Dear All,
Please help me understand the Gratuity payment in the following case: An employer has two companies. An employee has worked with the first company for 3 years and received his full and final amount, then joined the employer's second company and worked there for more than 2.5 years. Will he be entitled to gratuity for continuous service under the same employer?
Regards,
Sandeep
From India, Mumbai
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Please help me understand the Gratuity payment in the following case: An employer has two companies. An employee has worked with the first company for 3 years and received his full and final amount, then joined the employer's second company and worked there for more than 2.5 years. Will he be entitled to gratuity for continuous service under the same employer?
Regards,
Sandeep
From India, Mumbai
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Dear Sandeep in my view the employee is not entitle for gratuity as his services were not transferred from one company to other and he has taken full and final in earlier company and joined again
From India, Delhi
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174From India, Delhi
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Thank you for your reply, Malik Sir.
I was reading about frequently asked questions on gratuity. An employee is eligible for their continuous service under the same employer. Sir, there is not a detailed clarification in the rules of gratuity, so it depends on the situation.
Regards,
Sandeep
From India, Mumbai
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I was reading about frequently asked questions on gratuity. An employee is eligible for their continuous service under the same employer. Sir, there is not a detailed clarification in the rules of gratuity, so it depends on the situation.
Regards,
Sandeep
From India, Mumbai
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You are not eligible for gratuity. Maybe of the same group, but legally both the entities are different.
About your doubt, "is not detailed clarification in the rule of gratuity," the company law cannot be part of the Payment of Gratuity Act. You may have to refer to the definition of employer, as provided in Section 2(f) of the Payment of the Gratuity Act. Even for that purpose, two different controlling/recruiting authorities in two different companies can be termed as two different employers. Legally, a company is an artificial person who is deemed to be your employer. So, two different persons (companies) cannot be your employer simultaneously.
From India, Delhi
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About your doubt, "is not detailed clarification in the rule of gratuity," the company law cannot be part of the Payment of Gratuity Act. You may have to refer to the definition of employer, as provided in Section 2(f) of the Payment of the Gratuity Act. Even for that purpose, two different controlling/recruiting authorities in two different companies can be termed as two different employers. Legally, a company is an artificial person who is deemed to be your employer. So, two different persons (companies) cannot be your employer simultaneously.
From India, Delhi
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Dear All,
An employee worked in two companies, and the employer (the director, one of the partners, or the proprietor) is one and the same. On the condition that the services of the said employee are undisturbed and transferred to the second company, it means that even if the Full and Final settlement is cleared other than gratuity, the said employee is entitled to gratuity. This entitlement applies under the condition that the second company of the promoter is an expansion of the business, and for administrative reasons only, the employee in question was given a transfer.
From India, Chennai
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An employee worked in two companies, and the employer (the director, one of the partners, or the proprietor) is one and the same. On the condition that the services of the said employee are undisturbed and transferred to the second company, it means that even if the Full and Final settlement is cleared other than gratuity, the said employee is entitled to gratuity. This entitlement applies under the condition that the second company of the promoter is an expansion of the business, and for administrative reasons only, the employee in question was given a transfer.
From India, Chennai
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If the same employer and different companies, once settlement is received and the individual joins another entity, it will be considered as new employment. If the same employer provides a transfer letter stating that the previous entity's service will be carried forward, then the eligibility requirements are met.
From India, Chennai
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From India, Chennai
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The new discussion of gratuity is that the one principal employer engages one (same) employee for two years under one contractor and for another three years under another contractor. At the end of the 5th year, both the contractors are not in an obligation to deliver his gratuity, saying that his tenure in each one's contract was less than 5 years. In this context, it is the duty of the principal employer, since the employee has worked for the same principal employer for the entire 5 years of tenure, to disburse the gratuity. Anyone with a different opinion, please share.
From India, Chennai
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From India, Chennai
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Some of the PEs (Principal Employers) are escaping from the context of the continuing service clause of the Gratuity Act by engaging contract laborers for a period of one year or less than two years at a single contract. They give them a reasonable break in service for a period of 30 to 120 days and then engage them again (not terming it as an appointment, employment, job, or duty but as an engagement) by another contractor for a subsequent period of two years and so on.
As a result, graduates, engineering graduates, and diploma holders are unable to secure permanent employment.
We need to discuss this subject in detail to find a solution.
In my view, the majority of the CTC structures include a gratuity component of 4.81% of CTC, which is not paid at the end of each year or at the end of the employment tenure if it occurs before completing five years of service, as per the Gratuity Act. If this is the case, why is the gratuity structure included in the annual CTC, knowing that most employees change jobs well before completing five years? If PEs are more concerned about their funds and financial issues, they could consider joining a group gratuity scheme by depositing the gratuity payable as an annual premium and linking the gratuity with life insurance companies. Despite this option, PEs seem very intent on finding ways to avoid gratuity payments. Why is there this trend among PEs? If paying gratuity is the only way to address their financial constraints, let's discuss and find a mutually acceptable solution.
From India, Chennai
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As a result, graduates, engineering graduates, and diploma holders are unable to secure permanent employment.
We need to discuss this subject in detail to find a solution.
In my view, the majority of the CTC structures include a gratuity component of 4.81% of CTC, which is not paid at the end of each year or at the end of the employment tenure if it occurs before completing five years of service, as per the Gratuity Act. If this is the case, why is the gratuity structure included in the annual CTC, knowing that most employees change jobs well before completing five years? If PEs are more concerned about their funds and financial issues, they could consider joining a group gratuity scheme by depositing the gratuity payable as an annual premium and linking the gratuity with life insurance companies. Despite this option, PEs seem very intent on finding ways to avoid gratuity payments. Why is there this trend among PEs? If paying gratuity is the only way to address their financial constraints, let's discuss and find a mutually acceptable solution.
From India, Chennai
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Dear Sir(s),
This is a complex problem that has cropped up due to MBA (HR) + C.A. attached with a big group of companies under a single powerful/popular/influential/experienced industrialist like Ambani, Tata, etc. Of course, such industrialists promote new companies under their banner but bifurcate all units, and the controlling unit does not allow to club units interchangeably for financial and/or general administrative purposes. Thus, they keep their group intact but with independent units.
Until and unless the situation is legally addressed and the ambit of terminal benefits is spread to the extent of inter-unit transfers, the employee will be deprived of benefits like gratuity and other benefits. However, the Ministry of Law, Ministry of HR, and Chamber of Commerce jointly can seek an amicable solution. But it needs empathy, sympathy, and concern with employees which is presently lacking.
G.P. Agarwal, Lucknow
8009458901
From India, undefined
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This is a complex problem that has cropped up due to MBA (HR) + C.A. attached with a big group of companies under a single powerful/popular/influential/experienced industrialist like Ambani, Tata, etc. Of course, such industrialists promote new companies under their banner but bifurcate all units, and the controlling unit does not allow to club units interchangeably for financial and/or general administrative purposes. Thus, they keep their group intact but with independent units.
Until and unless the situation is legally addressed and the ambit of terminal benefits is spread to the extent of inter-unit transfers, the employee will be deprived of benefits like gratuity and other benefits. However, the Ministry of Law, Ministry of HR, and Chamber of Commerce jointly can seek an amicable solution. But it needs empathy, sympathy, and concern with employees which is presently lacking.
G.P. Agarwal, Lucknow
8009458901
From India, undefined
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