A worker who has completed 3 years continuous services, has been issued notice of retrenchment. I would like to know whether he is eligible to get gratuity at the time of retrenchment?
From India, Madras
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From India, Madras
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I think a minimum service of 5 years, is necessary to be eligible for gratuity. Subba Rao Bhagavatula
From India, Hyderabad
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2From India, Hyderabad
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Dear Mr.Saleth He is not entitled to get gratutity as he had not put in five years of continuous service
From India, Madras
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From India, Madras
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Hi, In my opinion and also, as per the law, Gratuity is eligible only for an employee those who have completed 5 years exactly in his service period is considered as a Gratuity.
From India, Calcutta
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From India, Calcutta
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Gratuity is payable only if the employee has put in a minimum of 5 years of continuous service with the same organization. For this purpose, the employer is required to have Form F filled out after the employee completes 1 year in the organization. The amount payable is 15 days of average pay for every year he has worked.
Now, addressing your question, if a worker who has completed 3 years of continuous service receives a notice of retrenchment, then he is entitled to retrenchment compensation. According to Section 25F of the Industrial Disputes Act, 1947 (Conditions precedent to retrenchment of workmen), the worker must be compensated, at the time of retrenchment, an amount equivalent to 15 days of average pay for every completed year of continuous service, or any part thereof exceeding 6 months.
From India, Mumbai
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Now, addressing your question, if a worker who has completed 3 years of continuous service receives a notice of retrenchment, then he is entitled to retrenchment compensation. According to Section 25F of the Industrial Disputes Act, 1947 (Conditions precedent to retrenchment of workmen), the worker must be compensated, at the time of retrenchment, an amount equivalent to 15 days of average pay for every completed year of continuous service, or any part thereof exceeding 6 months.
From India, Mumbai
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A person who has completed 5 years of continuous service in their organization is eligible to receive gratuity as per the Payment of Gratuity Act 1972 under Section 4. In the case of disability or death of an employee, there is no requirement for 5 years of continuous service.
Gratuity Calculation: Last drawn pay * 15 days of average pay * Number of continuous service / 26
Venu Gopal
Asst. Project Manager HR
DRDA
West Godavari
Andhra Pradesh
From India, Bhimavaram
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Gratuity Calculation: Last drawn pay * 15 days of average pay * Number of continuous service / 26
Venu Gopal
Asst. Project Manager HR
DRDA
West Godavari
Andhra Pradesh
From India, Bhimavaram
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Dear Friend,
SEE THE BELOW BRIEF NOTE ON GRATUITY ACT.
PREAMBLE
The Act provides for the payment of gratuity to workers employed in every factory, shop, and establishment or educational institution employing 10 or more persons on any day of the preceding 12 months. A shop or establishment to which the Act has become applicable shall continue to be governed by the Act even if the number of persons employed falls below 10 at any subsequent stage.
All the employees, irrespective of status or salary, are entitled to the payment of gratuity on completion of 5 years of service. In case of death or disablement, there is no minimum eligibility period. The amount of gratuity payable shall be at the rate of 15 days' wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable is RUPEES TEN LAKHS.
Formula is - Last Wages * 15 * No. of services / 26
NOMINATION
Each employee is required to nominate one or more members of his family, as defined in the Act, who will receive the gratuity in the event of the death of the employee.
ADMINISTRATIVE MACHINERY
All the Assistant Labour Commissioners and Labour Officers in the Labour Department have been appointed Controlling Authority and all the Deputy Labour Commissioners have been appointed Appellate Authority under the Act.
RESPONSIBILITY OF THE EMPLOYERS
It is the duty of the employer to determine the amount of gratuity as soon as it becomes payable and to give notice of the same to the person to whom gratuity is payable and also to the Controlling Authority. The employer shall also provide to pay the amount of gratuity to the person to whom it is payable. Failure to do so shall render him liable to pay interest at the prevailing rate for the time taken.
In case the employee is not paid the due amount of gratuity, he should apply, ordinarily within thirty days, in Form-I to the employer. If an employer fails to pay the due gratuity even after the receipt of notice in Form-1, the claimant employee or his nominee or legal heir may, within ninety days of the occurrence of the case for the application, apply in Form-IV to the Controlling Authority for issuing direction to the employer. After conducting the enquiry as prescribed, the Controlling Authority will determine the amount payable and direct the employer to make the payment. If the employer fails to comply with the direction, the Controlling Authority can direct the Collector to recover the amount due and pay it to the applicant.
Sec. 4. PAYMENT OF GRATUITY.—(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,—
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in the case of the death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs are a minor, the share of such a minor shall be deposited with the controlling authority who shall invest the same for the benefit of such a minor in such a bank or other financial institution, as may be prescribed, until such a minor attains majority.
Explanation.—For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of an employee who is employed in a seasonal establishment and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation.—In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
(3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
(4) For the purpose of computing the gratuity payable to an employee who is employed after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
(6) Notwithstanding anything contained in subsection (1),—
(a) the gratuity of an employee, whose services have been terminated for any act, willful omission, or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee may be wholly or partially forfeited—
(i) if the services of such an employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such an employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.
Regards,
PBS KUMAR
From India, Kakinada
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SEE THE BELOW BRIEF NOTE ON GRATUITY ACT.
PREAMBLE
The Act provides for the payment of gratuity to workers employed in every factory, shop, and establishment or educational institution employing 10 or more persons on any day of the preceding 12 months. A shop or establishment to which the Act has become applicable shall continue to be governed by the Act even if the number of persons employed falls below 10 at any subsequent stage.
All the employees, irrespective of status or salary, are entitled to the payment of gratuity on completion of 5 years of service. In case of death or disablement, there is no minimum eligibility period. The amount of gratuity payable shall be at the rate of 15 days' wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable is RUPEES TEN LAKHS.
Formula is - Last Wages * 15 * No. of services / 26
NOMINATION
Each employee is required to nominate one or more members of his family, as defined in the Act, who will receive the gratuity in the event of the death of the employee.
ADMINISTRATIVE MACHINERY
All the Assistant Labour Commissioners and Labour Officers in the Labour Department have been appointed Controlling Authority and all the Deputy Labour Commissioners have been appointed Appellate Authority under the Act.
RESPONSIBILITY OF THE EMPLOYERS
It is the duty of the employer to determine the amount of gratuity as soon as it becomes payable and to give notice of the same to the person to whom gratuity is payable and also to the Controlling Authority. The employer shall also provide to pay the amount of gratuity to the person to whom it is payable. Failure to do so shall render him liable to pay interest at the prevailing rate for the time taken.
In case the employee is not paid the due amount of gratuity, he should apply, ordinarily within thirty days, in Form-I to the employer. If an employer fails to pay the due gratuity even after the receipt of notice in Form-1, the claimant employee or his nominee or legal heir may, within ninety days of the occurrence of the case for the application, apply in Form-IV to the Controlling Authority for issuing direction to the employer. After conducting the enquiry as prescribed, the Controlling Authority will determine the amount payable and direct the employer to make the payment. If the employer fails to comply with the direction, the Controlling Authority can direct the Collector to recover the amount due and pay it to the applicant.
Sec. 4. PAYMENT OF GRATUITY.—(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,—
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in the case of the death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs are a minor, the share of such a minor shall be deposited with the controlling authority who shall invest the same for the benefit of such a minor in such a bank or other financial institution, as may be prescribed, until such a minor attains majority.
Explanation.—For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of an employee who is employed in a seasonal establishment and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation.—In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
(3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
(4) For the purpose of computing the gratuity payable to an employee who is employed after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
(6) Notwithstanding anything contained in subsection (1),—
(a) the gratuity of an employee, whose services have been terminated for any act, willful omission, or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee may be wholly or partially forfeited—
(i) if the services of such an employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such an employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.
Regards,
PBS KUMAR
From India, Kakinada
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Hello Pbs, The gratuity limit has been raised from Rs. 3,50,000 to Rs. 10,00,000 which you may kindly note. Cheers
From India, Mumbai
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From India, Mumbai
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Dear If an employee is retrench after completion of six years, whether he will get retrenchment compensation and gratuity amount both.
From India, Delhi
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From India, Delhi
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Dear Sushil and Meenakshi,
If an employee is retrenched after completion of six years, he will get both retrenchment compensation and gratuity subject, of course, to the condition that he is eligible for it under the Industrial Disputes Act and the Payment of Gratuity Act, respectively.
With regards,
From India, Madras
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If an employee is retrenched after completion of six years, he will get both retrenchment compensation and gratuity subject, of course, to the condition that he is eligible for it under the Industrial Disputes Act and the Payment of Gratuity Act, respectively.
With regards,
From India, Madras
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