Payment of gratuity

Nilanjan Bhattacharaya (Querist) 14 May 2013 This query is : Resolved
I have been working in a private company since 3.5 years and Gratuity is shown as a component of the CTC offered by my employer.
Though my employer does not deduct any amount from my monthly salary but the amount set aside as Gratuity is not paid annually.
Now if I am planning to leave my current organisation after serving 3.5 years, am I eligible for the amount that I have foregone in name of Gratuity along with relevant interest on the same amount?

Your expert advice is the need of the hour.

Rgds,

NB-Kolkata

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Advocate M.Bhadra (Expert) 15 May 2013
Your query is not clear,please read an formation which has taken form www.asklabourproblem.info:---

Gratuity law in India is governed by The Payment of Gratuity Act, 1972. Gratuity is a lump sum payment made to an employee on (a) resignation (b) termination on account of death or disablement due to accident or disease (c) retirement (d) death. Gratuity is a form of social security payable only after an employee completes five years of continuous service at the rate of 15 day’s wages per year of service completed. In case of death and disablement, the condition of minimum 5 years’ service is not applicable. Gratuity Act in India applies to every shop and establishment where 10 or more persons are employed or were employed on any day in the preceding 12 months and is applicable to all employees – workers as well as persons employed in administrative and managerial capacity, irrespective of their salary.

Raj Kumar Makkad (Expert) 15 May 2013
The gratuity do not form part of salary and it is payable over the salary after completion of 4 years and 230 days on continuous service.

In your case, a wrong procedure was adopted by your employer who deducted the amount of salary payable at the end of the service out of your emoluments on yearly basis. This is entirely wrong procedure and the deduction with interest belongs to you.

Serve a legal notice and then file a suit for recovery with interest and cost.

Nilanjan Bhattacharaya (Querist) 15 May 2013
Thanks for your valued suggestion Mr. Makkad.

What I could gather from your answer is that an organisation doesn't have any legal right to make any deductions from annual salary and in case they do the same the employee has all rights to demand the same if not paid during termination of contract along with accrued interests on the deducted amount.

Now even if the employee serves for more than stipulated period required for claim of Gratuity, that amount is actually not paid by the company, since it is already deducted from Salary.

So the employee can claim for Gratuity amount to be borne by the Company as well as the deducted amount from the salary of the employee.

Please advise.