I wanted to know if a person carries Manager position, working in private firm, is he entitled for gratuity and retrenchment compensation being terminated after 8 years.
From India, Mumbai
Acknowledge(0)
Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Khalifath,
Briefly stated, "Gratuity" is a statutory one-time lump sum terminal benefit available to all employees irrespective of their status or salary on termination of employment, including death while in service, after rendering a minimum qualifying service of not less than 5 years of continuous service in an establishment. This establishment could be a factory, mine, oil field, plantation, port, railway company, or a shop or establishment employing or having employed 10 or more employees. It can also be any other establishment with 10 or more employees on roll if so notified by the Central Govt under the Payment of Gratuity Act, 1972. However, termination due to an employee's death while in service does not require the minimum qualifying service.
"Retrenchment Compensation," on the contrary, is a terminal benefit payable to an employee who falls within the definition of the term "workman" u/s 2(s) of the Industrial Disputes Act, 1947, as per section 25F of the Act when his services are terminated by the employer for reasons other than dismissal on disciplinary grounds, attaining the age of superannuation as mentioned in the contract of employment, non-renewal of the contract of employment on its expiry, or termination due to the continued ill health of the employee.
Therefore, a managerial cadre employee is eligible for gratuity on normal termination, whereas he is not entitled to retrenchment compensation when his services are terminated by his employer. However, if a notice clause of a certain duration pertaining to unilateral termination is fixed in the contract of employment of such an employee and the employer resorts to terminate the employee immediately, then the employee should be paid salary in lieu of notice for the said period.
From India, Salem
Acknowledge(0)Amend(0)
6185Briefly stated, "Gratuity" is a statutory one-time lump sum terminal benefit available to all employees irrespective of their status or salary on termination of employment, including death while in service, after rendering a minimum qualifying service of not less than 5 years of continuous service in an establishment. This establishment could be a factory, mine, oil field, plantation, port, railway company, or a shop or establishment employing or having employed 10 or more employees. It can also be any other establishment with 10 or more employees on roll if so notified by the Central Govt under the Payment of Gratuity Act, 1972. However, termination due to an employee's death while in service does not require the minimum qualifying service.
"Retrenchment Compensation," on the contrary, is a terminal benefit payable to an employee who falls within the definition of the term "workman" u/s 2(s) of the Industrial Disputes Act, 1947, as per section 25F of the Act when his services are terminated by the employer for reasons other than dismissal on disciplinary grounds, attaining the age of superannuation as mentioned in the contract of employment, non-renewal of the contract of employment on its expiry, or termination due to the continued ill health of the employee.
Therefore, a managerial cadre employee is eligible for gratuity on normal termination, whereas he is not entitled to retrenchment compensation when his services are terminated by his employer. However, if a notice clause of a certain duration pertaining to unilateral termination is fixed in the contract of employment of such an employee and the employer resorts to terminate the employee immediately, then the employee should be paid salary in lieu of notice for the said period.
From India, Salem
Acknowledge(0)Amend(0)
Sir,
Suppose an employee has worked for more than 20 years and resigned from service on 31/05/2019 and received his full and final settlement. However, he also wishes to make a Gratuity payment for the 20 years of service within a month from the date of leaving.
If the company is experiencing a poor financial situation and banks have issued a notice under NPA, what is the limitation period for the payment of his Gratuity under the act? Is it within a month, or is there no limitation for the payment of Gratuity?
From India, Gurgaon
Acknowledge(0)Amend(0)
Suppose an employee has worked for more than 20 years and resigned from service on 31/05/2019 and received his full and final settlement. However, he also wishes to make a Gratuity payment for the 20 years of service within a month from the date of leaving.
If the company is experiencing a poor financial situation and banks have issued a notice under NPA, what is the limitation period for the payment of his Gratuity under the act? Is it within a month, or is there no limitation for the payment of Gratuity?
From India, Gurgaon
Acknowledge(0)Amend(0)
Dear K.N. Jha,
I don't think that the issuance of an NPA notice by any bank would entitle an employer to postpone the payment of gratuity to their outgoing employees beyond the time limit specified under the PG Act, 1972. If they choose to do so, they automatically incur the liability of interest for the period of default, not exceeding the actual amount of gratuity due under the Act.
From India, Salem
Acknowledge(0)Amend(0)
I don't think that the issuance of an NPA notice by any bank would entitle an employer to postpone the payment of gratuity to their outgoing employees beyond the time limit specified under the PG Act, 1972. If they choose to do so, they automatically incur the liability of interest for the period of default, not exceeding the actual amount of gratuity due under the Act.
From India, Salem
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
Full n final settlement.doc
Final settlement - dubai.xls