Regarding gratuity
DD
(Querist) 07 June 2013
This query is : Resolved
Respected Sir/Madam,
Request you to please help with the following query on gratuity policy.
Company A's Gratuity policy pays gratuity after 5 continuous years of service.
Company B's Gratuity policy also is as per Payment of Gratuity Act.However, they pay gratuity after 2 continuous years of service for employees who joined before a certain date of year 2012.
Now, Company A has been amalgamated into Company B and all employees of Company A have been transferred to Company B. Company A employee's years of service will be retained.However,after the amalgamation(approved by the High Court of Judicature)
After the amalgamation, are the employee's of Company A eligible to receive gratuity as per the gratuity policy(which says Eligible for gratuity on 2 continuous years of service and joined before a certain date in 2012) of Company B? The confusion is because of the difference in the gratuity policies of the 2 companies.
Does Company B have to pay gratuity to the employee of Company A after the merger?
Can 2 different gratuity policies exist after the amalgamation?
Please help.
Regards,
DD
Kumar Doab
(Expert) 08 June 2013
-----Payment of Gratuity Act, 1972: Section: 4: Payment of gratuity.
(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
-----Obtain printed version of the policy of the company before you stake the claim.
-----Re-insure that the policy of the company is pertaining to Payment of Gratuity or Superannuation as per internal superannuation scheme of the company.
DD
(Querist) 08 June 2013
Thank you Sir for the response.However, I still have a doubt.Can you please help.
As mentioned above, Company B's gratuity policy says "Gratuity will be paid after 2 cont years of service and for those who had joined Company B before XX Day of 2012". Company A's employees have been transferred to Company B as of a certain date in 2013.In that case,can an employee of Company A be eligible to receive gratuity as the gratuity policy(i.e. after 2 years) of Company B? There is no explicit clause about transferred employees.
Thank you.
Rajendra K Goyal
(Expert) 08 June 2013
Employees of Company A were not employees of Co. B on the date XX day of 2012. They have not completed two years of service in B. Under the circumstances they are not entitled till the terms of merger of the Companies are clear in the matter i,e.from which date employees of A would be considered the employees of B.
DD
(Querist) 08 June 2013
Sir,
Wit reference to the above mentioned discussion,Company B is retaining the years of service of Company's A employees.
Also, after the merger can 2 employees of the same company(irrespective of being employees of Company A or Company B) have different gratuity advantages?
Request you to please help.Thank you.
Raj Kumar Makkad
(Expert) 08 June 2013
After merger of two companies, the past service of the employee shall duly taken into consideration while computing the gratuity.
prabhakar singh
(Expert) 08 June 2013
FOR Question:After the amalgamation, are the employee's of Company A eligible to receive gratuity as per the gratuity policy(which says Eligible for gratuity on 2 continuous years of service and joined before a certain date in 2012) of Company B?
YES! WOULD BE MY ANSWER.
FOR Question:Does Company B have to pay gratuity to the employee of Company A after the merger?
YES! WOULD BE MY ANSWER for those who decide to resign after merger.
FOR Question:Can 2 different gratuity policies exist after the amalgamation?
NO! WOULD BE MY ANSWER!
Kumar Doab
(Expert) 08 June 2013
The company B ( current employer) seems to practicing good HR practices and proactive to retain the employees as it had offered better terms of Gratuity to attract its employees.
It may agree to issue communication to alleviate the apprehension of new employees as well.
The works committee/employee’s representative may take up the matter with management.
prabhakar singh
(Expert) 08 June 2013
DEAR Kumar Doab !
I found my answer in your post only.
If you differ state clearly.
What i understand that a company is free to make its' own gratuity policy which should never be less than dictates of law,the improved better policy is welcome by law.
Raj Kumar Makkad
(Expert) 08 June 2013
Generally amalgamation proposal is sanctioned only if the employees and the terms and conditions applicable to them are accepted by subsequent company. Hence the employees of company A cannot be denied with the benefits being availed by them.
prabhakar singh
(Expert) 08 June 2013
Though i am not a labor law practitioner but
i studied this field of law twice,in bcom. as well as LLb.,so jurisprudence behind various concepts are somewhat clear to me.
In absence of clear speaking of amalgamations' terms laid by High court only what i have stated would prevail unless system itself becomes fallacious or unsound.
Kumar Doab
(Expert) 08 June 2013
Dear Mr. Prabhakar Singh
Sir,
I do not differ with you. I am in full agreement with you.
The advice given by the experts in this thread including the concise and precise advice by you must have infused the confidence in the author Mr’DD’.
After your first post in this thread, I simply posted for the author Mr’DD’ implying that if the employees take up the matter the management which conceived policy offering superior provisions for its employees before amalgamation, the management may agree to issue a communication clarifying that employees which joined from Company A, after amalgamation would also be eligible.
Good professionals with good HR practices inclined to maintain harmonious relations do not hesitate to issue such a communication.
Or the management may rewrite the policy to include the employees which joined from Company A, as well.
Thus the employees shall also have a document in hand.
With Regards
Kumar
