One of our employees has completed 6 years with our company and has resigned and been relieved by the company. There is no gratuity policy in our company, but after receiving the relieving letter, the employee is asking for gratuity. Can anyone suggest what we should do in such a matter, as I don't have much knowledge of gratuity? Please help me out with a suitable answer.
From India, Noida
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1From India, Noida
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Whether you have taken Gratuity Policy or not is not the criteria for Gratuity. Gratuity is payable when (1) The Act is applicable to you; and (2) The employee who left you has completed 5 years and more.
In the absence of Gratuity Policy, you have to absorb your liability to pay Gratuity from your company account.
From India, Mumbai
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In the absence of Gratuity Policy, you have to absorb your liability to pay Gratuity from your company account.
From India, Mumbai
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Kindly read the Payment of Gratuity Act 1972 and rules first. Then you will get some basic idea. Further queries will arise and then experts here will try to assist. How many employees do you have?
From India, Pune
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From India, Pune
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Gratuity is eligible for employees after completing 5 years, and it will be calculated based on the last drawn salary which includes basic pay + DA multiplied by the number of years worked, then multiplied by 15/26.
Regards,
Sathya
NI Consulting Services Private Limited
81, Peters Road,
Royapettah
Chennai-600014
9841874747
9884691063
From India, Chennai
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Regards,
Sathya
NI Consulting Services Private Limited
81, Peters Road,
Royapettah
Chennai-600014
9841874747
9884691063
From India, Chennai
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One more point... If the company has less than 10 employees, gratuity does not apply
From India, Mumbai
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From India, Mumbai
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An employee will be covered under the Act if the organization employs at least 10 persons on a single day in the preceding 12 months. Once an organization comes under the purview of the Gratuity Act, it will always remain covered even if the number of employees falls below 10.
Thank you.
From India, Chennai
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Thank you.
From India, Chennai
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Dear Vasu,
It may be difficult to accept that your company is not covered under gratuity or that gratuity is not applicable to workmen. There are two scenarios where gratuity would not apply:
(i) if the establishment does not have the minimum number of workmen, or
(ii) if it is exempted by the appropriate Government (although this is unlikely).
Please verify if your establishment falls under either of these categories. If not, then the workmen are entitled to gratuity. Failure to comply may result in legal complications.
Thank you.
From India, Mumbai
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It may be difficult to accept that your company is not covered under gratuity or that gratuity is not applicable to workmen. There are two scenarios where gratuity would not apply:
(i) if the establishment does not have the minimum number of workmen, or
(ii) if it is exempted by the appropriate Government (although this is unlikely).
Please verify if your establishment falls under either of these categories. If not, then the workmen are entitled to gratuity. Failure to comply may result in legal complications.
Thank you.
From India, Mumbai
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