Dear All, An employee working for more then five years in a company under contract basis without break of service is eligible for gratuity?. Please give an advice
From India, Vadodara
From India, Vadodara
Dear
As per the Payment of Gratuity Act, 1972 if any person is employed for wages other than apprentice then he is eligible to receive gratuity from the employer if he has rendered five years of continuous service as per section 2A of this Act. Advice submitted as per your brief statement. For further details you can also go through section 2(e)of this Act.
With Regards,
R.N.Khola
From India, Delhi
363As per the Payment of Gratuity Act, 1972 if any person is employed for wages other than apprentice then he is eligible to receive gratuity from the employer if he has rendered five years of continuous service as per section 2A of this Act. Advice submitted as per your brief statement. For further details you can also go through section 2(e)of this Act.
With Regards,
R.N.Khola
From India, Delhi
Dear All, I Need To Submite Welefare Fund to Labour welfare Dept .. Pls Help me Out In this Connection.... Regards Shivayogi R H
From India, Hyderabad
From India, Hyderabad
Dear Shree, Gratuity is not for employees working on Contractual basis... Regards, Maneesha Karki Officer HR
From India, Delhi
From India, Delhi
beg to differ from you Maneesha, Gratuity is for all irrespective of whether the employee is on contract basis or permanent basis.
Yes, in case the employee is on contract basis then it will be the responsibility of the contractor to provide the gratuity.
It will the moral responsibility of the PE to see that the contractor has paid the gratuity to the contractual employee.
I would like to attract your attention to one of our earlier thread discussing the same by SUHAS GARDE FROM NAGPUR
Dear All,
The payment of gratuity is linked with a concept, that if someone renders / offers his continuous service for more than 5 years to a particular establishment, then as a gesture of goodwill, he certainly deserves some appreciation. Thus to extend his gratitude the employer, makes some payment, as a token of appreciation for long association / service to the employee. To shape up or streamline this concept, our legislators enacted this into a peace of legislation, termed as '' The Payment of Gratuity Act, 1972''. This is a central act, and an independent peace of legislation. On the plain reading of Section 2(e), of the Act, i.e the definition of 'employee', the word 'contract employee' is not seen. Which means, the employees engaged by the contarctor, per se are not covered under the Act.
Similarly, the contract employees (which is a subject matter under contract labour Act)being the employee of contractor, the contractor is at his liberty to move them from one establishment to other. Thus, even if the contract employee remains in continuous employment of a contractor, he is rendering his uninterepted service to his employer, i.e the 'Contaractor'. In many of the contractual services like security, canteen, garden maint., house keeping, packing, the contractor keeps his employees moving at different locations. That shows the contract employee is offering his service to a particular contractor.
One of our friend has stated that, it is the liability of principal employer to pay gratuity, in case the contractor fails to make the payment. I feel he wanted to say in different context. As in Maharashtra, many of the industries like textile, residual and some Engg. industries are covered under the BIR, Act, where the definition of 'employee' covers even the contractor employee also. Further, some case laws under the CL(R & A) Act, shows that in case, the contractor fails to make payment to his employees statutory dues, its the liability of principal employer to pay. But, we haven't come across any such specific case law relating to gratuity payment being made by principal employer.
I am of the opinion, that contractors employee is not the liability of principal employer to pay as far as the issue relating to gratuity payment is concerned. This can be validated with a reasoning that any establishment engages the contract employees, for a specific nature of job, and for a specified period, with specific nos., by signing an agreement, and by complying with provisions under CL (R & A) Act. The establishment looks to it, that the services being given on contract are of not permenant nature & duration, rather sort of support services, which are like security, canteen, transport, packing, house keeping, garden maint.,loading,stacking etc... . Any industry off loads / outsources such support services to a contractor/vendor by following prescribed provisions under the CL (R & A) Act, which is again a seperate enactment. Thus, to talk about security service it can certainly be given on contract. The contractor keeps them on rotation by moving them at various locations, hence we can conclude for such services even if liability comes for gratuity, it is for the contractor to pay, and not for principal employer.
In Maharashtra, for regulating the employment of private security guards employed in factories and establishment, the security agency has to get it registered under ''The Maharashtra Private Security Guards (Regulation of employment & welfare) Act, 1981.'' This is a board, which declares min. wages for private security guards, and takes care of such issues... its like mathadi board.
Please do not engage contract workers on a continious uninerpted service of more than 5 + years.....then, you have no reason to call them contract employees.
Thanks and Regards,
Deepak Sabharwal
From India, Gurgaon
Yes, in case the employee is on contract basis then it will be the responsibility of the contractor to provide the gratuity.
It will the moral responsibility of the PE to see that the contractor has paid the gratuity to the contractual employee.
I would like to attract your attention to one of our earlier thread discussing the same by SUHAS GARDE FROM NAGPUR
Dear All,
The payment of gratuity is linked with a concept, that if someone renders / offers his continuous service for more than 5 years to a particular establishment, then as a gesture of goodwill, he certainly deserves some appreciation. Thus to extend his gratitude the employer, makes some payment, as a token of appreciation for long association / service to the employee. To shape up or streamline this concept, our legislators enacted this into a peace of legislation, termed as '' The Payment of Gratuity Act, 1972''. This is a central act, and an independent peace of legislation. On the plain reading of Section 2(e), of the Act, i.e the definition of 'employee', the word 'contract employee' is not seen. Which means, the employees engaged by the contarctor, per se are not covered under the Act.
Similarly, the contract employees (which is a subject matter under contract labour Act)being the employee of contractor, the contractor is at his liberty to move them from one establishment to other. Thus, even if the contract employee remains in continuous employment of a contractor, he is rendering his uninterepted service to his employer, i.e the 'Contaractor'. In many of the contractual services like security, canteen, garden maint., house keeping, packing, the contractor keeps his employees moving at different locations. That shows the contract employee is offering his service to a particular contractor.
One of our friend has stated that, it is the liability of principal employer to pay gratuity, in case the contractor fails to make the payment. I feel he wanted to say in different context. As in Maharashtra, many of the industries like textile, residual and some Engg. industries are covered under the BIR, Act, where the definition of 'employee' covers even the contractor employee also. Further, some case laws under the CL(R & A) Act, shows that in case, the contractor fails to make payment to his employees statutory dues, its the liability of principal employer to pay. But, we haven't come across any such specific case law relating to gratuity payment being made by principal employer.
I am of the opinion, that contractors employee is not the liability of principal employer to pay as far as the issue relating to gratuity payment is concerned. This can be validated with a reasoning that any establishment engages the contract employees, for a specific nature of job, and for a specified period, with specific nos., by signing an agreement, and by complying with provisions under CL (R & A) Act. The establishment looks to it, that the services being given on contract are of not permenant nature & duration, rather sort of support services, which are like security, canteen, transport, packing, house keeping, garden maint.,loading,stacking etc... . Any industry off loads / outsources such support services to a contractor/vendor by following prescribed provisions under the CL (R & A) Act, which is again a seperate enactment. Thus, to talk about security service it can certainly be given on contract. The contractor keeps them on rotation by moving them at various locations, hence we can conclude for such services even if liability comes for gratuity, it is for the contractor to pay, and not for principal employer.
In Maharashtra, for regulating the employment of private security guards employed in factories and establishment, the security agency has to get it registered under ''The Maharashtra Private Security Guards (Regulation of employment & welfare) Act, 1981.'' This is a board, which declares min. wages for private security guards, and takes care of such issues... its like mathadi board.
Please do not engage contract workers on a continious uninerpted service of more than 5 + years.....then, you have no reason to call them contract employees.
Thanks and Regards,
Deepak Sabharwal
From India, Gurgaon
i would like to state the clauses as well for the above.
Under sub-clause (4) Section 21 of the C L (R&A) Act, a responsibility is cast upon the PE to make the payment of wages if the Contractor fails to pay wages which under the definition of "wages" under the C L (R&A) Act state that definition of wages under the Payment of Wages Act (POWA) shall be applicable.
Section 2 of the POWA states the definition of WAGES …"any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum whether with or without deductions but does not provide for the time within which the payment is to be made;
Therefore, considering the definition of wages under the POWA the same covers gratuity which is payable upon termination of services under the Payment of Gratuity Act, under the C L (R&A) Act, responsibility is cast upon the PE to make payment of gratuity if the Contractor fails to pay the same.
Thanks and Regards,
Deepak Sabharwal
From India, Gurgaon
Under sub-clause (4) Section 21 of the C L (R&A) Act, a responsibility is cast upon the PE to make the payment of wages if the Contractor fails to pay wages which under the definition of "wages" under the C L (R&A) Act state that definition of wages under the Payment of Wages Act (POWA) shall be applicable.
Section 2 of the POWA states the definition of WAGES …"any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum whether with or without deductions but does not provide for the time within which the payment is to be made;
Therefore, considering the definition of wages under the POWA the same covers gratuity which is payable upon termination of services under the Payment of Gratuity Act, under the C L (R&A) Act, responsibility is cast upon the PE to make payment of gratuity if the Contractor fails to pay the same.
Thanks and Regards,
Deepak Sabharwal
From India, Gurgaon
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