Eligibility for entitlement of gratuity is after completion of 5 years of service with an organisation. When gratuity is a part of CTC and an employee resigns before completing the stipulated period of 5 years, he loses the share of gratuity that has accrued upto the period of his service which is less than 5 years. Under such circumstances what happens to the share of gratuity of such employees who resign before the completion of 5 years? this is with particular reference to the practice of providing for gratuity in the book of accounts of the company and this provision is made even for those whose service period is less than 5 years? If so, should not the employees be paid their share of the gratuity if they resign from a company before 5 years even though the statutory requirement is very clear? I think gratuity should be provided only after an employee completes 5 yrs of service. why should an employee loose money when it is a part of his CTC? This topic is only for discussion. I am very well aware about the existing rules.
From India, Mumbai
From India, Mumbai
Hi Anand,
I agree with your valid points. Now a days there is no particular law in my knowledge for CTC and the company getting the benefit whatever the component they want and put it in its CTC. By the definition it is ok that the cost is accrued by the company that definetly after 5 Years only. We have observed many of the settlement / Payment of Full & Final in such situation when an employee resigned before 5 Years. The eligibility comes only after 5 years and CTC can be revised on that time only.
A employee is going to join at that point of time it can not be forced that Gratuity should not to be the part because alway we (HR People) forcing them that we want you to join us as the loyality of the Company and we assured that you will with us for that of the period.
The problem with the company as well because in case if any employee does not resign from service before 5 year in such situation company has to bear the Gratuity cost from the DOJ.
In my opinion the company having the Gratuity as the component of CTC should provide the amount of Gratuity at the time of Full & Final to the employee.
I may request the HR Professionals to give their opinion and experience to share with us and if they are working under such company with any laws / notification by local or central GOVT. to share with us pls.
Rgds
Santosh
From India, New Delhi
1I agree with your valid points. Now a days there is no particular law in my knowledge for CTC and the company getting the benefit whatever the component they want and put it in its CTC. By the definition it is ok that the cost is accrued by the company that definetly after 5 Years only. We have observed many of the settlement / Payment of Full & Final in such situation when an employee resigned before 5 Years. The eligibility comes only after 5 years and CTC can be revised on that time only.
A employee is going to join at that point of time it can not be forced that Gratuity should not to be the part because alway we (HR People) forcing them that we want you to join us as the loyality of the Company and we assured that you will with us for that of the period.
The problem with the company as well because in case if any employee does not resign from service before 5 year in such situation company has to bear the Gratuity cost from the DOJ.
In my opinion the company having the Gratuity as the component of CTC should provide the amount of Gratuity at the time of Full & Final to the employee.
I may request the HR Professionals to give their opinion and experience to share with us and if they are working under such company with any laws / notification by local or central GOVT. to share with us pls.
Rgds
Santosh
From India, New Delhi
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