Dear All,
Please I need your assistance to compute the final entitlement due to some staff.
They have worked for a period from 1st March 1991-November 2011 and 1st August 1992-November 2011 respectively.
Under the old arrangement, gratuity is due to a staff after 10yrs of service while under the new arrangement,it\'s 5yrs with effect from 1st July 2001.
Now,
1. how am i to calculate their benefits using both the Old and the New arrangement?
2.where and how can i get the basis for computation of both arrangement? 3.would it be wise to just ignored the old arrangement as other exited staff had been paid prior to this time?
From Nigeria
Please I need your assistance to compute the final entitlement due to some staff.
They have worked for a period from 1st March 1991-November 2011 and 1st August 1992-November 2011 respectively.
Under the old arrangement, gratuity is due to a staff after 10yrs of service while under the new arrangement,it\'s 5yrs with effect from 1st July 2001.
Now,
1. how am i to calculate their benefits using both the Old and the New arrangement?
2.where and how can i get the basis for computation of both arrangement? 3.would it be wise to just ignored the old arrangement as other exited staff had been paid prior to this time?
From Nigeria
Hi Stanley
Sub- computation of gratuity
What I understand is that your company has gratuity scheme prior to coming into force of the Gartuity Act 1972 under which gratuity become spayable after a servic eof ten years and where as unde rthe gartuity Act, it is payable after a service of 5 years only and your dilemma is which procedure is to be followed.
My view is as under :
1) you can calculate gratuity under 10 year formula for the employees whose service is between 1991 to 2011 if it is benefcial to them in it's over all terms and conditions since the Gratuity Act protects any existing scheme with better terms or to avoid any conflict with the Act, you can calculate gartuity for them both under 10-year (old) and 5-year(Act)formula and pay them gratuity according to the formula which is more beneficial to them.
2) With regard to the employees with service between 1992 to 2011, you can calculate gratuity unde rthe 5- year formula as per the Gartuity Act since unde rthe 10-year formula they are not eligible for gratuity and the Gratuity Act overrides any schmeme if the scheme is not beneficial to an employee or a class of employees.
B.Saikumar
HR & labour Law Consultant
Chipinbiz Consultancy Pvt.ltd
Mumbai
022-28324234
From India, Mumbai
54Sub- computation of gratuity
What I understand is that your company has gratuity scheme prior to coming into force of the Gartuity Act 1972 under which gratuity become spayable after a servic eof ten years and where as unde rthe gartuity Act, it is payable after a service of 5 years only and your dilemma is which procedure is to be followed.
My view is as under :
1) you can calculate gratuity under 10 year formula for the employees whose service is between 1991 to 2011 if it is benefcial to them in it's over all terms and conditions since the Gratuity Act protects any existing scheme with better terms or to avoid any conflict with the Act, you can calculate gartuity for them both under 10-year (old) and 5-year(Act)formula and pay them gratuity according to the formula which is more beneficial to them.
2) With regard to the employees with service between 1992 to 2011, you can calculate gratuity unde rthe 5- year formula as per the Gartuity Act since unde rthe 10-year formula they are not eligible for gratuity and the Gratuity Act overrides any schmeme if the scheme is not beneficial to an employee or a class of employees.
B.Saikumar
HR & labour Law Consultant
Chipinbiz Consultancy Pvt.ltd
Mumbai
022-28324234
From India, Mumbai
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Gratuity computation(1). xls