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Vikas Dharmendra (Consultant)     16 January 2017

Eligibility for gratuity in an it organization (private ltd)

I joined an organization on 9th July 2012 and Resigning in January 2017 ( After 4 years and 190 Days).

Will I sure be eligible of Gratuity?

I found following information in support as I am working with organization which works for 5 days a week (Less than 6 weeks), Hence Section 2(a)(1) should be applicable to me.

This article is related to clarificance of Section 2(A)(1)

https://maitri.mahaonline.gov.in/pdf/payment-of-gratuity-act-1972.pdf

https://www.labour.nic.in/sites/default/files/ThePaymentofGratuityAct1972.pdf

The Main Part (Section 2(a))Copy pasted and highlighted below.

(2) Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-

(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-

(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and

(ii) two hundred and forty days, in any other case.

 



Learning

 24 Replies

Kumar Doab (FIN)     16 January 2017

Your understanding is correct.

Since establishment works for less than 6days/week you should have worked for 190days in a year.

If you have worked for 4Y190D then you should be eligible.

Submit FormI under proper acknowledgment. 

Vikas Dharmendra (Consultant)     16 January 2017

Hi Doab,

Thanks for suppoprting my understanding. 

If there is any clear case law(High Court, Supreme Court) for section 2(a)(1), please share the same. So that I can put my point forward.

Regard's

Vikas

 

 

Ritesh Maity (Labour Law Advocate)     16 January 2017

You do not require to send any case laws to the company inorder to claim your gratuity. 

Simply send FORM I to the company under registered/ speed post and wait for 30 days for reply/ rejection/ payment.

If nothing is done within these 30 days, apply in FORM N before the controlling authority. 

Vikas Dharmendra (Consultant)     17 January 2017

I sent mail to my organization HR( stating all the facts in my first post) and he replied me as following.

As per the agreement entered between organization and Gratuity trust (LIC) – it has to be 4 years 240 days to be eligible for payout

and they need to check with LIC what is their stand / guideline on eligibility – are they ok to consider 4 years 6 months as eligibility

Gratuity eligibility as per act is very vague to interpret and consider and it will be LIC who has to agree for the  tenure

Our gratuity payout comes from LIC trust with whom we have our policy and we are guided by their interpretation of the  act.

 

Ritesh Maity (Labour Law Advocate)     17 January 2017

Send FORM I as per the provisions of the Act.

If the company wants to reject any claim, then they have to reject your claim with valid reason through FORM M.

If you want to proceed further, you should apply in FORM N before the controlling authority. 

This is the legal position. 

The interpretation of the statute by your company/ LIC/ your own is immaterial. 

Kumar Doab (FIN)     17 January 2017

The Payment of Gratuity Act, 1972 is a Statue.

It also provides for mandatory Insurance for Gratuity.

You seem to be in Maharastra.

State of Maharashtra has notified: The Payment of Gratuity (MaharashtraRules, 1972 that also provides for mandatory Insurance for Gratuity.

 

However the T&C negotiated for the policy taken by employer from LIC does not/CAN NOT prevail upon statue.

 

NO citation is required.

 

There are many threads at LCI in whihc employees have confirmed that thay have succeeded to get payment of Gratuity without any litigation, by applying their skills.

Sec:9 provides for penalty and punishment with Jail Term to 'Whoever' avoids to pay Gratuity.

The designated HR person and employer and LIC all are deemed to know legal position,law,statue,provisions and remain subservient and comply.

 

 

 

 

 

 

Kumar Doab (FIN)     17 January 2017

You may submit written communication under proper acknowledgment mentioning that 'Notice of Determiantion of Gratuity and payment was not supplied to you, despite representations (mention details) and FormI is attached. 

And demand to supply 'Notice of Determiantion of Gratuity and payment of Gratuity.

The employer is under obligation to supply both within 30days from LWD or interst @10%pa is applicable and is to be paid.

Kumar Doab (FIN)     17 January 2017

You have posted in other thread also;

 

https://www.lawyersclubindia.com/forum/details.asp?mod_id=115520&offset=2

 

How and why :The approval or declinature by LIC (the insurer that has issued a policy as per T&C conveyed by employer) should have any bearing on You?  

 

If you are eligible: the employer has to tender the payment of Gratuity from its own resources and comply to its statutory obligation or face penalty and punishment as enshrined in Sec;9 that provides for jail time too.

 

Vikas Dharmendra (Consultant)     17 January 2017

Thanks kumar Deob and Ritesh Maitey.

Employer HR communicated me that they are working on this and will get back to me.

I will share the progress and their stand then remedies. 

Kumar Doab (FIN)     17 January 2017

You are welcome.

It is Kumar Doab and not Kumar Deob.

Pls correct.

Transact in writing under proper acknowledgment and draft in your own language, on the lines as suggested. 

 

 

Vikas Dharmendra (Consultant)     20 January 2017

Thanks Kumar Doab 

Company HR in written mail again sttaing that eligibility criteria for claiming gratuity is 4 years and 240 days.

They are again mentioning it is as per the agreement with the LIC.

I havnen't resigned yet but wanted to leave organization after completing  ocntinueing service of 4 years 190 days, which I already have completed.

What should be my stand.

Kumar Doab (FIN)     20 January 2017

The employer is at Liberty to enter into any private agreement with anyone including but not limited to LIC.

The employer and its attorney in HR and designated person in HR to handle/process Gratuity, PF etc are liable to know the statutory provisions, law of the land and comply with these.

The LIC also can not violate the statutory provisions.

If the employer has agreed to T&C in the policy it has bought from LIC then it does not absolve employer from the statutory provisions.

If employer has purchased a defective policy then employer has to pay from its own resources.

 

You can draft in your own language the reply to HR.

Remain gentle and amiable.

Rest is your own decision.

Employee can submit FormI, 30days before LWD also.

You can either submit FomrI, 30days before LWD, after resigning alongwith letter as suggested in previous post, or extend your notice period soa s to work for 240days and resign later

Or in reply indirectly HR/employer has asked you to give up claim of Gratuity…………………

 Employee should apply his/her skills and resolve the matter in his/her favor.

 

 

Vikas Dharmendra (Consultant)     20 January 2017

I am  continuouly trying to educate/convience and amy try to resign after 4 years and 240 days.

But in case I am not able to extend notice perioed or offer and I need to resign then how should I proceed with legal remedy.

I read in another post 

https://www.citehr.com/394224-gratuity-eligibility-gratuity-payment-pdf-download-pg2.html

"Firstly, all the clauses of section 2A of the Payment of Gratuity Act has to be read together and no single clause of that section should be read in isolation. You please see section 2A(2). This section starts with this phrase �(2) Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months he shall be deemed to be in continuous service under the employer-----�. Therefore Section 2A(2) could be invoked only if section 2A(1) is not applicable to the case , that is when the employee is not in uninterrupted service, excluding the interruptions permitted under Section 2A(1). Section 2A(1) of the Payment of Gratuity Act and section 2A(2) of the Payment of Gratuity Act are mutually exclusive"

This definitely state that my case definitely comes under section 2(a)(1) (4 Yrs and 190 days of Service). As same is continuous service without any interrupt (and even I accumulated 42 days of extra Leaves carreid forwarded.)

 

Kumar Doab (FIN)     20 January 2017

The employer should compute in FnF statement the earned wages/Leave encashment/bonus/OT/incentives/reimbursments etc : all payuts).

The leave/ encashment policy should not be inferior to the provisions of enactment that all applies e.g; Shops & Estbs Act

It can offer superior benefits. 

 


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