compensation to employee on discontinuance of buisness

Hardik Desai (Querist) 26 November 2012 This query is : Resolved
my father had tax consultancy buisness and he had one staff member and one peon. he expired last year and i sold the buisness to someone else and he does not want to retain the employees. Gratuity act is applicable to employers having more than 10 employees if i m not wrong. My question is whether i need to make gratuity payment to both these employees and also pay compensation seperately for discontinuing employment as i personally have closed the buisness. How should the gratuity be calculated in such case and is there a compensation liability legally to be paid and if yes how the same should be computed? Please advice

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Raj Kumar Makkad (Expert) 26 November 2012
You have no liability towards those employees as you were never their employer and have discontinued that business after demise of your father and moreover payment of Gratuity Act is no applicable over you nor is Factories Act so legally you are not bound to pay but if you want to volutarily pay, none can stop you.

Hardik Desai (Querist) 27 November 2012
I had continued the business for 1 year after my father's death in order to complete all the pending work that was with him. Will it change your answer? Whether i will be considered as an employer liable to make payment for gratuity and compensation if any ?. Staff member has put a case forward saying that in case they leave on their own their own than gratuity is to be calculated considering 15/26 days whereas in case i remove them on discontinuance then i need to pay that gratuity on full salary without applying 15/26 days . Is that correct?

I hope there are no provision for making any compensation payments legally or cases against employer who have employees less than 10 and have to make payment for gratuity? Please clarify.. In case it goes legal then what are the chance of winning in my favour based on the above facts ?

which act or provisions that are applicable pertaining to this which i should go through in order to build my case stronger

Sudhir Kumar, Advocate (Expert) 27 November 2012
ID Act says nothing about number of employee. They are employee of an industry (if falling within definitions in section 2 of ID Act) being closed.

Hardik Desai (Querist) 27 November 2012
so that means legally under no law act or provisions i am liable to pay any gratuity or even compensation to the employees ? Am i correct ?