificate saying, from....to.....you have worked in Indian company and from.... to........ in their US company. Since the transfer letter clearly gives a break for the terms of your employment while transfering you, I feel the gratuity also will not apply for the period you have worked in US as Gratuity Act is applicable to only India and though you have continuous service of 5 yrs and 9 months, it is not fully in India.
Hence I feel it would be right for you to get the gratuity for the service rendered in India. If there is any ambiguity in this opinion, it would be better to approach the Gratuity Authority only.
Regards
K.Ramachandra
Bangalore
The gratuity is paid based on the employment conditions only and continuous service.
In your case the transfer letter states that your employment ceases with the indian company and the conditions of salary and benefits also ceases and you willbe in the pay roll of US company. Thus your salary components also change. With this background, I feel that you willbe elgible for gratuity till you were with the Indian company.
It is only for the service certificate or you can say experience certificate, the company has given the certificate saying you have had 5 yrs and 9 months. May be the company should have given a certificate saying, from....to.....you have worked in Indian company and from.... to........ in their US company. Since the transfer letter clearly gives a break for the terms of your employment while transfering you, I feel the gratuity also will not apply for the period you have worked in US as Gratuity Act is applicable to only India and though you have continuous service of 5 yrs and 9 months, it is not fully in India.
Hence I feel it would be right for you to get the gratuity for the service rendered in India. If there is any ambiguity in this opinion, it would be better to approach the Gratuity Authority only.
Regards
K.Ramachandra
Bangalore
Dear Mr Vasanth Nair,
I reproduce below the relevant portion of Sec.2A of the Gratuity Act regarding continuous services:
Quote:
The Payment of Gratuity Act, 1972
For the purposes of this Act, - (1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer -
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than - (i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and (ii) two hundred and forty days, in any other case;
Unquote:
Please read the above clauses once again and particularly please read clause 2(a) which says that during the period of 12 Months preceding......., the person should have worked for 240 days. There are two things you have to understand, when we say continuous service, for CALCULATION PURPOSE, we have to ensure that the person has worked for 240 days during this 12 months. If not, he will not be eligible for gratuity. The Act does not say in an year we have to take 240 days only !! I repeat, it is for CALCULATION and not to be misunderstood as only 240 days per year. The person has to be on rolls for 365 days and may be he would be absent, sick, or otherwise, but if has worked for 240 days, it would be treated as continuous service and there is no break in service.
Regards
K.Ramachandra
Bangalore
I reproduce below the relevant portion of Sec.2A of the Gratuity Act regarding continuous services:
Quote:
The Payment of Gratuity Act, 1972
For the purposes of this Act, - (1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer -
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than - (i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and (ii) two hundred and forty days, in any other case;
Unquote:
Please read the above clauses once again and particularly please read clause 2(a) which says that during the period of 12 Months preceding......., the person should have worked for 240 days. There are two things you have to understand, when we say continuous service, for CALCULATION PURPOSE, we have to ensure that the person has worked for 240 days during this 12 months. If not, he will not be eligible for gratuity. The Act does not say in an year we have to take 240 days only !! I repeat, it is for CALCULATION and not to be misunderstood as only 240 days per year. The person has to be on rolls for 365 days and may be he would be absent, sick, or otherwise, but if has worked for 240 days, it would be treated as continuous service and there is no break in service.
Regards
K.Ramachandra
Bangalore
Hello Ramachandra,
In my case , will the company can pay Gratuity for 4 years (India service) excluding the service in U.S (1yr 8 mos) , considering overall service with company for 5yr 9mos or as you say its purely based on companies by-laws and they will honour Gratuity only if India service is 5yrs or more.
Thanks
Mohan
From India, Bangalore
In my case , will the company can pay Gratuity for 4 years (India service) excluding the service in U.S (1yr 8 mos) , considering overall service with company for 5yr 9mos or as you say its purely based on companies by-laws and they will honour Gratuity only if India service is 5yrs or more.
Thanks
Mohan
From India, Bangalore
Dear Mohan
As per gratuity Act and my inference, the gratuity cannot be paid to you for 4 years of service in India. However, instead of losing complete hope, I suggest you to put up your case with a letter to your company in writing. Based on their reply (wait for 15 days and if no reply comes), please take up the issue with the Gratuity Authority (Asst.labour Commissioner). As Gratuity Act is applicable only for India and as there is a clear break in service and as only for service certificate the total priod of 5 yrs 9 months is taken, I advise you to put up a letter to your company and in all good terms, if your company honouring your service, pays gratuity, it is ok, otherwise put up a letter to Asst.labour Commissioner with a copy of letter that you write to the company and leave the issue to be resolved by ALC only.
Trust the matter is clear.
Regards
K.Ramachandra
Bangalore
As per gratuity Act and my inference, the gratuity cannot be paid to you for 4 years of service in India. However, instead of losing complete hope, I suggest you to put up your case with a letter to your company in writing. Based on their reply (wait for 15 days and if no reply comes), please take up the issue with the Gratuity Authority (Asst.labour Commissioner). As Gratuity Act is applicable only for India and as there is a clear break in service and as only for service certificate the total priod of 5 yrs 9 months is taken, I advise you to put up a letter to your company and in all good terms, if your company honouring your service, pays gratuity, it is ok, otherwise put up a letter to Asst.labour Commissioner with a copy of letter that you write to the company and leave the issue to be resolved by ALC only.
Trust the matter is clear.
Regards
K.Ramachandra
Bangalore
Hi
I am in a complex situation where I worked for a company for 7 years in India and then they sent me to onsite for 5 years with condition that gratuity will continue in India
They transferred my payrole to its UK branch
They kept issuing me increment letters about increment of basic rate in india with condition if I join India back, it will be the increase basic
I worked for 5 years in UK and resigned in UK and did not go back to india
Now company wants to give me gratuity for 12 years ( 7 india and 5 for onsite deptuation) with calcuation based on my 5 years back basic salary and not the incremented basic as they say that you never joined back. but to my understanding they would have considered as payable basic. Even if the last paid basic then it would have been UK last paid (Though there is no basic component in UK payrole but only Gross)
Regards
Sannu
From United Kingdom, Belfast
I am in a complex situation where I worked for a company for 7 years in India and then they sent me to onsite for 5 years with condition that gratuity will continue in India
They transferred my payrole to its UK branch
They kept issuing me increment letters about increment of basic rate in india with condition if I join India back, it will be the increase basic
I worked for 5 years in UK and resigned in UK and did not go back to india
Now company wants to give me gratuity for 12 years ( 7 india and 5 for onsite deptuation) with calcuation based on my 5 years back basic salary and not the incremented basic as they say that you never joined back. but to my understanding they would have considered as payable basic. Even if the last paid basic then it would have been UK last paid (Though there is no basic component in UK payrole but only Gross)
Regards
Sannu
From United Kingdom, Belfast
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Form-F--Notice for Payment of Gratuity Act-Rule 8..pdf
Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc