Dear All,
I had worked in CPSE/PSU HIL from 19.10.2016 to 23.08.2021 under the management cadre where I was responsible for state business. My total service tenure was 4 years and 310 days. In my company, we had over 400 employees, with 80 under the management cadre. However, HR is now refusing to pay the gratuity, citing the Gratuity Rule of 1972 and CPSE/PSU guidelines which require a minimum of 5 years of service. As I have switched to a job in the private industry, the gratuity cannot be transferred. The amount in question is approximately 1.90 lakh, which is significant for me. Should I file a case or let it go? Please advise.
From India, Bhubaneswar
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I had worked in CPSE/PSU HIL from 19.10.2016 to 23.08.2021 under the management cadre where I was responsible for state business. My total service tenure was 4 years and 310 days. In my company, we had over 400 employees, with 80 under the management cadre. However, HR is now refusing to pay the gratuity, citing the Gratuity Rule of 1972 and CPSE/PSU guidelines which require a minimum of 5 years of service. As I have switched to a job in the private industry, the gratuity cannot be transferred. The amount in question is approximately 1.90 lakh, which is significant for me. Should I file a case or let it go? Please advise.
From India, Bhubaneswar
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Dear Suryakanth,
It is well settled as per the ratio decidendi of the judgment of Madras High Court in Mettur Beardsell Ltd v Central Appellate Authority under the PG Act that if the employee has completed 240 days of continuous service in the fifth year, he is eligible to claim gratuity.
Therefore, if the service details provided in your post are correct, then the contention of your HR cannot be accepted. No guidelines of an organization can run counter to any judicial precedent laid down on the same issue.
Gratuity of a particular spell of accrued service in one organization cannot be transferred to another on the exit of the employee unless there is a bilateral agreement between the organizations and the exit is a transfer of service.
Try to explain the above legal position to the HR. Still if he holds on to his stand and you are denied gratuity, file a claim for gratuity with interest and costs before the Controlling Authority under the PG Act, 1972 where the previous establishment is situated.
From India, Salem
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6185It is well settled as per the ratio decidendi of the judgment of Madras High Court in Mettur Beardsell Ltd v Central Appellate Authority under the PG Act that if the employee has completed 240 days of continuous service in the fifth year, he is eligible to claim gratuity.
Therefore, if the service details provided in your post are correct, then the contention of your HR cannot be accepted. No guidelines of an organization can run counter to any judicial precedent laid down on the same issue.
Gratuity of a particular spell of accrued service in one organization cannot be transferred to another on the exit of the employee unless there is a bilateral agreement between the organizations and the exit is a transfer of service.
Try to explain the above legal position to the HR. Still if he holds on to his stand and you are denied gratuity, file a claim for gratuity with interest and costs before the Controlling Authority under the PG Act, 1972 where the previous establishment is situated.
From India, Salem
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Dear Sir Umakanthan.M,
Thank you for your valuable suggestion. In this regard, I have already shared the judgment of the Madras High Court. However, HR is saying that it is applicable in the case of workmen but not applicable in the case of management staff. Is that correct, or does he lack sufficient knowledge? Kindly guide me on what action I should take now.
Thanks
From India, Bhubaneswar
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Thank you for your valuable suggestion. In this regard, I have already shared the judgment of the Madras High Court. However, HR is saying that it is applicable in the case of workmen but not applicable in the case of management staff. Is that correct, or does he lack sufficient knowledge? Kindly guide me on what action I should take now.
Thanks
From India, Bhubaneswar
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Dear Sir,
There is no such distinction of worker and manager in the PG Act. It defines only 'employee'. It appears that the organization wishes to avoid liability. In such a case, you may approach the authority as suggested.
From India, Hyderabad
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There is no such distinction of worker and manager in the PG Act. It defines only 'employee'. It appears that the organization wishes to avoid liability. In such a case, you may approach the authority as suggested.
From India, Hyderabad
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Dear Colleague,
As briefed by our colleagues, under the circumstances that despite your repeated representation, if still your organization is not open to understanding and settling your Gratuity:
Step 1: Request your HR to discuss with the Local Controlling Authority under the Payment of Gratuity (Deputy Commissioner of Labour - Controlling Authority appointed under the Payment of Gratuity Act 1972) for clarity on the legal stand.
Step 2: If they are unwilling to discuss with the mentioned Authority, then you should meet the Controlling Authority under the Payment of Gratuity - Deputy Commissioner of Labour (Controlling Authority appointed under the Payment of Gratuity Act 1972) and present your side. Normally, they will contact HR to resolve the issue.
Further, if necessary, based on merits, the Authority may request you to file Forms under the Act and conduct an official hearing to determine if the Management should pay gratuity if they are satisfied that you are eligible under the Law.
All the Best, God Bless.
Dr. P. Sivakumar
Doctor Siva Global HR
Tamil Nadu
From India, Chennai
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As briefed by our colleagues, under the circumstances that despite your repeated representation, if still your organization is not open to understanding and settling your Gratuity:
Step 1: Request your HR to discuss with the Local Controlling Authority under the Payment of Gratuity (Deputy Commissioner of Labour - Controlling Authority appointed under the Payment of Gratuity Act 1972) for clarity on the legal stand.
Step 2: If they are unwilling to discuss with the mentioned Authority, then you should meet the Controlling Authority under the Payment of Gratuity - Deputy Commissioner of Labour (Controlling Authority appointed under the Payment of Gratuity Act 1972) and present your side. Normally, they will contact HR to resolve the issue.
Further, if necessary, based on merits, the Authority may request you to file Forms under the Act and conduct an official hearing to determine if the Management should pay gratuity if they are satisfied that you are eligible under the Law.
All the Best, God Bless.
Dr. P. Sivakumar
Doctor Siva Global HR
Tamil Nadu
From India, Chennai
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Dear Suryakant,
What your HR is saying is a fact because you have not completed five years of service. The Madras High Court judgment is case-specific, so it cannot be a wholesome rule.
To claim your gratuity, you should lodge a complaint before the controlling authority for non-payment of gratuity by your employer. In another scenario, you can file a case in the Odisha High Court for the same.
From India, Mumbai
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What your HR is saying is a fact because you have not completed five years of service. The Madras High Court judgment is case-specific, so it cannot be a wholesome rule.
To claim your gratuity, you should lodge a complaint before the controlling authority for non-payment of gratuity by your employer. In another scenario, you can file a case in the Odisha High Court for the same.
From India, Mumbai
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Its true as per the judgement of Madras High-court if a employee has completed 4 year 240 days then he is eligible for Gratuity. It is applicable to all employees whether staff / worker
From India, Hyderabad
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From India, Hyderabad
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Madras HC judg regarding gratuity is applicable if workmen is working 4 years 240 days..pdf