shine mangalore (advocate) 08 February 2012

Employee gratuity

Sir/Madam,

X and Y are different societies. Often employees from X society are sent to Y society under deputation for some projects. One employee of X society was transferred to Y society under deputation for a project. In Y society the employee was paid consolidated pay.

In the letter given by Y society to the said employee it was written that “during deputation the employee’s service in the society will be considered as continuity of service for the purpose of gratuity.”

But it is not clearly written as to where the continuity of service is considered, i.e whether the continuity of service is in X society or Y society.

The said employee was deputed for 3 years and further extended to 2 years. Before completion of 2 years he has given one months notice for his resignation. (His total period of service in Y society is 4 years 6 months. ) (His total year of service in X society is 1 year 2 months)

1. Now my question is for the payment of gratuity whether his continuity of service is considered for X society or Y society?

2. As he was paid consolidated pay in Y society, is Y society liable to pay gratuity?

3. Or whether X society is liable to pay gratuity for the period of service of employee in Y society in addition to the gratuity to be paid to the employee for his service in X society?

4. Is X liable to pay gratuity for one year 2 months?

Kindly clear my doubt.

Thank you in advance.

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2 Replies

Kumar Doab (FIN) 10 February 2012

This is with limited understanding on the matter:

X has seconded the employee to Y. X is liable for employee. X may recover/obtain from Y or release for its own resource.

Valuable advise of learned experts/members is sought.

shiv mohan gulati (member) 10 February 2012

The employment on deputation by an employee would be treated as employment with the parent company and the parent company shall have to pay the gratuity to the employee at the time of determiantion of contract of employment either by the employee or by the employer or at the time of superannuation of the employee, even if he continues to be on deputation with the Y company. X company shall be liable for payment all his retireable benefits.