I am new to this forum and would like to have one clarification.
Grautity is paid to an employee who completes 5 continous years of service in an company. Also, Grautity is the liability of the employer and the employee does not have to contribute for it. Nowadays company adds the Grautity in the CTC to increase the CTC amount.
My question is that when Grautity is not paid each month then the Grautity amount which is shown in the CTC breakup, will it be paid each month to the employee. If yes, then will that not mean that each month Grautity is been paid to the employee from the beginning and will that employee not be paid any gratuity after 5 years of service (on resignation or termination). If no, then will that Grautity amt be deducted from the employees salary each month even though employee does not have to contribute for it.
Please clarify and assist.
From India, Mumbai
Grautity is paid to an employee who completes 5 continous years of service in an company. Also, Grautity is the liability of the employer and the employee does not have to contribute for it. Nowadays company adds the Grautity in the CTC to increase the CTC amount.
My question is that when Grautity is not paid each month then the Grautity amount which is shown in the CTC breakup, will it be paid each month to the employee. If yes, then will that not mean that each month Grautity is been paid to the employee from the beginning and will that employee not be paid any gratuity after 5 years of service (on resignation or termination). If no, then will that Grautity amt be deducted from the employees salary each month even though employee does not have to contribute for it.
Please clarify and assist.
From India, Mumbai
Dear Archana,
Question is little bit confused. But as per my understanding let me clear it.
Gratuity is a statutory contribution & even though it is mentioned in CTC break up its not directly paid to employee on month basis. It is contributed on the name of employee to Gratuity Act(LIC). Only the regular employee who completed continuous service for 4 years & 240 days is eligible for gratuity(only at the time of leaving Organization either resign or retire).
If the given answer is not addressing your query give me clarification in your question.
From India, Hyderabad
5Question is little bit confused. But as per my understanding let me clear it.
Gratuity is a statutory contribution & even though it is mentioned in CTC break up its not directly paid to employee on month basis. It is contributed on the name of employee to Gratuity Act(LIC). Only the regular employee who completed continuous service for 4 years & 240 days is eligible for gratuity(only at the time of leaving Organization either resign or retire).
If the given answer is not addressing your query give me clarification in your question.
From India, Hyderabad
Hi,
Thank you for your reply. I completely agree with you.
I just want to know that if in an employees CTC breakup grautity is mentioned and if that employee leaves the organization before 5 years of service, then in that case whether the company will pay the employee the grautity amount that the company has contributed on the name of the employee to Grautity Act.
Because in this scenario the employee has not completed 5 years of continous service but still from his CTC a monthly grautity amount has been kept by the company in his name to the Grautity Act.
If the company pays the grautity amt when the employee leaves either after 5 years or before that, then its ok. But if not then is the employee not at loss as he is losing out on the money which was promised to him in his CTC break up.
Regards
Rachana Shetty
From India, Mumbai
Thank you for your reply. I completely agree with you.
I just want to know that if in an employees CTC breakup grautity is mentioned and if that employee leaves the organization before 5 years of service, then in that case whether the company will pay the employee the grautity amount that the company has contributed on the name of the employee to Grautity Act.
Because in this scenario the employee has not completed 5 years of continous service but still from his CTC a monthly grautity amount has been kept by the company in his name to the Grautity Act.
If the company pays the grautity amt when the employee leaves either after 5 years or before that, then its ok. But if not then is the employee not at loss as he is losing out on the money which was promised to him in his CTC break up.
Regards
Rachana Shetty
From India, Mumbai
Sir i pls reply my query
My Father works as D.E.eng.in GEB,Against him ACB case filed in 1998.he was loss case in court 2005,Dept terminate him 2005.after termination of 10 days he was dead due to cancer.
we have received P.F.form dept.but Gratuity not given to us.so pls tell me that we can eligible to get gratuity if employee terminated due to ACB court case?
From Netherlands
My Father works as D.E.eng.in GEB,Against him ACB case filed in 1998.he was loss case in court 2005,Dept terminate him 2005.after termination of 10 days he was dead due to cancer.
we have received P.F.form dept.but Gratuity not given to us.so pls tell me that we can eligible to get gratuity if employee terminated due to ACB court case?
From Netherlands
Dear Rachana Shetty,
CTC stands for Cost to the company incurred for that particular job. Company has to fix that this much of amount has to be spent on this particular person/Job, to arrive their liability limit.
The monthly contribution of 4.81% from your basic is to be accumulated till your services with the organisation. But you are eligible to get it only on completion of 5 years of services.
This calculation is made to enter the liability of the company through books of account as a provision for future use.. The fund is a book value and not to be deposited with any where including the Gratuity act as you mentioned. As like this the provision for Bonus also be given at the beginning of every FY.
Just imagine the financial commitment of a company when 20-30 employees leaving their jobs after more than 5 years of services? . The provision for gratuity will helps the company in the situation like this.
Hope I made it clear!
S.Sethupathy
Excellent HR Services.
From India, Coimbatore
CTC stands for Cost to the company incurred for that particular job. Company has to fix that this much of amount has to be spent on this particular person/Job, to arrive their liability limit.
The monthly contribution of 4.81% from your basic is to be accumulated till your services with the organisation. But you are eligible to get it only on completion of 5 years of services.
This calculation is made to enter the liability of the company through books of account as a provision for future use.. The fund is a book value and not to be deposited with any where including the Gratuity act as you mentioned. As like this the provision for Bonus also be given at the beginning of every FY.
Just imagine the financial commitment of a company when 20-30 employees leaving their jobs after more than 5 years of services? . The provision for gratuity will helps the company in the situation like this.
Hope I made it clear!
S.Sethupathy
Excellent HR Services.
From India, Coimbatore
Dear Vijay,
ACB (Anti-Corruption Bureau) cases viewed under this Clause of Gratuity Act
"The gratuity. Payable to an employee could be forfeited for willful omission or negligence
causing damage, loss or destruction of employers property
and for riotous and disorderly conduct and for offense/misconducts involving moral turpitude"
When your father lost the case means he has no right to claim the gratuity.
S.Sethupathy,
Excellent HR Services.
From India, Coimbatore
ACB (Anti-Corruption Bureau) cases viewed under this Clause of Gratuity Act
"The gratuity. Payable to an employee could be forfeited for willful omission or negligence
causing damage, loss or destruction of employers property
and for riotous and disorderly conduct and for offense/misconducts involving moral turpitude"
When your father lost the case means he has no right to claim the gratuity.
S.Sethupathy,
Excellent HR Services.
From India, Coimbatore
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.