Hi all, I would like more information about the gratuity act. One of our employees has threatened to file a lawsuit against me if I don't give a gratuity. He has worked for exactly five years, but there has been a gap period in between during the coronavirus period. When he first joined the firm, he was a trainee, and after just two years, he was on role.
Since I am a new employee, I have given a five-year relieving letter without consulting the management. I am being reprimanded by management without any thought. Does he need to be given a gratuity? How do I get out of this dilemma? My error has caused the company to face this problem as well. We have not provided any ESI or PF for him, still his employee Code at Trainee only.
From India, Chennai
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Since I am a new employee, I have given a five-year relieving letter without consulting the management. I am being reprimanded by management without any thought. Does he need to be given a gratuity? How do I get out of this dilemma? My error has caused the company to face this problem as well. We have not provided any ESI or PF for him, still his employee Code at Trainee only.
From India, Chennai
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Hi,
If the employee continued for 5 years, then he/she is applicable for Gratuity irrespective of being a Trainee/on the rolls. Whether ESI/PF is deducted or not has nothing to do with Gratuity.
Referring to the gap period in between, during the corona period as mentioned in your post, what is it - did the employee leave without information and then join back again, or are you referring to the lockdown period?
From India, Madras
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1153If the employee continued for 5 years, then he/she is applicable for Gratuity irrespective of being a Trainee/on the rolls. Whether ESI/PF is deducted or not has nothing to do with Gratuity.
Referring to the gap period in between, during the corona period as mentioned in your post, what is it - did the employee leave without information and then join back again, or are you referring to the lockdown period?
From India, Madras
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I'm referring to the lockdown period, and we have not deducted any gratuity amount from his salary. I have completed my formalities by providing a relieving letter. Is it my fault to provide the relieving letter? Now, I'm being blamed for issuing the relieving letter.
From India, Chennai
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From India, Chennai
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Hi,
If the employee completes proper notice period as per the terms and conditions of employment, then a relieving letter should be given. It is not your fault. Even if the relieving letter was not provided, the employee has the option of appealing before the Assistant Commissioner of Labour for Gratuity.
Gratuity is to be paid by the employer, which is statutory, and the same should not be deducted from the salary of the employee.
From India, Madras
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If the employee completes proper notice period as per the terms and conditions of employment, then a relieving letter should be given. It is not your fault. Even if the relieving letter was not provided, the employee has the option of appealing before the Assistant Commissioner of Labour for Gratuity.
Gratuity is to be paid by the employer, which is statutory, and the same should not be deducted from the salary of the employee.
From India, Madras
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Since he voluntarily resigned, the management is hesitant to provide gratuity. How should I handle the situation? The employee has threatened to bring a lawsuit against the company in my name. Is there any other way to refuse gratuity? Kindly help me find a solution to this.
From India, Chennai
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From India, Chennai
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The Payment of Gratuity Act only states that if the employee has been in continuous "service" of not less than 5 years, the employer should pay gratuity. The word used is 'service' and not 'employed'. An employee on leave is still in service even though he is not employed. During the Covid-19 period, even if he has not worked, he should be considered in service. You have not given him a fresh Employee Number when his training period ended and he was confirmed. This confirms that he has been in continuous service. Additionally, the period other than the apprenticeship period (training as per the Apprentice Act 1961) should be deemed as the period of service for entitlement and gratuity calculation.
To be deemed as interrupted service, there should be a specific communication that the period of absence will be considered a service break. If no warning letters or disciplinary actions have been taken, the service would be continuous, making him eligible for gratuity. However, if he falls short of 240 days (including paid weekly offs, holidays, and leaves) in a 12-month period, that year shall be excluded for gratuity calculation. Furthermore, if your establishment operates for less than 6 days a week, for example, 5 days, then it is 190 days for every 12 months.
If the above conditions are met, you may proceed with settling his gratuity.
From India, Kannur
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To be deemed as interrupted service, there should be a specific communication that the period of absence will be considered a service break. If no warning letters or disciplinary actions have been taken, the service would be continuous, making him eligible for gratuity. However, if he falls short of 240 days (including paid weekly offs, holidays, and leaves) in a 12-month period, that year shall be excluded for gratuity calculation. Furthermore, if your establishment operates for less than 6 days a week, for example, 5 days, then it is 190 days for every 12 months.
If the above conditions are met, you may proceed with settling his gratuity.
From India, Kannur
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Hi,
I would suggest that you release the gratuity as per the entitlement. You may educate your management that the issuance of a relieving letter has nothing to do with gratuity. Even if a relieving/experience certificate was not provided, the employee has the right to appeal for gratuity. Also, for gratuity, there is no need to deduct money from the employee's salary.
Thank you.
From India, Madras
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I would suggest that you release the gratuity as per the entitlement. You may educate your management that the issuance of a relieving letter has nothing to do with gratuity. Even if a relieving/experience certificate was not provided, the employee has the right to appeal for gratuity. Also, for gratuity, there is no need to deduct money from the employee's salary.
Thank you.
From India, Madras
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Hi Pavi Jana,
"I'm referring to the lockdown period, and we have not deducted any gratuity amount from his salary. I have done my formalities by giving the relieving letter. Is it my fault to provide the relieving letter? Now, I'm blamed for providing the relieving letter."
What? Deducting 'gratuity' from salary? Really? If it's a fact, then it's illegal and wrong. It's necessary for your establishment to pay gratuity as per the act.
From India, Bangalore
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"I'm referring to the lockdown period, and we have not deducted any gratuity amount from his salary. I have done my formalities by giving the relieving letter. Is it my fault to provide the relieving letter? Now, I'm blamed for providing the relieving letter."
What? Deducting 'gratuity' from salary? Really? If it's a fact, then it's illegal and wrong. It's necessary for your establishment to pay gratuity as per the act.
From India, Bangalore
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Gratuity Act-Teachers-Ma dhya Pradesh.docx
Payment of Gratuity Act, 1972 & The Rules.ppt