Hellow everybody,
Org. starts from Proprietorship - 1990
Converted to Partnership - 1996
Converted into Pvt. Ltd. Co. - 2006
Now, some x-employees asking Gratuity amounts. How, to calculate Gratuity ? Some one suggesting to go to LIC's scheme..... what is better ?
Provision also required for x-employees completed employment period of 5 years ?
Experts requested to guide.
Rajendra
From India, Pune
2Org. starts from Proprietorship - 1990
Converted to Partnership - 1996
Converted into Pvt. Ltd. Co. - 2006
Now, some x-employees asking Gratuity amounts. How, to calculate Gratuity ? Some one suggesting to go to LIC's scheme..... what is better ?
Provision also required for x-employees completed employment period of 5 years ?
Experts requested to guide.
Rajendra
From India, Pune
Formula for gratuity
Gratuity = Monthly salary x 15 days x No. of years of service.
Insuranace
The Payment of Gratuity (Amendment) Act, 1987 has laid provisions for compulsory insurance to cover employer’s liability towards payment of gratuity under the Act from the Life Insurance Corporation of India establishment under the Life Insurance Corporation of India Act,1956 or any other prescribed Insurer.
From India, Pune
Gratuity = Monthly salary x 15 days x No. of years of service.
Insuranace
The Payment of Gratuity (Amendment) Act, 1987 has laid provisions for compulsory insurance to cover employer’s liability towards payment of gratuity under the Act from the Life Insurance Corporation of India establishment under the Life Insurance Corporation of India Act,1956 or any other prescribed Insurer.
From India, Pune
Dear Rajendra,
The change in the constitution of your Company from that of a Proprietorship Firm to that of a Private Limited Company is a cosmetic change only and it can not alter the right of the employees to gratuity if they are qualified based on their length of service and mode of termination of their employment. This is equally applicable to all ex-employees if they are eligible and left out to be paid gratuty soon after their termination.
From India, Salem
The change in the constitution of your Company from that of a Proprietorship Firm to that of a Private Limited Company is a cosmetic change only and it can not alter the right of the employees to gratuity if they are qualified based on their length of service and mode of termination of their employment. This is equally applicable to all ex-employees if they are eligible and left out to be paid gratuty soon after their termination.
From India, Salem
Here there are few points to be clarified -
1. Rajendra asking this query- is't on behalf of the co. or for employees, both left and continuing. Are you from Finance/Acs dept. of this co.This is reqd. to clarify what the employer is reqd. to do and what is in store for the employees.
2. Is there any document to show the continuity of employment (continuous service) is ensured despite the change in the status of the firm i.e. from Prop. to Partnership to Co. to Ltd.Co.
3. What was the understanding/assurances given by these admn. for those employees who left these entities from time to time.
4. What is the mode of operation past, present and for the future the admin. is following w.r.t.to gratuity.
5. How the gratuity for the left employees was managed so far. Is the Gratuity Act is applicable to all employees at present. What is the status of those not covered by the act.
6. Was/Is there any 'gratuity fund' created and left to a co's trust to administer.
7. Since presently it is a Ltd. co. provisions of the Companies Act, 1956 is attracted. Therefore a provision for statutory compliance in accordance with the Actuarial valuation method (certified by an Actuary) has to be created in the Accts.of the co. Failing which the Auditor will not certify your Accts. or make a qualification in their Report to the Board/Share holders mentioning the amount involved.
8. Have you/your co. discussed these issues with LIC. If so what is their proposal.
From India, Bangalore
1. Rajendra asking this query- is't on behalf of the co. or for employees, both left and continuing. Are you from Finance/Acs dept. of this co.This is reqd. to clarify what the employer is reqd. to do and what is in store for the employees.
2. Is there any document to show the continuity of employment (continuous service) is ensured despite the change in the status of the firm i.e. from Prop. to Partnership to Co. to Ltd.Co.
3. What was the understanding/assurances given by these admn. for those employees who left these entities from time to time.
4. What is the mode of operation past, present and for the future the admin. is following w.r.t.to gratuity.
5. How the gratuity for the left employees was managed so far. Is the Gratuity Act is applicable to all employees at present. What is the status of those not covered by the act.
6. Was/Is there any 'gratuity fund' created and left to a co's trust to administer.
7. Since presently it is a Ltd. co. provisions of the Companies Act, 1956 is attracted. Therefore a provision for statutory compliance in accordance with the Actuarial valuation method (certified by an Actuary) has to be created in the Accts.of the co. Failing which the Auditor will not certify your Accts. or make a qualification in their Report to the Board/Share holders mentioning the amount involved.
8. Have you/your co. discussed these issues with LIC. If so what is their proposal.
From India, Bangalore
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc