Hi All,
One of my relatives was working in a socks manufacturing unit where he was shown on the payroll as a manager for the last 17 years. The company provided free accommodation to him and his family on the top floor. He was receiving a salary of Rs. 6000 per month only. The company closed in April, and now they are demanding rent from him for the entire 17 years.
Can you suggest if he is liable for gratuity? If yes, then what are the terms, or please help me in sorting out this situation.
Daisy Singh
Email: daisysingh2008@gmail.com
From India, Delhi
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2One of my relatives was working in a socks manufacturing unit where he was shown on the payroll as a manager for the last 17 years. The company provided free accommodation to him and his family on the top floor. He was receiving a salary of Rs. 6000 per month only. The company closed in April, and now they are demanding rent from him for the entire 17 years.
Can you suggest if he is liable for gratuity? If yes, then what are the terms, or please help me in sorting out this situation.
Daisy Singh
Email: daisysingh2008@gmail.com
From India, Delhi
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Dear Mr. Daisy Singh,
From the post, it appears that the company is demanding rent just to avoid liability of gratuity. For a rent claim, a rent agreement or some proof is required. You were residing on the top of the factory premises which cannot be termed as residential premises. Moreover, you were employed there for the last 17 years, and an employee in the factory cannot be a tenant.
In a nutshell, in a rent claim, the relationship of tenant and landlord needs to be established first, and then the question of payment of rent arises just like for a claim of salary, the relationship of employee and employer is necessary. Further, back payment can be claimed only for 3 years.
Hence, don't fear and file a claim for gratuity.
Thanks,
V K Gupta
From India, Panipat
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From the post, it appears that the company is demanding rent just to avoid liability of gratuity. For a rent claim, a rent agreement or some proof is required. You were residing on the top of the factory premises which cannot be termed as residential premises. Moreover, you were employed there for the last 17 years, and an employee in the factory cannot be a tenant.
In a nutshell, in a rent claim, the relationship of tenant and landlord needs to be established first, and then the question of payment of rent arises just like for a claim of salary, the relationship of employee and employer is necessary. Further, back payment can be claimed only for 3 years.
Hence, don't fear and file a claim for gratuity.
Thanks,
V K Gupta
From India, Panipat
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Dear Mr. Gupta,
Thank you for your prompt reply. The company is not registered under any labor law act but is registered for sales tax. Can he still be eligible for gratuity, and if so, how would it be calculated?
I look forward to your response.
Best regards,
Daisy Singh
From India, Delhi
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Thank you for your prompt reply. The company is not registered under any labor law act but is registered for sales tax. Can he still be eligible for gratuity, and if so, how would it be calculated?
I look forward to your response.
Best regards,
Daisy Singh
From India, Delhi
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Dear Mr. Singh,
The matter has already been discussed on this forum, and you can search for it. If you are not well-informed, please consider engaging a professional to do so. Further examination of the matter in response to your query requires additional information such as the number of persons employed year-wise to check applicability, etc.
Thanks,
V K. Gupta
From India, Panipat
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The matter has already been discussed on this forum, and you can search for it. If you are not well-informed, please consider engaging a professional to do so. Further examination of the matter in response to your query requires additional information such as the number of persons employed year-wise to check applicability, etc.
Thanks,
V K. Gupta
From India, Panipat
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The Hon. Supreme Court, in the case Jaswant Singh Gill v. Bharat Coking Coal Ltd (2007), has held that internal rules of the company providing for the deduction of dues to the employer from the gratuity payable to employees are against Section 6 of the Payment of Gratuity Act.
However, there are now some High Court decisions holding that the recoveries for which the employees have agreed in writing can be made from gratuity.
Varghese Mathew
From India, Thiruvananthapuram
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However, there are now some High Court decisions holding that the recoveries for which the employees have agreed in writing can be made from gratuity.
Varghese Mathew
From India, Thiruvananthapuram
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Dear Mr. Singh,
I agree with Sh V K. Gupta that for further examining the matter, much more information shall be required pertaining to the socks manufacturing unit, such as the number of persons employed year-wise, location, etc. Therefore, it is better to engage a professional to help you in obtaining the claim for your gratuity. As you mentioned that the company is not registered under any labor law/act, it is important to note that merely not being registered under any labor law will not be of help to the employer; in fact, it may lead to further trouble.
Since you are a member of Cite HR from Delhi, I presume that the location of the socks manufacturing unit must be in Delhi, as the employer should have registered under the Delhi Shop & Establishment Rules. All shops and establishments are covered under the Payment of Gratuity Act, 1972. The same analogy shall apply in your case even if the location of the socks manufacturing unit is different. It is essential to note that the issues of the gratuity payment claim and rent recovery are distinct matters, thus involving different jurisdictions and authorities.
If your relative possesses documentary proof of his employment, salary details, etc., it will facilitate an early settlement of the claim. On the other hand, it will be challenging for the employer to prove the tenancy of the house given to your relative without any pre-condition and in his interest.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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I agree with Sh V K. Gupta that for further examining the matter, much more information shall be required pertaining to the socks manufacturing unit, such as the number of persons employed year-wise, location, etc. Therefore, it is better to engage a professional to help you in obtaining the claim for your gratuity. As you mentioned that the company is not registered under any labor law/act, it is important to note that merely not being registered under any labor law will not be of help to the employer; in fact, it may lead to further trouble.
Since you are a member of Cite HR from Delhi, I presume that the location of the socks manufacturing unit must be in Delhi, as the employer should have registered under the Delhi Shop & Establishment Rules. All shops and establishments are covered under the Payment of Gratuity Act, 1972. The same analogy shall apply in your case even if the location of the socks manufacturing unit is different. It is essential to note that the issues of the gratuity payment claim and rent recovery are distinct matters, thus involving different jurisdictions and authorities.
If your relative possesses documentary proof of his employment, salary details, etc., it will facilitate an early settlement of the claim. On the other hand, it will be challenging for the employer to prove the tenancy of the house given to your relative without any pre-condition and in his interest.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc