Dear members,
Can I give the gratuity amount every year to staff even if they have completed 7 years in the factory? Or if the management is not interested in giving the gratuity amount to staff, how should I proceed?
Please help.
From India, Kanpur
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Can I give the gratuity amount every year to staff even if they have completed 7 years in the factory? Or if the management is not interested in giving the gratuity amount to staff, how should I proceed?
Please help.
From India, Kanpur
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Query not clear. Giving gratuity every year and gratuity under Payment of Gratuity Act are 2 different things.
From India, Pune
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3251From India, Pune
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Dear Vikas,
I am also at a loss to understand your question. What you mean is probably whether gratuity can be paid by the employer periodically on completion of every year of service in the establishment.
First, you have to understand that gratuity is not a gratuitous payment made by the employer, nor does the employee have any rightful claim to gratuity while still in service. Even if you entice the employee to accept such periodical payment through any bilateral settlement, it would be null and void due to the overriding effect of the Payment of Gratuity Act, 1972, as provided for in its sec. 14. This act is a complete code in itself regarding the subject of gratuity. Even if the employee accepts periodical payment out of ignorance or pecuniary compulsions, it amounts to "contracting out," a concept explicitly or impliedly prohibited under labor laws.
Second, gratuity is a one-time lump sum payment upon termination of employment for reasons explicitly mentioned in the P.G Act, 1972, based on the length of service and last drawn wages. It serves as a statutory social security measure for industrial employment.
Therefore, avoid entertaining ideas to circumvent your statutory obligations as an employer.
From India, Salem
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I am also at a loss to understand your question. What you mean is probably whether gratuity can be paid by the employer periodically on completion of every year of service in the establishment.
First, you have to understand that gratuity is not a gratuitous payment made by the employer, nor does the employee have any rightful claim to gratuity while still in service. Even if you entice the employee to accept such periodical payment through any bilateral settlement, it would be null and void due to the overriding effect of the Payment of Gratuity Act, 1972, as provided for in its sec. 14. This act is a complete code in itself regarding the subject of gratuity. Even if the employee accepts periodical payment out of ignorance or pecuniary compulsions, it amounts to "contracting out," a concept explicitly or impliedly prohibited under labor laws.
Second, gratuity is a one-time lump sum payment upon termination of employment for reasons explicitly mentioned in the P.G Act, 1972, based on the length of service and last drawn wages. It serves as a statutory social security measure for industrial employment.
Therefore, avoid entertaining ideas to circumvent your statutory obligations as an employer.
From India, Salem
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To ensure amount of payment of gratuity and to reduce the load at the end you may approach LIC of India for Gratuity scheme there you can pay some amount monthly.
From India, Pune
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From India, Pune
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Dear Mr. Vikas,
How did you come up with the idea of paying gratuity "every year to staff even after they have completed 7 years in the factory"? If you proceed with this, it would be in contravention of the "Payment of Gratuity Act, 1972". If any of your staff members leave the company, either by resignation or termination, after the stipulated period under the Act, they are entitled to receive a lump sum gratuity amount. Even the Court of Law cannot seize the gratuity amount.
Thank you.
From India, Aizawl
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How did you come up with the idea of paying gratuity "every year to staff even after they have completed 7 years in the factory"? If you proceed with this, it would be in contravention of the "Payment of Gratuity Act, 1972". If any of your staff members leave the company, either by resignation or termination, after the stipulated period under the Act, they are entitled to receive a lump sum gratuity amount. Even the Court of Law cannot seize the gratuity amount.
Thank you.
From India, Aizawl
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