If a company gives Form V to a contractor who has a labor license, and that contractor then subcontracts to another contractor who does not have a labor license, is it statutorily allowable or not? Please clarify this issue with the relevant clause of the act.
From India, Bharuch
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From India, Bharuch
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There are three aspects being discussed here: CTC, offer letter, and appointment letter. CTC is an estimate of employee expenses, and most companies do not share the actual CTC figures. The offer letter or appointment letter is a contract of employment governed by the provisions of the Indian Contract Act. The company includes gratuity as part of CTC to show the candidate that they care for their social well-being. However, when an employee completes 4 years and 239 days and their services are terminated, they are not entitled to receive payment of gratuity. The trick here is to show that the company pays gratuity, but conveniently omit it in the terminal settlement.
Nevertheless, if gratuity is mentioned in the appointment letter, which companies usually avoid doing, it becomes payable simply because the appointment letter is a contract of employment. Whatever amounts are mentioned in the appointment letter are payable to the employee, including gratuity, at the time of termination of service.
From India, Mumbai
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9Nevertheless, if gratuity is mentioned in the appointment letter, which companies usually avoid doing, it becomes payable simply because the appointment letter is a contract of employment. Whatever amounts are mentioned in the appointment letter are payable to the employee, including gratuity, at the time of termination of service.
From India, Mumbai
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Here the contractor shall be considered as principal contractor / employer and therefore liable to comply with the provisions of the Act.
From India, Mumbai
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From India, Mumbai
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For the benefit and information of all members, I am attaching a Madras High Court judgment (very old) which clearly explains the eligibility for payment of gratuity. Although numerous amendments have occurred in the Payment of Wages Act and Payment of Gratuity Act, the essence of the matter still holds true in today's scenario as well.
Thanks
From India, Aizawl
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Thanks
From India, Aizawl
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Dear friends,
I think those who accepted employment looking at CTC carry a high degree of wrong notion as to the size of their package. Every such person should focus their attention on the Gross salary, take-home pay, etc., rather than the total CTC. The Gross salary is the very same emoluments on which every such person is going to live on. The rest of the items, whether listed or not listed, revealed or not revealed, will have its impact only on separation from the present employer. In saying so, it doesn't mean one shouldn't bother about it though.
The gratuity is one such earning among others like accumulated contributions to EPF, interest accrued thereon, EPS, leave encashment, etc., which matters when the F&F settlement is being made out. The gratuity amount is an earning lawfully entitled to every employee who completed 5 yrs of 'Continuous service'. Denying this legitimate employee benefit is an offense. I request all those who decide to switch over to another employer shall take a conscious decision keeping in view the quantum of gratuity which might be lost forever if they fall short of this stipulation of 5 yrs. CS.
Let us look at it like this - if a PG youth enters his/her first job at the age of 21/22 and can serve up to 60 yrs. In this active working lifespan, say 37/38 yrs. Hypothetically let's assume he/she switches on to say 5 or 6 jobs serving in each tenure <5 yrs continuous service. Thus there is every possibility that he/she never sees an employee benefit known as 'gratuity', an amount maximum of Rs. 20 lakhs as per the Act.
The Madras High Court's judgment to the effect that 4 yrs 240 days of CS, though everybody is aware of it, for reasons unknown didn't find a place in any amendment to the Act. And therefore not widely implemented by unwilling employers as it remains a judgment of the Madras HC. I'm not sure whether any confirmatory plea is pending in the SC so that this amendment can be applied all over the country as and when the SC rules in favor.
Please apply your minds to these things. For ready reference, a gist of the Gratuity Act (amendments to be updated) is attached.
From India, Bangalore
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I think those who accepted employment looking at CTC carry a high degree of wrong notion as to the size of their package. Every such person should focus their attention on the Gross salary, take-home pay, etc., rather than the total CTC. The Gross salary is the very same emoluments on which every such person is going to live on. The rest of the items, whether listed or not listed, revealed or not revealed, will have its impact only on separation from the present employer. In saying so, it doesn't mean one shouldn't bother about it though.
The gratuity is one such earning among others like accumulated contributions to EPF, interest accrued thereon, EPS, leave encashment, etc., which matters when the F&F settlement is being made out. The gratuity amount is an earning lawfully entitled to every employee who completed 5 yrs of 'Continuous service'. Denying this legitimate employee benefit is an offense. I request all those who decide to switch over to another employer shall take a conscious decision keeping in view the quantum of gratuity which might be lost forever if they fall short of this stipulation of 5 yrs. CS.
Let us look at it like this - if a PG youth enters his/her first job at the age of 21/22 and can serve up to 60 yrs. In this active working lifespan, say 37/38 yrs. Hypothetically let's assume he/she switches on to say 5 or 6 jobs serving in each tenure <5 yrs continuous service. Thus there is every possibility that he/she never sees an employee benefit known as 'gratuity', an amount maximum of Rs. 20 lakhs as per the Act.
The Madras High Court's judgment to the effect that 4 yrs 240 days of CS, though everybody is aware of it, for reasons unknown didn't find a place in any amendment to the Act. And therefore not widely implemented by unwilling employers as it remains a judgment of the Madras HC. I'm not sure whether any confirmatory plea is pending in the SC so that this amendment can be applied all over the country as and when the SC rules in favor.
Please apply your minds to these things. For ready reference, a gist of the Gratuity Act (amendments to be updated) is attached.
From India, Bangalore
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Dear,
Gratuity means "a gift or present, often in return for favors or services." Gratuity is a statutory right of an employee who completes 5 years in the same organization. The cost is to be borne by the employer, not by the employee.
Gratuity cannot be a part of CTC. If a company includes it as part of CTC, you shall be eligible to receive the amount even if you have not completed 5 years.
From India, Gurgaon
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Gratuity means "a gift or present, often in return for favors or services." Gratuity is a statutory right of an employee who completes 5 years in the same organization. The cost is to be borne by the employer, not by the employee.
Gratuity cannot be a part of CTC. If a company includes it as part of CTC, you shall be eligible to receive the amount even if you have not completed 5 years.
From India, Gurgaon
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It is not appropriate to mention Gratuity as a part of CTC. If mentioned, then need to pay even if employee leaves on or before the completion years defined under Gratuity Act. It is therefore advisable to mentioned “Gratuity as per the Payment of Gratuity Act “in the appointment letter.
I had seen in many Telecom Sectors wherein Gratuity is a part of CTC and the same settled by employer as ex-gratia @ 4.81% of basic per month in their full and final settlement even if employee left the organization on or before completion of service-defined period under the said act.
For Example
Basic Salary 10000/- p.m
Gratuity is 15 days basic of every completed years of service
then amount should be divided by 26 to calculate per day salary 10000 /26= 384.6 gratuity is calculated on 26 days multiplied by 15 days means 384.6 * 15 days = 5769/- would be further divide by 12 (because 12 months in a year) means 5769 / 12 = 480.75 this is equal to 4.81 % of 10000 /- pm
From India, Delhi
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I had seen in many Telecom Sectors wherein Gratuity is a part of CTC and the same settled by employer as ex-gratia @ 4.81% of basic per month in their full and final settlement even if employee left the organization on or before completion of service-defined period under the said act.
For Example
Basic Salary 10000/- p.m
Gratuity is 15 days basic of every completed years of service
then amount should be divided by 26 to calculate per day salary 10000 /26= 384.6 gratuity is calculated on 26 days multiplied by 15 days means 384.6 * 15 days = 5769/- would be further divide by 12 (because 12 months in a year) means 5769 / 12 = 480.75 this is equal to 4.81 % of 10000 /- pm
From India, Delhi
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It is not appropriate to mention Gratuity as a part of CTC. If mentioned, then need to pay even if employee leaves on or before the completion years defined under Gratuity Act. It is therefore advisable to mentioned “Gratuity as per the Payment of Gratuity Act “in the appointment letter.
I had seen in many Telecom Sectors wherein Gratuity is a part of CTC and the same settled by employer as ex-gratia @ 4.81% of basic per month in their full and final settlement even if employee left the organization on or before completion of service-defined period under the said act.
For Example
Basic Salary 10000/- p.m
Gratuity is 15 days basic of every completed years of service
then amount should be divided by 26 to calculate per day salary 10000 /26= 384.6 gratuity is calculated on 26 days multiplied by 15 days means 384.6 * 15 days = 5769/- would be further divide by 12 (because 12 months in a year) means 5769 / 12 = 480.75 this is equal to 4.81 % of 10000 /- pm
From India, Delhi
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I had seen in many Telecom Sectors wherein Gratuity is a part of CTC and the same settled by employer as ex-gratia @ 4.81% of basic per month in their full and final settlement even if employee left the organization on or before completion of service-defined period under the said act.
For Example
Basic Salary 10000/- p.m
Gratuity is 15 days basic of every completed years of service
then amount should be divided by 26 to calculate per day salary 10000 /26= 384.6 gratuity is calculated on 26 days multiplied by 15 days means 384.6 * 15 days = 5769/- would be further divide by 12 (because 12 months in a year) means 5769 / 12 = 480.75 this is equal to 4.81 % of 10000 /- pm
From India, Delhi
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It is not appropriate to mention Gratuity as a part of CTC. If mentioned, then need to pay even if employee leaves on or before the completion years defined under Gratuity Act. It is therefore advisable to mentioned “Gratuity as per the Payment of Gratuity Act “in the appointment letter.
I had seen in many Telecom Sectors wherein Gratuity is a part of CTC and the same settled by employer as ex-gratia @ 4.81% of basic per month in their full and final settlement even if employee left the organization on or before completion of service-defined period under the said act.
For Example
Basic Salary 10000/- p.m
Gratuity is 15 days basic of every completed years of service
then amount should be divided by 26 to calculate per day salary 10000 /26= 384.6 gratuity is calculated on 26 days multiplied by 15 days means 384.6 * 15 days = 5769/- would be further divide by 12 (because 12 months in a year) means 5769 / 12 = 480.75 this is equal to 4.81 % of 10000 /- pm
From India, Delhi
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I had seen in many Telecom Sectors wherein Gratuity is a part of CTC and the same settled by employer as ex-gratia @ 4.81% of basic per month in their full and final settlement even if employee left the organization on or before completion of service-defined period under the said act.
For Example
Basic Salary 10000/- p.m
Gratuity is 15 days basic of every completed years of service
then amount should be divided by 26 to calculate per day salary 10000 /26= 384.6 gratuity is calculated on 26 days multiplied by 15 days means 384.6 * 15 days = 5769/- would be further divide by 12 (because 12 months in a year) means 5769 / 12 = 480.75 this is equal to 4.81 % of 10000 /- pm
From India, Delhi
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