Eligible for gratuity & severance pay when company winding up the business

Dear All, My company BPO is winding up operations due to business ramp up they give verbal confirmation on 6 Dec 18 and on 13 Dec 18 when all BPO employee start protesting they said that we have already intimated the MP state govt. office at Bhopal that we are winding up the company business from Indore center of domestic business and relevant governmental authority and they said that they will not pay 90 days salary payout to agent/supervisor/TL/STL only associate level employees are eligible for Severance pay under Shops and Establishments Act, 1958 as they are workman and reaming employees are not eligible for Severance pay as they are not workman and no one is eligible for Gratuity payout even we are winding up the business, even when they shwon Gratuity amount in offer letter in CTC Our profile : supervisor/TL/STL company start: 1 Sep 18 Closing date : 31 Jan 19 Intimation of closer given on : 6 Dec 18 Current Severance pay offer given by employer: gross will be paid, 1years will 15days,2years will 30days, 3years will 45days (they indicate that you are not eligible for this also we are providing you this much as GOODWILL) history : current BPO company have purchased our previous BPO organization where previous organization paid Gratuity+GOODWILL+one month salary So request you kindly suggest you views on this with correct law applies for us, as 50 employees or more then are affected by this and 850+ associates


Hi, it means - Team leader (TL)/Senior Team leader (STL)

IT is not necessary that Company/ Employer/Manager/Management/Atorney’s of employer in Line Mangement- HR-IR-Personnel-Admin-legal- Accounts cells shall decide:

-- Who is Workman as per provisions of ID Act ….

--Or Employe as  per provisions of  Shops & estbs Act of the state

--and/or designation alone shall decide who is workman/employee, ….

But nature of duties on record.

Generically speaking; If the employee did not have power/discretion to sanction leave/increment/appoint/terminate etc he/she may fall within def. of Workman.


For the time being you may relate with provisions of the enactment as quoted by you in the query i.e.;



(4) “Commercial Establishment”s

(6) “employee” means a person wholly or principally employed, whether directly or through any agency, and whether for wages or other consideration, in or in connection with any establishment and include an apprentice, but does not include a member of the employer’s family;

(7) “employer” means a person owning or having ultimate control over the affairs of an establishment and includes the manager, agent or any other person acting in the general management or control of such establishment;

47. False entries by employer and manager


58. Notice of dismissal — (1) No employer shall dispense with the services of an employee who has been employed for a period of three months or more except for a reasonable cause and without giving such employee at least one month’s notice or wages in lieu of such notice: Provided that such notice shall not be necessary if the services of such employees are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an enquiry held by the employer for the purpose.


(a) The employee discharged, dismissed or retrenched may appeal to such authority and within such time as may be prescribed either on the ground that there was no reasonable cause for dispensing with his services or on the ground that he had not been guilty of misconduct as held by the employer or on the ground that such punishment of discharge or dismissal was severe.

(b) The appellate authority may, after giving notice in the prescribed manner to the employer and the employee, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period during which he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case. (3) The decision of the appellate authority shall be final and binding on both the parties and be given effect to within such time as may be specified in the order of the appellate authority.

60. Protection to persons acting under this act

61. Rights and privileges under other law, etc. not affected

62. Persons employed in factories to be governed by Factories Act, 1948 and not by this Act

63. Provisions of the Workmen’s Compensation Act, to apply mutatis mutandis


You may also go thru;


Payment of Wages Act

Payment of Gartuity Act

Payment of Bonus Act

Model Standing Orders; that is Statute

Certified Standing Orders; that is Instrument of Law (if certified and made applicable to the designation of each employee). Also check if establishment was under obligation to get standing orders certified as per number of employees in establishment, per provisions made applicable by State Govt. 

The employee/workman can choose the enactments that are (whose provisions are) more beneficial to employee/workman.


To understand provisons of the provisions of the applicable enactments approach;

Seasoned employee’s/Trade union leaders

Inspector appointed under various enactments/ALC/ALCC

 A very able LOCAL counsel specializing in Labor/Service matters



etc etc


The provisions of the enactments shall prevail upon any private/internal rules/policies of establishment drafted by employer and signed with employee e.g; appointment leter, service rules etc ..Employer can provide more beneficial ( superior) provisions than enactment but not inferior.  If employer has decided/drafted more beneficial provisions than enactments then employer is under obligation to provide these e.g; notice period/pay of 90 days than 30 days in enactments..


The verbal communications are not on record.

The establishment could have circulated by published communication IT’s intent to wind/up close one div/office

And update employees on Lay off/redundancy/retrenchment ……………alternate employment etc etc


Apparently the establishment may be right in offering compensation equivalent to 15days/year …

Establishment can offer to each employee at any position a severance package (negotiated) and employee has the discretion to accept or reject..Employee may agitate for any negotiated pacjage that is in violation of provisions of applicable enactments, later.


Generically Speaking; IT is wrong to show Gratuity under CTC since employee is not under any obligation to contribute to CTC…

Gratuity is payable per provisions of applicable enactment in case of BPO; Payment of Gartuity Act

The matter if agitated may land before adjudicating authority e.g; ALCC (Controlling Authority of Gratuity) and may…may…may be decided in favor of employee per facts of each matter..

During negotiations establishment may agree to pay also, depending upon skills of employee and discretion of establishment/employer.

Apparently the previous establishment as per negotiated settlement (probably with stock, flock and barrel) with current establishment ( that took over ) agreed to pay for Gratuity etc …If the past employment was counted in continuous pervice then many employee may otherwise also become eligible for Gratuity.

However the copy of negotiated settlement may be placed on record.


If employee’s can decide by their skills the best possible settlement then IT may be attempted…..


Or employees may approach the Unions/Authorities





You may take help for any matter from, elders of your family, competent and experienced well wishers, seasoned PIP’s, helpgroups, community leaders, NGO’s, experienced colleagues, associations, religious scholars/leaders, influential persons, Employee’s/Trade union leaders, help groups for spouses (Husband/wife)  etc and  find a very able LOCAL counsel specializing in concerned filed of law e.g; Labor/Service  matters as in your case, and well versed with LOCAL applicable rules, precedence, latest judgments etc …. and worth his/her salt, can advise you after examining all case related docs, inputs,  evidences on record.

Obtain proper legal opinion in writing!

Avoid acting on your own on hearsay.

One should not fall for IT’s and entities loitering at online portals to allure unsuspecting querists. There are many threads on such instances at LCI also.

Online discussions are not substitute to in person discussions with a very able counsel of unshakable repute and integrity specializing in concerned field of law.

One should not fall for IT’s and entities loitering at online portals to allure unsuspecting querists……the personal details of unsuspecting querists/citizens get stored in databanks/compromised……hacked.

Not only your counsel ( if other very able counsel opine that 1st counsel’s advise was bad, misleading) many posing as Lawyers (actually Liar) have been raking up disputes at online portals including LCI on subjects like ; WILL, Nomination, Gratuity etc etc with their misleading, illegal advices and conduct..and have failed due to untiring efforts by some sincere and good natured Experts that indeed want to help and contribute at such portals. Such entities operate by forming gangs ( ikdi, dukdi, tikdi, chokdi and even more)….and attempt to deflect, divert to other members of their gangs to fleece the unsuspecting querists. Many of such entities have never been to courts and might have never won in any case and may not be able to count even on their fingertips. In the end multiple fake ID’s of such IT’s and entities get permanently blacklisted, shunted out at online portals and outside online portals and even society………and that is exactly what they deserve. Make a note of such entities and if the need be act to confine them to correctional centers; Jail, and let their cost and consequences be, heritable. Why such IT’s and entities litter nuisance at online portals: to hide their own weaknesses, and to satiate their insatiable itch and due to their infectious greed. One should stay away from such infected entities and hence away from such infection. You may post if anyone has ever asked /is asking for money from you have paid.

 Such IT’s and entities keep on poping up at online portals with fake and new ID’s after  their old ID’s are permanently blacklisted/shunted out and money fleeced from unsuspecting is finished.

There are such very able counsels at each location.

Check for such counsels at LOCAL; Labor Court/CGIT, CAT/School-Educational Tribunal/Civil Courts, HC, SC,..

You can also try for FREE legal Aid from Legal aid center (DLSA) that is usually within LOCAL courts complex..preferably from a very able counsel specializing in Labor/service matters.

Your counsels  may opine that you can appear on 1st date, and obtain copies of petition etc to reply later ….and inform the court that you shall be engaging a counsel and appear thru your counsel….Or your counsel can appear and obtain copies of petition etc and reply later or your new counsel can appear for you.

Your counsels can advise after examining all docs/record/inputs pertaining to your matter and help you. You can also search threads on similar query in SEARCH option ON left Hand side of threads in Forum/Experts section. Having learnt a lesson, remember to consult beforehand for your matters or any matter about which you are not properly informed.

There have many instances of such entities operating with multiple fake Id’s at online portals.



The FEE of all LOCAL counsels at all LOCATIONS is not high/unreasonable as mis-believed by many.

Many counsels even at State Capital/Metro towns  do not demand unreasonable high FEE.

IT is rather at online portals that unsuspecting querists are mislead as per many publications, by IT’s and Entities that pose as some Lawyer (actually LIAR) and flaunt/advertise firms that are not Law Firms (Actually LIAR’s Firms) to believe that LOCAL counsels are not knowledgeable..are incompetent.

In Reality the LOCAL counsels win cases in LOCAL courts at all LOCATIONS.

You can go thru/search the cases contested by any Lawyer at court website.

Rest; Your own very able LOCAL counsel as already advised above, can advise you in person, after examining all docs, inputs in person.

Obtain proper legal opinion in writing.




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