Dear HR Friends,
I am seeking a Clarification/Correct Rules applicable on Gratuity Amount.
A Portion( say Rs 1000.00) is shown in the annual CTC breakup and the same i understand is kept aside. This is neither reflected in the salary nor I ahe any ack stating that this is being deduced from my CTC. I believe the said amount is deemed to be kept aside, while I have not recd in either form.
My querries are as follows to get an Insight into this problem.
1. Is it legally right to use the word Gratuity under the CTC Breakup and bea part of my CTC. I understand Gratuity is more like a Loyalty amount eligible to an employee after completion of 5 years or 4 years and 240 days.
2. In my case since it is part of my CTC, when will I be eligible to claim?
3. Should a Min of 5 Years / 4 Years, 240 days is a Must?
4. As and when I leave ( within 4 years), can I get back this amount from my employer, since it is part of my CTC - meaning No of months worked times amount and deduced by the management
I need the opinion / Rules for my Senior HR Luminaries so that I need not get carried away by one sided thought process.
look forward to your replies
Srinivas
From India, Bangalore
1I am seeking a Clarification/Correct Rules applicable on Gratuity Amount.
A Portion( say Rs 1000.00) is shown in the annual CTC breakup and the same i understand is kept aside. This is neither reflected in the salary nor I ahe any ack stating that this is being deduced from my CTC. I believe the said amount is deemed to be kept aside, while I have not recd in either form.
My querries are as follows to get an Insight into this problem.
1. Is it legally right to use the word Gratuity under the CTC Breakup and bea part of my CTC. I understand Gratuity is more like a Loyalty amount eligible to an employee after completion of 5 years or 4 years and 240 days.
2. In my case since it is part of my CTC, when will I be eligible to claim?
3. Should a Min of 5 Years / 4 Years, 240 days is a Must?
4. As and when I leave ( within 4 years), can I get back this amount from my employer, since it is part of my CTC - meaning No of months worked times amount and deduced by the management
I need the opinion / Rules for my Senior HR Luminaries so that I need not get carried away by one sided thought process.
look forward to your replies
Srinivas
From India, Bangalore
Dear Srinivas
From the legal perspective of Gratuity Act, it has nothing to do with your monthly salary as in the case of P.F or ESI. It is the amount payable by an employer to an employee on his resignation or retirement (in the present context of your case) provided he completes a continuous period of Five years of service. However from contractual perspective, the employer may be showing it as part of cost to company.You will not be eligible for gratuity if you leave the Service within four years unless the reason for leaving the service is on account of any disability.
B.Saikumar
HR & Labour Law Advisor
Mumbai
09930532927.
From India, Mumbai
From the legal perspective of Gratuity Act, it has nothing to do with your monthly salary as in the case of P.F or ESI. It is the amount payable by an employer to an employee on his resignation or retirement (in the present context of your case) provided he completes a continuous period of Five years of service. However from contractual perspective, the employer may be showing it as part of cost to company.You will not be eligible for gratuity if you leave the Service within four years unless the reason for leaving the service is on account of any disability.
B.Saikumar
HR & Labour Law Advisor
Mumbai
09930532927.
From India, Mumbai
Dear Srinivas,
Answers in BOLD
1. Is it legally right to use the word Gratuity under the CTC Breakup and bea part of my CTC. I understand Gratuity is more like a Loyalty amount eligible to an employee after completion of 5 years or 4 years and 240 days.
Every company is projecting their cost of the employees annually in their budget, they show it in TCTC of employees appointment letter. There is no wrong in it. The company is working out gratuity for the allocation of fund.
2. In my case since it is part of my CTC, when will I be eligible to claim?
You will be eligible only when you resign from the company after completing a minimum of 5 yrs.
3. Should a Min of 5 Years / 4 Years, 240 days is a Must?
You have to work for 5 years. There is a judgement given by Madras High court saying 4 yrs and 240 days the employee is eligible for gratuity. But organisation will encourage only above 5 yrs.
4. As and when I leave ( within 4 years), can I get back this amount from my employer, since it is part of my CTC - meaning No of months worked times amount and deduced by the management
No you are not eligible for the amount. Management is not deducting your salary for gratuity. It is only show as an benefit for you.
From India, Mumbai
Answers in BOLD
1. Is it legally right to use the word Gratuity under the CTC Breakup and bea part of my CTC. I understand Gratuity is more like a Loyalty amount eligible to an employee after completion of 5 years or 4 years and 240 days.
Every company is projecting their cost of the employees annually in their budget, they show it in TCTC of employees appointment letter. There is no wrong in it. The company is working out gratuity for the allocation of fund.
2. In my case since it is part of my CTC, when will I be eligible to claim?
You will be eligible only when you resign from the company after completing a minimum of 5 yrs.
3. Should a Min of 5 Years / 4 Years, 240 days is a Must?
You have to work for 5 years. There is a judgement given by Madras High court saying 4 yrs and 240 days the employee is eligible for gratuity. But organisation will encourage only above 5 yrs.
4. As and when I leave ( within 4 years), can I get back this amount from my employer, since it is part of my CTC - meaning No of months worked times amount and deduced by the management
No you are not eligible for the amount. Management is not deducting your salary for gratuity. It is only show as an benefit for you.
From India, Mumbai
True that there is nothing wrong if the employer makes gratuity a part of CTC but only annual contribution (15 days salary, Basic + DA) to the Gratuity fund should be mentioned in the CTC.
From India, Pune
From India, Pune
Hi Guys, Thanks for the info what you given for gratuity, but my company not paying any gratuity to any of our employees even they completed their 5 Yrs of Exp.
From India, Hyderabad
From India, Hyderabad
Dear Manasvi,
This will be done mainly in proprietorship / partnership firm only.
Here the rules is made / changed for their own convenience.
Since today due to high attrition / turnover and to retain employees many organisation are giving many benefits out of which gratuity is one among them.
So in near future your company will also implement the same or try to speak with your HR to speak with the management about the gratuity plan.
From India, Mumbai
This will be done mainly in proprietorship / partnership firm only.
Here the rules is made / changed for their own convenience.
Since today due to high attrition / turnover and to retain employees many organisation are giving many benefits out of which gratuity is one among them.
So in near future your company will also implement the same or try to speak with your HR to speak with the management about the gratuity plan.
From India, Mumbai
Dear Answer given by B.Saikumar and Shenbagrajan is absolutely correct. Tks for both of them
From India, Delhi
From India, Delhi
The Employee if he shows Gratuity deduction in CTC according to me he is bound to reimburse the amount whether you have completed the eligible period for eligible for gratuity or not. Once you complete the eligible period you are eligible to only Gratuity amount according to the Act which is definitely higher.
From India, Maisuru
From India, Maisuru
Dear SSRAO,
Gratuity, Superannuation are the retrial benefits given to the employees and showed in TCTC part where it will be given only when the employees complete the prescribed years of service.
So the company will not reimburse the amount unless he completes 5 yrs for gratuity.
From India, Mumbai
Gratuity, Superannuation are the retrial benefits given to the employees and showed in TCTC part where it will be given only when the employees complete the prescribed years of service.
So the company will not reimburse the amount unless he completes 5 yrs for gratuity.
From India, Mumbai
I fully agree with the views expressed by ssraomys. The candidate nods for joining only after finding that his expectations are met with the ctc offered , considering this will be paid to him.Therefore he has every right to demand the amount of gratuity portion , even if he leaves before completing 5 years of service. This will not be applicable for amenities such as unifors, canteen subsidy etc.
From India, Pune
From India, Pune
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Gratuity Form N- seeking intervention of Labour Officer.pdf