Is this 'gratuity fraud' or what??

Dear All 

Please solution on below mention issue

1) M/s ABC Pvt ltd co. 4 year old having 15+ employee

2) Directors  of  above company want to avoid Gratuity liability

3) They decided to close existing private limited company and want to open new company XYZ Pvt Ltd ( and not conversion)

4) request all staff to resign from existing  ABC co.. and they offer same job in xyz co.


what can employee do to handle this type of situation.??. Is there any case law which protect employee..??


Please revert thanks in advance



Hello Sir, 

Gratuity is a defined benefit plan given by the employer to the employee for rendering services continuously for five years or more. Therefore, it is not fraud until the company is 5 or more years old.




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