Hi, I have a query regarding Gratuity. I was employed from 19-Jul-2012 to 28-Apr-2014 as a Fixed-Term Hire (Contractual employee). I was a full-time employee and received PF during this tenure. I ended that contract on 28-Apr-2014 and got a regular position starting 29-Apr-2014 in the same company (however, it was considered as a new appointment/contract, my employee ID changed) and served until 10-Aug-2017.
Will I be eligible for Gratuity? Can someone please provide me legal references that would explicitly cover the above situation under the Gratuity Act? I would highly appreciate any help.
Thanks, Salil J
From India, Bengaluru
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3Will I be eligible for Gratuity? Can someone please provide me legal references that would explicitly cover the above situation under the Gratuity Act? I would highly appreciate any help.
Thanks, Salil J
From India, Bengaluru
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To my mind, you are entitled to gratuity. Contract employees who work for more than five years are eligible for gratuity. In your case, you have more than 5 years of continuous service. You should submit a claim for gratuity and wait for a response. In the meantime, visit the labor officer of the area and also seek his opinion.
From India, Pune
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From India, Pune
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Hello Querist,
Referring to your queries, my submission is based on the best of my knowledge:
Section 2(A) is imperative to determine your uninterrupted continuous services for eligibility before moving to the conclusion. To provide accurate advice, I would need clarity from you on the following: What was your designation? Were you a workman or non-workman? If a workman, what are the provisions applicable in certified standing orders? What are the terms and conditions of your fixed-term appointment letter? Does your PF contribution go to the same account number for both the establishment and individual? Has the employer denied paying gratuity? If yes, on what grounds?
Based on the information provided, it appears that your case has substance to be taken forward with the controlling or appellate authority.
Regards,
Gajendra Verma
9929722054
From India
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Referring to your queries, my submission is based on the best of my knowledge:
Section 2(A) is imperative to determine your uninterrupted continuous services for eligibility before moving to the conclusion. To provide accurate advice, I would need clarity from you on the following: What was your designation? Were you a workman or non-workman? If a workman, what are the provisions applicable in certified standing orders? What are the terms and conditions of your fixed-term appointment letter? Does your PF contribution go to the same account number for both the establishment and individual? Has the employer denied paying gratuity? If yes, on what grounds?
Based on the information provided, it appears that your case has substance to be taken forward with the controlling or appellate authority.
Regards,
Gajendra Verma
9929722054
From India
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Hi, You are eligible for gratuity because you are working in same same company & you have already completed five years in same company.
From India, Haldwani
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From India, Haldwani
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Hi,
I don't think that you're eligible for gratuity because you started your career on July 19, 2012, as a contractual employee until April 28, 2014. It's around 1 year and 9 months of service. After that, you got a regular position from April 29, 2014, to August 10, 2017. After the confirmation of your service, you only completed 3 years and 4 months of service. According to the gratuity act, employees who have completed 5 years of service or employees who have completed 4 years and 240 working days are entitled to gratuity. So, before applying, please check and proceed to the next step.
Actually, you completed 5 years of service in one organization, but in the initial two years, you worked as a contractual employee. Therefore, that period will not be considered for gratuity. Only the service from the day your position was regularized until completing 5 years will be eligible for gratuity.
Regards,
B.L.V. Pavan
From India, Pune
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I don't think that you're eligible for gratuity because you started your career on July 19, 2012, as a contractual employee until April 28, 2014. It's around 1 year and 9 months of service. After that, you got a regular position from April 29, 2014, to August 10, 2017. After the confirmation of your service, you only completed 3 years and 4 months of service. According to the gratuity act, employees who have completed 5 years of service or employees who have completed 4 years and 240 working days are entitled to gratuity. So, before applying, please check and proceed to the next step.
Actually, you completed 5 years of service in one organization, but in the initial two years, you worked as a contractual employee. Therefore, that period will not be considered for gratuity. Only the service from the day your position was regularized until completing 5 years will be eligible for gratuity.
Regards,
B.L.V. Pavan
From India, Pune
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Hi Salil,
As per my knowledge, you will not be entitled to gratuity as you have not completed continuous service of five years (4 years + 6 months) as a contractual employee from 19-Jul-2012 to 28-Apr-2014 as a Fixed Term Hire.
You have mentioned that later it was considered a new appointment/contract (employee ID changed) and you served until 10-Aug-2017. If they issued fresh AL and the employee code has changed, then it means your previous contract has ended and fresh service has started. Hence, your new term for a continuous period will start from Aug 29, 2014. Your previous period of service can't be added for gratuity (legally) with your new appointment, whether it is in the same organization.
The PF number would also change as a new employee. They have to mention you as a "new employee."
Have they issued any letter to you stating that "as per your contract, the same has ended on ..............." and settled the account for the ended contract?
You may be eligible for gratuity if they had extended your contract without F&F settlement of the previous contract and continued PF contribution with the same number.
Regards,
Ashutosh
From India, Mumbai
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As per my knowledge, you will not be entitled to gratuity as you have not completed continuous service of five years (4 years + 6 months) as a contractual employee from 19-Jul-2012 to 28-Apr-2014 as a Fixed Term Hire.
You have mentioned that later it was considered a new appointment/contract (employee ID changed) and you served until 10-Aug-2017. If they issued fresh AL and the employee code has changed, then it means your previous contract has ended and fresh service has started. Hence, your new term for a continuous period will start from Aug 29, 2014. Your previous period of service can't be added for gratuity (legally) with your new appointment, whether it is in the same organization.
The PF number would also change as a new employee. They have to mention you as a "new employee."
Have they issued any letter to you stating that "as per your contract, the same has ended on ..............." and settled the account for the ended contract?
You may be eligible for gratuity if they had extended your contract without F&F settlement of the previous contract and continued PF contribution with the same number.
Regards,
Ashutosh
From India, Mumbai
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Dear friends,
Among the 5 learned members participating in this discussion so far, 2 members (Mr. Rao & Mr. VKS) are certainly in favor of the questioner's eligibility for gratuity under the Payment of Gratuity Act, 1972 for the entire service rendered by him under the same employer, including the Fixed Term Contract Service, while the remaining 2 (Mr. Pavan & Mr. Ashutosh) are not because of the different natures of the FTC service and the subsequent regular service, as well as the non-completion of the minimum qualifying continuous service stipulated under the Act by the questioner in either case; the 5th member Mr. Gajendra Verma has expressed his inconclusiveness based on the questions of whether the questioner was an employee and the change in the P.F number and therefore suggested to leave the matter to the decision of the Controlling Authority under the P.G. Act, 1972.
Therefore, let me also try and see whether I would be able to contribute something substantial to resolve the issue.
First and foremost, the Payment of Gratuity Act, 1972 is, in itself, a complete code for the matter of gratuity in respect of industrial employment. Therefore, it is independent of any other Labor Law except for the purpose of its application u/s 1(3) of the Act.
Similarly, the definition of the term "employee" u/s 2(e) of the Act, as it stands today, is a wholesome definition covering all people employed for hire or reward. There is no distinction in respect of the pattern of employment or method of payment or its quantum. What is important is that the person claiming gratuity under the Act should have been "employed" under a "Contract OF Service" and not "engaged" under a "Contract FOR Service". In essence, as per the observation of the honorable Patna High Court in Sukhandan Thakkur v. State of Bihar [ILR 35 Pat I], "employment means not only an appointment to any office for the first time but also the continuity of that appointment". It follows, therefore, a Fixed Term Contract of service is also a contract of service, and an FTC employee is also an employee under the Act as the three ingredients of the concept of employment viz., employer, employee, and the contract of employment are present without any doubt.
From 19-07-2012 to 28-04-2014, the questioner has worked as an FTC employee in the establishment; from 29-04-2014 to 10-08-2017, he has worked again in the same establishment. Actually, there is no break in service. Employee and Employer are being the same while the contract only got modified from that of a fixed contract to a perennial contract. As his entire length of service under both the contracts in the same establishment is more than 5 years, he is eligible for gratuity. If the employer refutes this proposition and refuses to pay him gratuity, the questioner can approach the Controlling Authority with a claim u/s 7 of the Act.
From India, Salem
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Among the 5 learned members participating in this discussion so far, 2 members (Mr. Rao & Mr. VKS) are certainly in favor of the questioner's eligibility for gratuity under the Payment of Gratuity Act, 1972 for the entire service rendered by him under the same employer, including the Fixed Term Contract Service, while the remaining 2 (Mr. Pavan & Mr. Ashutosh) are not because of the different natures of the FTC service and the subsequent regular service, as well as the non-completion of the minimum qualifying continuous service stipulated under the Act by the questioner in either case; the 5th member Mr. Gajendra Verma has expressed his inconclusiveness based on the questions of whether the questioner was an employee and the change in the P.F number and therefore suggested to leave the matter to the decision of the Controlling Authority under the P.G. Act, 1972.
Therefore, let me also try and see whether I would be able to contribute something substantial to resolve the issue.
First and foremost, the Payment of Gratuity Act, 1972 is, in itself, a complete code for the matter of gratuity in respect of industrial employment. Therefore, it is independent of any other Labor Law except for the purpose of its application u/s 1(3) of the Act.
Similarly, the definition of the term "employee" u/s 2(e) of the Act, as it stands today, is a wholesome definition covering all people employed for hire or reward. There is no distinction in respect of the pattern of employment or method of payment or its quantum. What is important is that the person claiming gratuity under the Act should have been "employed" under a "Contract OF Service" and not "engaged" under a "Contract FOR Service". In essence, as per the observation of the honorable Patna High Court in Sukhandan Thakkur v. State of Bihar [ILR 35 Pat I], "employment means not only an appointment to any office for the first time but also the continuity of that appointment". It follows, therefore, a Fixed Term Contract of service is also a contract of service, and an FTC employee is also an employee under the Act as the three ingredients of the concept of employment viz., employer, employee, and the contract of employment are present without any doubt.
From 19-07-2012 to 28-04-2014, the questioner has worked as an FTC employee in the establishment; from 29-04-2014 to 10-08-2017, he has worked again in the same establishment. Actually, there is no break in service. Employee and Employer are being the same while the contract only got modified from that of a fixed contract to a perennial contract. As his entire length of service under both the contracts in the same establishment is more than 5 years, he is eligible for gratuity. If the employer refutes this proposition and refuses to pay him gratuity, the questioner can approach the Controlling Authority with a claim u/s 7 of the Act.
From India, Salem
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Contract employees are entitled to gratuity if they work 5 years of continuous service. Here, the employee has worked as both a contract employee and a permanent employee. The total length of both services is more than 5 years. It is clear that gratuity is to be paid.
People are referring to PF contributions. Here, PF and gratuity have no connection. Secondly, concerning the change of employee ID, there will be a difference between the contractual employee ID and the employee ID, but it does not affect gratuity entitlement.
The employee should ask the company for gratuity, and if any issues arise, they should approach the Labor Commissioner of the area for assistance.
From India, Pune
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People are referring to PF contributions. Here, PF and gratuity have no connection. Secondly, concerning the change of employee ID, there will be a difference between the contractual employee ID and the employee ID, but it does not affect gratuity entitlement.
The employee should ask the company for gratuity, and if any issues arise, they should approach the Labor Commissioner of the area for assistance.
From India, Pune
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Respected forum members,
Apologies for posting a response late. I went through the various valuable opinions posted on this thread and appreciate your help. Mr. Umakanthan has nicely summarized the discussion and has also provided important information.
Mr. Umakanthan,
Sir, I have gone through your earlier posts on this forum and was hoping that you would opine on this thread too. Your response here is truly insightful and will certainly help me approach the Controlling Authority. Your interpretation of my case is accurate. Thanks a lot for your astute feedback!
Mr. Verma,
I think Mr. Umakanthan's post indirectly addresses your question (and he is right on all accounts), but for the sake of completion, I am trying to answer your questions here:
What was your designation? "Software Engineer".
Were you a workman or non-workman? "I was not a supervisor/manager, so I think I was a workman, please correct me if that is wrong".
If workman then what are the provisions applicable in certified standing orders? "I am a layman (computer science background), and am unable to answer this question :-)".
What are the T&C of your fixed-term appointment letter? "It enabled me for statutory benefits, if there is something specific I should point out, kindly let me know".
Does your PF contribution on the same account Number-Establishment and individual? Does the employer deny to pay gratuity? If yes, on what grounds? "No, PF account changed as well. Yes, the employer has denied gratuity, and here is the response received from them - We evaluated your request and reviewed the same in line with the legal team as well. We would like to inform you that the employment contracts for the period of services were different and your FTH contract was specific to a defined period. Hence on this background, the gratuity computation to consider the two different contract periods as a continuation cannot be considered."
Hope this helps. I believe that Mr. Umakanthan's response already covers these points, so at this point, I am not expecting any fresh responses unless any of the above answers change the interpretation of the matter.
Again, I appreciate the help I received from all of you.
Thanks,
Salil
From India, Bengaluru
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Apologies for posting a response late. I went through the various valuable opinions posted on this thread and appreciate your help. Mr. Umakanthan has nicely summarized the discussion and has also provided important information.
Mr. Umakanthan,
Sir, I have gone through your earlier posts on this forum and was hoping that you would opine on this thread too. Your response here is truly insightful and will certainly help me approach the Controlling Authority. Your interpretation of my case is accurate. Thanks a lot for your astute feedback!
Mr. Verma,
I think Mr. Umakanthan's post indirectly addresses your question (and he is right on all accounts), but for the sake of completion, I am trying to answer your questions here:
What was your designation? "Software Engineer".
Were you a workman or non-workman? "I was not a supervisor/manager, so I think I was a workman, please correct me if that is wrong".
If workman then what are the provisions applicable in certified standing orders? "I am a layman (computer science background), and am unable to answer this question :-)".
What are the T&C of your fixed-term appointment letter? "It enabled me for statutory benefits, if there is something specific I should point out, kindly let me know".
Does your PF contribution on the same account Number-Establishment and individual? Does the employer deny to pay gratuity? If yes, on what grounds? "No, PF account changed as well. Yes, the employer has denied gratuity, and here is the response received from them - We evaluated your request and reviewed the same in line with the legal team as well. We would like to inform you that the employment contracts for the period of services were different and your FTH contract was specific to a defined period. Hence on this background, the gratuity computation to consider the two different contract periods as a continuation cannot be considered."
Hope this helps. I believe that Mr. Umakanthan's response already covers these points, so at this point, I am not expecting any fresh responses unless any of the above answers change the interpretation of the matter.
Again, I appreciate the help I received from all of you.
Thanks,
Salil
From India, Bengaluru
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Fixed Term Contract Employees to get Gratuity.docx
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Fixed term employment.pdf