Dear Sir,
Our establishment have 5 workers. We are into job work for third party. Out of them 1 is 1.5 year old and 4 are 10 years old. Now i want to discontinue our manufacturing operations. What are my liabilities for retrenchment? Can you please guide me that in addition to 1 month notice pay is my establishment liable to pay 15 months pay for each completed year of service also. As my impression is we being small factory Gratuity is not applicable to us? Kindly guide me.
With Best Regards
From India, Chandigarh
Our establishment have 5 workers. We are into job work for third party. Out of them 1 is 1.5 year old and 4 are 10 years old. Now i want to discontinue our manufacturing operations. What are my liabilities for retrenchment? Can you please guide me that in addition to 1 month notice pay is my establishment liable to pay 15 months pay for each completed year of service also. As my impression is we being small factory Gratuity is not applicable to us? Kindly guide me.
With Best Regards
From India, Chandigarh
You have to pay 1month's wages in-lieu of notice and 15 days' avg. pay for every completed yr. of service and 6 months' excess part.
Besides, in some states the Shops & establishments Act stipulates gratuity in case employee completes 10 yrs. This is irrespective of applicability of PG Act.
Please verify (i) whether you come under Shops & establishments Act, and (ii) whether the Shops & establishments Act of your state has such a provision.
From India
3Besides, in some states the Shops & establishments Act stipulates gratuity in case employee completes 10 yrs. This is irrespective of applicability of PG Act.
Please verify (i) whether you come under Shops & establishments Act, and (ii) whether the Shops & establishments Act of your state has such a provision.
From India
Thank You Sir for the prompt reply and guiding me as to my liabilities. My establishment is located in Panchkula, Haryana. Can your good self kindly guide as to whether Shop Act applicable to our organization has any such provision of gratuity.
With Best Regards
From India, Chandigarh
With Best Regards
From India, Chandigarh
Your establishment will not come under the purview of Payment of Gratuity Act and hence not required to pay any gratuity to the employees. Regards, Madhu.T.K
From India, Kannur
From India, Kannur
Dear friend,
I'm sorry to learn you R closing down. And retrenchment is a thankless job. Nevertheless - you have to comply with some statutory provisions. Pl.answer these questions-
1. Had your firm ever registered under any Act ? Any licences taken ?
2. Now you have 5 members to be retrenched. Did you ever had more than 10 members?
Going by your description I get an impression that you were running a small workshop like firm, unregistered. If so, you may consider paying one month's notice pay and an ex-gratia in lieu of/towards retrenchment compensation (15 days wages per year of service or part thereof. No gratuity is payable. But still, if you got good heart & money do whatever you can.These will relieve you from botheration statutorily, if any and mentally.
Good luck pal.
kumar.s.
From India, Bangalore
I'm sorry to learn you R closing down. And retrenchment is a thankless job. Nevertheless - you have to comply with some statutory provisions. Pl.answer these questions-
1. Had your firm ever registered under any Act ? Any licences taken ?
2. Now you have 5 members to be retrenched. Did you ever had more than 10 members?
Going by your description I get an impression that you were running a small workshop like firm, unregistered. If so, you may consider paying one month's notice pay and an ex-gratia in lieu of/towards retrenchment compensation (15 days wages per year of service or part thereof. No gratuity is payable. But still, if you got good heart & money do whatever you can.These will relieve you from botheration statutorily, if any and mentally.
Good luck pal.
kumar.s.
From India, Bangalore
Thank You Sir for your guidance.
Facts of our case are as under:
1) Our establishment is located in Haryana
2) Its a partnership firm
3) We have SSI Registration, TIN No, ESI No and registered with Shops Act
4) We have taken ESI No. in year 2000. Only at that time for 2 days we have shown 10 workers (5 daily workers were shown then). After that till today we have only 4-5 workers only
Kindly guide
With Best Regards.
From India, Chandigarh
Facts of our case are as under:
1) Our establishment is located in Haryana
2) Its a partnership firm
3) We have SSI Registration, TIN No, ESI No and registered with Shops Act
4) We have taken ESI No. in year 2000. Only at that time for 2 days we have shown 10 workers (5 daily workers were shown then). After that till today we have only 4-5 workers only
Kindly guide
With Best Regards.
From India, Chandigarh
The matter requires a rethinking in the light of the description given now. An establishment (since yours is registered under the Shops Act) which has employed 10 or more persons on any day during a period of 12 months shall be covered by Payment of Gratuity Act. This 12 months is not reckoned from the date on which the payment becomes due. I am not sure if there is any different interpretation to this. If yes, please share. If no, then it shall mean that once an establishment employs the 10th employee, the Act will become applicable to that establishment and it will continue to be applicable even if the number of employees becomes less than 10. In this scenario, your establishment is under the Payment of Gratuity Act. Moreover, you are covered by ESI Act also.
Regards,
Madhu.T.K
From India, Kannur
Regards,
Madhu.T.K
From India, Kannur
Thank You Madhu Sir.
But when I read the Act what I understood on plain reading of Sub Clause (b) of Clause 3 Payment of Gratuity Act shall apply to:
"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;"
PRECEDING TWELVE MONTHS from which date please clarify?
With Best Regards
Anudeep Goyal
From India, Chandigarh
But when I read the Act what I understood on plain reading of Sub Clause (b) of Clause 3 Payment of Gratuity Act shall apply to:
"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;"
PRECEDING TWELVE MONTHS from which date please clarify?
With Best Regards
Anudeep Goyal
From India, Chandigarh
That is the query/ doubt I have raised. It need not necessarily be a date on which you close down the establishment and thereby question of payment of gratuity arises because the event of payment of gratuity may arise when an employee who is otherwise eligible for gratuity by way of his length of service leaves or even on the happening of death of an employee. If so, in the year in which your employee strength became 10 shall be considered as the year in which the Act became applicable to your establishment.
I expect more interpretations on this by members.
Regards,
Madhu.T.K
From India, Kannur
I expect more interpretations on this by members.
Regards,
Madhu.T.K
From India, Kannur
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