Sachin Saxena (Private service) 15 September 2013

Eligible for gratuity claim

Hi,

I am working in IT company. I had completed 4 years 8 month and 12 days on my last working day in company. (Total 1717 days including last day). My company HR told me that I am eligible for gratuity.

However after 2 month, when I did not get it, I approched to my company finance team and he told me that LIC has rejected my gratuity. (LIC is managing it on behalf of company). He told me LIC is saying that I had completed 4 years and 7 months. I asked them for clarification. He give me calculation : 1717/365 = 4.7 years ( 4 years and 7 month).

I told him that this calculation is not valid and how 4.7 years can be equal to 4 years 7 month. (Because in simple mathmatics, how can 10 month equals to 1 years. e.g. 4.5 is never equal to 4 years 5 month, it is equals to 4 years 6 month)

I provided them calculation like this

1717 days

4 years = 4 * 365 = 1460 days
remaining days in 5th year = 1717 - 1460 = 257 days (Equivalent to 240 + 17 days)

So total working days are 4 years 8 month and 17 days

But they are not considering and saying that LIC is calculating only by dividing 365.

Can any one confirm, who is correct. Can I get the gratuity?

Thanks

Reply Follow

2 Replies

Kumar Doab (FIN) 15 September 2013

IT IS BEING SUGGESTED IN ALMOST ALL THREADS THAT EMPLOYEE SHOULD STOP DEALING WITH EMPLOYER VERBALLY::::: COME OUT OF ASKING, SAYING, TELLING MODE::::: AND TRANSACT IN WRITING BY LETTER THRU REDG. POST.The compnay can not keep any amount from payment disbursed by LIC to compaNy from gratuity account of employee. compnay has to pay entire amount to employee it has received frOm lic, even if amount of gartuity CALCULATED by employer by formulae of gratuity is less than amounts employer has received from lic.

in other situation let us assume that amount paid by lic to compnay is less than amount of GRaTUITY CALCULATED by employer by formulae for calculation of gratuity, still employer has to pay higher amount calculated by formulae for calculation of gratuity………….

{ (Basic+DA) x15/26xNo. of completed years of services

(part of a year in excess of 6 months is counted as 1 year)

(Basic+DA as per monthly wages last drawn)}

You may demand copy of the certificate of payment mentioning amounts paid by LIC to company showing amount it has paid from you’re a/c to company.

LIC is not your employer.

Your employer himself or concerned competent personnel in HR have to reply to you.

The Payment of Gratuity Act 1972, is a statue and is applicable on employer.

Employer has to decline or accept and if it declines it has to explain the reason for declinature in writing and supply the declinature by effective odes of communication e.g redg. post………………………….and the reason for declinature has to satisfy the provision of the statue……………….

Employer can not transfer the onus to LIC. If it wants let it supply the copy of the communication issued by LIC to it.

Section: 7
Determination of the amount of gratuity.

In your case the employer and its designated person in HR has not issued any notice to you with a copy to Controlling Authority of Gratuity on calculation of Gratuity payable to you. If you are eligible it is a lapse at the end of employer.

Did you submit FormI? Submit as ap by redg. post.

You may demand reply and payment (by bank DD only) by redg. post only.

From DOJ calculate 1Y e.g; 1^st Jan to 31^st Dec………………thus 4Y. In 5^th year calculate 240 days if the establishment is working on 6days/week and 190 days if establishment works 5 days/week………………………..

Section: 2A: Continuous service: 2 (a) (i) (ii), (b) (i) (ii)

(Thus If you have worked for 190/240 days in 5th year you should be eligible)

The 190/240 days should include holidays/off days/approved leave………..

If company has delayed the payment it has pay the interest as stipulated in the statue which was @ 10% from date of eligibility (DOL) ................................You may confirm the latest rate.

There are many threads on Gratuity at:

https://www.lawyersclubindia.com/forum/display.asp?cat_id=9&forum_id=49#.UjMGTtKAqWM

e.g:

https://www.lawyersclubindia.com/forum/Clarity-between-gratuity-eligibility-service-5-or-4-8-yrs--28768.asp#.UjMGndKAqWM

Discussion > Labour & Service Law > Gratuity > Clarity between gratuity eligibility service (5 or 4.8 yrs)?