Gratuity payment

UMA MALHOTRA (Querist) 10 April 2014 This query is : Resolved
I have recently left an orgn. regd as a society after putting in 5 and a half yrs. This orgn is 31 yr old and used to have 15 plus employee but currently has apart from 8 member board following no. of employees -

a. Part-time Director - 1 who is paid 20 k petrol etc. and is also orgn's landlord (last year we had a full time Executive director paid proper salary.
b. Sr Accounts Officer - 1
c. EDP - 2
d. Admin Asst - 1
e. Housekeeping - 2
f. Sr.Project Associate - 1 (on contractual basis since past 6-7 yr)
g. Executive secy - 1 vacant after I left
h. Driver - who is paid salary by it but is not signing register
i. A project director/consultant- who comes 4 days a week is paid 40k package p.m.
j. An earlier regular employee for Bharatpur is now working part-time work for the orgn.
j. The post of front-desk executive is lying vacant since august 2012. similarly the post of Accounts Assistant has not been filled up since 2009-10.

My concern is the orgn does not want to pay gratuity to its eligible employees. And it has as per the sr accounts officer circulated office order to this effect - never shown to me or any of the current emp. Only once before my joining they paid Gratuity to one senior consultant. My query is Now can I press my case with them and ask for gratuity or can they under the law of the land refuse it to me on the pretext of a non existent order and are they liable to pay under 1972 Act. They have been deducting PF and Pension from all employees and depositing it with the govt. Thank you
Uma Malhotra

Follow Query

Report Abuse

Kumar Doab (Expert) 10 April 2014
>>> You have posted that;
“Only once before my joining they paid Gratuity to one senior consultant.”
Generate evidence and quote reference. If you can’t generate evidence quote reference. This should suffice.
You may submit in writing preferably by letter thru Redg. Post addressed to appointing authority, MD that Notice of Determination of Gratuity was not supplied to you despite your representations in office/by email/in person/by letter etc on dated…………………………to Mr/Ms………………….designation…………….name of company……address……………………and FormI is attached.
There are many threads on Gratuity at:
http://www.lawyersclubindia.com/forum/display.asp?cat_id=9&forum_id=49#.U0ZOTEeBmXU

>>> The office order or Executive instructions can not override the Statue.

>>> Payment of Gratuity Act: Sec:1(3)
And in particular: Sec:1(3)(c)
…………..such other establishments or class of establishments, in which 10 or more employees are employed on any day of the preceding 12 months, as the Central Government may, by notification, specify in this behalf……………….
Even Red Cross was brought under it.

>>> You have posted that;
--“This orgn is 31 yr old”

Supreme Court of India has………………. held that Section 1(3)(b) of the Act applied to every establishment within the meaning of any law for the time being in force in relation to an establishment in a State and it was not necessary that the law should be one relating to shops and establishments.

Court of law has ……………….. held that the world "establishment" as used under Section 1(3)(b) and Section 1(3)(c) of the Act connotes an organised body of men and women employed where the relationship of employer and employee comes into existence, and took………………..the view that the Act being a progressive, Social and beneficial legislation, the construction that promotes the purpose of legislation should be preferred to a literal construction.

So much so that……………………even a Non Profit Educational Inst. Also covered under purview of Gratuity

>>> You have posted that;
“I have recently left an orgn. regd as a society after putting in 5 and a half yrs.”
Look into existent rules from your DOJ to DOL too.

Check if the organization is not exempted from registration and payment of fees and has registered with (Name of your state) Shops and Commercial Establishments Act…………

>>> ny systematic activity carried on with the cooperation of employer and employees forr satisfying human needs and wants (exception is………..spiritual needs) would fall under the def. of Industry. Thus your organization may come under the def.of industry.
Registration of an organization as a NGO/ charitable organization should not become a defence to exploit employees and deny them their rights under the EPF Act, ESI Act, Minimum Wages Act, Gratuity Act or ID Act.

In another case Court of law decided deliberated that “The petitioner is also an 'establishment' as defined by Section 2(c) of other Tamil Nadu Payment of Subsistence Allowance Act (43 of 1981). That Section reads as follows :- "establishment" means any place where any industry, trade, business, undertaking, manufacture, occupation or service is carried on, and with respect to which the executive power of the State extends, but does not include ---“

You may stake your claim and pursue it. If the employer does not resolve you can approach the lawful authority.

It shall be however appropriate to approach a Labor Consultant/service lawyer with copies of all docs on record, give inputs in person and spend quality time with your lawyer before you proceed further. The lawyer that examined doc and inputs can advise you the best.