Manoj Yadav (Software Engineer) 11 November 2014

Is my hr/legal team saying right about my gratuity?

I have been working with a software startup since March 2010 and my last working day with that company was on 30-Sep 2014. Company is working 5 days in a week since last 3 years and currently has 150 plus employees in India.

I have completed more than 4 years and 190 days with this company and as per my knowledge I eligible for gratuity. I have followed up with the HR through mails regarding this. However they are denying my claim saying that I'm not eligible. Below is the last mail I received from the legal team.

Please note Gratuity Act is applicable to the Company and not the employee. Employee is a beneficiary under the Act only after completing 5 years employment or existence of the entity, whichever is later. In our case Gratuity Act is applicable from June 2011, when we crossed 10 employees. Theoretically speaking our company will touch 5 years under Gratuity Act in FY 2015-16. Whereas when you resigned, our company completed approximately Three and Half years under the applicable Act. Based on this premise, sorry to say, we missed opportunity to compensate you with Gratuity benefit available under the Act

Need your kind advice on - who is right here. Thank you for expert comments in advance.

Best regards,

Manoj Yadav

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8 Replies

V M DAHAKE (PROPRIETOR) 12 November 2014

Dear mr. Manoj,

Gratuity is payable only after completion of 5 years of service.

Kumar Doab (FIN) 14 November 2014

The HR has referred to Sec:1 of the Act. You may submit FormI under proper acknowledgement. Let the company reply on it. The employer can pay Gratuity even if you are not eligible.

Kumar Doab (FIN) 14 November 2014

The HR has referred to Sec:1 of the Act. You may submit FormI under proper acknowledgement. Let the company reply on it. The employer can pay Gratuity even if you are not eligible.

Manoj Yadav (Software Engineer) 19 November 2014

Dear Kumar

I spoke to my HR again but he is denying.

Would you let us know any strong point so that I can directly speak to my CEO.

I have very good relations with higher authority of the company and he will help me if I am really eligible.

Thanks

Kumar Doab (FIN) 23 November 2014

Submit FormI under proper acknowledgement. Employer can pay Gratuity: : even if employee is not eligible :offer better benefits than those enshrined in the Act..

Isaac Gabriel (Advocate) 07 December 2014

The gratuity Act will not stand in the way if the employer willingly pay gratuity not withstanding the provisions of the act.

Jai Karan Nagwan (consultant) 19 December 2014

Gratuity act stands in the way, if employee has not completed 5 year and note five year under labour law is 4 years and 240 days. If employer pay before statutory period will not be able to set off against gratuity in IT act and at the same time such money will be taxable in the hand of employees. My thoughts you are not eligible for gratuity.