Kapil (AM) 15 May 2015

Gratuity eligibility - if not subject to act

Hi,

I recently resigned from my previous organisation after working for 2 years.

> In my Appointment letter CTC breakup includes "Gratuity"

> I understand as per gratuity act 1972, i am eligible to get that only after 5 years of service.

But I have a concern,

1. My appointment letter NEVER says that mention gratuity amount is subject to conditions stated in "Payment to Gratuity Act" . It just say simply "GRATUITY"

So I have a strong belief that Company has a commitment to pay these benefits to me at any time during my service or thereafter because they have not stated that this component of CTC is subject to any condition

2. Company promised to incur certain FIXED cost (including Gratuity) for my benefit during my service.

I Can easily prove company has never incurred gratuity amount for my benefit. (AGAIN, as per signed appointment letter this gratuity is NOT subject to any condition)

On the basis of these points am I still eligible for gratuity?

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4 Replies

bsrao 15 May 2015

No. Gratuity is covered under the Payment of Gratuity Act. Prima Facie case exists - if you have served for 5 years or not. If the company did not incur any amount towards gratuity, then its their violation and you'll not benefit out of such act.

Kapil (AM) 15 May 2015

Thanks for your reply,

1. But is this the responsibilty of employee to interpret simple word "Gratuity" as "Gratuity as per Act" or subject to certain conditions

Should not it is the responsiblity of employer to clearly mention that this component is subject to certain conditions.

How can employee who is not a legal expert is assumed to know unless and until it is not mentioned in appointment letter

2. Company has committed to spend certain money for my benefit (termed as CTC) which they have not incurred anytime during my 2 years of service their voilation is a cost to me. Should not be I get benefit out of that?

ADV-JEEVAN PATIL, MUMBAI ( DEEMED/CONVEYANCE OF BUILDING) 15 May 2015

Kapil u r governed by provisions of Gratuity Act n any contravention employer intend to incorporate or u intend to demand will not survive.

Kumar Doab (FIN) 15 May 2015

It is good to see such posts…………………………and note that employee is properly informed and is inclided to acquire skills of reasoning,logic,persuasion,persistence!

There are many threads on similar queries and employee that persisted succeeded in getting payment of Gratuity, when Gratuity was included in CTC…………………….

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

You can also serach by typing the key words in box titled ‘SEARCH TOPICS &POSTS’ and press button ‘GO’ at bottom on right hand side at:

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

Like other threads this is also an interesting thread.

Gratuity is without any cost to employee.

CTC is annual pay package and all amounts inserted in it are committment and non payment a breach.

If the employer has a insurance as provided for in the Act (and Gartuity Rules framed by many states e.g. Maharashtra.............................and such rules can not provide for inferiro benefits than the Act.....................can provide for better provisions ) then payment made by employer is not a premia and no premium can be obtained/deducted from committed amounts/payouts to employee.