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Avinash Gaikwad (AVP)     26 June 2013

Gratuity rejected by employeer

Dear Sir/Madam

 I was working one of MNC in New Delhi and resigned in January 2012.   I had completed 6.8 yrs of continuous service with company before giving resignation.   However they refused to pay me gratuity without any proper justification. 

Following point may be useful to understand the case

1. I joined company on 2nd May 2005 and resigned on 9th January 2012.

2. My Initial designation was Trainee Loss Adjuster, Job offer letter confirmed gratuity will be payable as per gratuity act.

3. In June 2006   I got first increment

4. In Dec 2006, I got promoted to loss adjuster   and my CTC calculation given by company clearly shows gratuity is one of the elements of my CTC.

5. I resigned in Jan 2012 and Finance Manager sends me Gratuity calculation for my consent in June 2012 which I Accepted

5. However, subsequently, I was informed not to consider this calculation, since company has changed its gratuity policy with new manual in effect

6. As per new manual  gratuity is not payable during trainee period and  I was considered trainee for  two year contrary to my promotion letter  dated 2nd March 2007, (which is effective from 1st Dec 2006)

7.  I did lot of email correspondence with company but they didn't change their stand and hence finally I approached to labour commissioner for their intervention.

8. Company given argument that I was trainee for two years and gratuity is not payable to trainee (Although, I joined company after 3 years of experience as a Project Engineer and given the responsibility of Group Leader within one year of joining during Trainee Period)

I look forward for your advice and guidance. If required, I may provide supporting documents.

 

With Best Regards;

Avinash Gaikwad



Learning

 16 Replies

Avinash Gaikwad (AVP)     26 June 2013

one more point  I want  to add is that in past for similar cases company  paid gratuity in full, after that they negotiated it  and paid 50%  and in my case they rejected it in full.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     26 June 2013

 

Clarity between gratuity eligibility service (5 or 4.8 yrs)?

The gratuity eligibility service as per Gratuity Act 1972 is 5 years.

But as per the judgment from Supreme Court below and the quotation from the book quoted below it seems that the gratuity eligibility service is 4 years 240 days.

"Judgment from Supreme Court:

"Yes, by virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."

Quotation from the book:

Law Book (Bare Act,2004) i.e. The Payment of Gratuity Act,1972 (Publisher: Law Publishers () Pvt.Ltd. 18A-S.P.Marg,Post Box-1077,Allahabad-211 001. Phone:623735,623741 Fax-0532-622276.website: lawpublishersindia.com

1. 4 years and 6 months (190 days = 1 year) where the company follows 5 day a week.

2. 4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week.

Is eligible for gratuity.The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.

A company which follows 5 day week

Doj 1.05.2000 -

01.05.2000 to 30.04.2001 - worked for 190 days
01.05.2001 to 30.04.2002 - worked for 190days

If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004 "

Non clarity of this rule has created confusion among a lot of employees. As some hear that some companies are following the 4 years 240 days rule, while some follow the 5 year rule. Please help remove this confusion so that nobody rights of gratuity are being compromised on. Expert Lawyer may please give his comments and advice. . 


 

ravi shankar (finance)     26 June 2013

Sir Normally on what occassion gratuity will be rejected by the employer-is there any specific reason to say no to employee-what is in Rule.

Ravi shankar

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     26 June 2013

Rejection of payment of gratuity on the grounds that employee indiscipline, memos issued during the service period etc.

Kumar Doab (FIN)     26 June 2013

 

From saying and telling ( verbal mode) shift to written mode.

 

Submit FormI for payment of Gratuity as ap by redg. post.

 

 

 

Company can not have its own policy on the payment of gratuity.

It is statutory benefit it has to provide to employee.     

 

 

Payment of Gratuity Act, 1972

 

Section: 2
Definitions.

 

(e) "employee" means any person (other than an apprentice) employed on wages, ………….

{ If you were not apprentice appointed following the provisions of Apprenticeship Act,  you should be eligible…………………….You may not confuse Trainee with apprentice.}

 

If you have rendered uninterrupted service as described in :

Section: 2A
Continuous service.

You should be eligible.

 

If any employee e.g; HR etc or the employer is showing tantrums draw the attention to the Word ‘ Whoever” in

Section: 9
Penalties.

(1) Whoever...........................

............ Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall be punishable with imprisonment for a term which shall not be less than [36] [Six months but which may extend to two years] unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition 01; a fine would meet the ends of justice.

 

In case of  employees who persue, companies  finally do relent  or it relents when the employee announced to initiate legal proceedings.

Discussion > Labour & Service Law > Gratuity > Query regarding gratuity eligibility

https://www.lawyersclubindia.com/forum/Query-regarding-gratuity-eligibility-74941.asp#.UYYx76KAqWM

 

There are many threads on Payment of Gratuity at:

 

https://www.lawyersclubindia.com/forum/display.asp?cat_id=9&forum_id=49#.Ubx2VeeAqWM

 

e.g:

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

 

You may go thru these.

 

 

 

Avinash Gaikwad (AVP)     28 June 2013

Dear All ;

Thank you for your valuable feedbacks.

 I already applied to company for payment of gratuity in form I in December 2012, by registered post. However, Company did not respond. Therefore, before applying before labour commissioner for intervention, I again initiated communication with company.  MD of company assured me that he will take legal opinion and discuss with HO in London.   Finally he replied that London office confirmed that gratuity is not payable to you, though he want to help me  (Need not to mention that he was diplomatic in his reply, I don’t think, he would have consulted  to London office and London office don’t have any right to decide whether to pay gratuity, it is legal requirement under Indian law Although it is MNC, it is small in size (about 100 employee) and he is major stakeholder).

Therefore, I applied before controlling authority (labour commissioner), first hearing took place in last month, company send their HR representative, but he took another date, saying that MD is out of country.

Next hearing will be in second week in July 2013. My problem is that I am from Pune and working overseas. To represent myself in Delhi is difficult and costly, which is not commensurate to my gratuity amount. Though, I am determined to fight for Justice.

Your suggestions will be highly appreciated and valuable to me.  

 

With Best Regard,

Avinash Gaikwad

Kumar Doab (FIN)     28 June 2013

Section: 7

Determination of the amount of gratuity.

(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. 

You may authorize a person of your choice.


Attached File : 594013679 paymentofgratuityact(1).doc downloaded: 130 times

Avinash Gaikwad (AVP)     29 June 2013

Thank you, Sir.

Avinash Gaikwad (AVP)     12 August 2013

Dear All;

 Till date four hearings took place. I tried to solve it all decency but was unseccessful.   Comapny was  not able to provide justification for denial of grauity in front of authority . They are  just begging time on false ground, viz. MD  is out of country , not well..etc.  Last time, they come up with proposal  for settlement with 50% , payment, which i did not agree.

My problem is that I am from Pune and working overseas. To represent myself in Delhi is difficult and costly, which is not commensurate to my gratuity amount.  under situation, it seems  that   there  will be n nunber of hearing (Tarikh pe tarikh and tarikh pe tarikh)

How i can convice the authority for quick and speedy justice.  what about the extra cost  that   i am  spending.

 

I look forward   for your valuable advice.

 

With Best  Regards;

Avinash Gaikwad.

Kumar Doab (FIN)     12 August 2013

Section: 7:Determination of the amount of gratuity.

(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined.

(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:

{ It is clear that the employer in India has not issued any notice to employee and also to Controlling Authority………………….which is in contravention to the provisions……..as above. Demand exemplary penalty. The interest on delayed payment was simple @10%. You may confirm the latest position.}

(4)

(a) If there is any dispute as to the amount of gratuity payable………….

 

{ There is no dispute.( Finance Manager sends me Gratuity calculation for my consent in June 2012 which I Accepted “) Still the employer in India  and HR is lying, delaying…………….

Demand exemplary penalty and punishment.}

………………..the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity.

{The employer/HR has not deposited the amount with authority. Another contravention. Demand exemplary penalty}

 

(5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority shall have the same powers as are vested in a court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely :

(a) enforcing the attendance of any person or examining him on oath;

(b) requiring the discovery and production of documents,

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses.

(6) Any inquiry under this section shall be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code, 1860 (45 of 1860).

{ Press for your rights. “They are  just begging time on false ground, viz. MD  is out of country , not well..etc.” Provide proof of false representation…………………………There are provisions for penalty and imprisonment both. Put your feet on the tail.}

 

You have posted that:

--------“They are  just begging time on false ground, viz. MD  is out of country , not well..etc.”

Let the HR state so on record of authority. Obtain certified copy of the statement.

Generate evidence and provide to the authority. Prove their lies.

 

------------“ Last time, they come up with proposal  for settlement with 50% , payment, which i did not agree.

Have it been stated before the authority and has it been taken on record?

How can authority entertain such contentions?

If these are the statements in private record (audio/visual).

 Ask your lawyer if charge of intimidation can be pressed separately.

 

---------“ Finance Manager sends me Gratuity calculation for my consent in June 2012 which I Accepted “ “ since company has changed its gratuity policy with new manual in effect”

Any policy can not be from back date.

The Payment of Gratuity is social security tool and statutory obligation of employer.

It is not a joke.

Section: 8: Recovery of gratuity.

Since company has already stated the eligibility demand and press for recovery.

 

----------“ MD of company…………………………. is major stakeholder”

Obtain detail of his assets e.g. car/Bungalow/FD etc………..company accounts, and provide to authority. Press for seizure/recovery.

Section: 9: Penalties.

The provisions are self explanatory. Fine of Rs.20000/ and imprisonment.

Demand that HR and Finance manager depose before the authority.

Someone should understand that he has to ay and go to jail………………

---------“ My problem is that I am from Pune and working overseas. To represent myself in Delhi is difficult and costly”

State it to the authority in writing…………………..

--------“ what about the extra cost  that   i am  spending.’

Provide the details to the authority and hardships being faced by you due to flimsy grounds being taken by HR/MD……………….and demand payment………………..

 

Section: 13: Protection of gratuity.

…………………… civil, revenue or criminal court.

 

Determination of the amount of gratuity.

(1) A person who is eligible for payment of gratuity under this Act or any person authorized, in writing, to act on his behalf

 

You could have entrusted the matter to your lawyer……………….

Avinash Gaikwad (AVP)     17 August 2013

Dear Sir;

Thank you for your advice and support.

Certainly, it is precious and useful.   I will take it forward and keep you posted about the outcomes.

Thank you once again for your support.

 

With Regards,

Avinash Gaikwad

Avinash Gaikwad (AVP)     19 August 2013

Dear  Sirs;

Again same  thing, employers  could not provide any  reason for rejection of gratuity and  next date has been given again.  This is sixth time now. I dont know , how long it will continue.    Is  Labour  ministry really  acting in  the interest of employee.  Injustice is done  with me and  now i am suffering in the hands of labour ministry .  Company is located in Delhi and I required to represent  from Pune.   I can  guess, I will end pending more  money than my gratuity dues, still dont know, if justice has been delivered.  Is there no limit of number of dates  within which labour comissioner must delivered its verdict.

Anyway I am determined and will continue my fight for  justice.  Your advices and guidance  is  required.

Can anyone please suggest me someone, who will represent me in Delhi (Southwest District, Labour Commisioner office, Pratap Nagar, Hari Nagar Delhi) on given dates. I will pay reasonable fees.

 

With Best Regards;

Avinash

Kumar Doab (FIN)     19 August 2013

If you wish to avail the services of LCI lawyer you may conduct search at:

https://www.lawyersclubindia.com/lawyers_search/#.UhJfs9KAqWM

 

The list of related lawyers is being flasshed by LCI on the bottom of this web page.

You can also get in touch with Pro lawyers.

Your near and dear ones can also guide you to a competent lawyer.

The experts/members may also guide you to lawyer. 

Avinash Gaikwad (AVP)     14 January 2014

Dear Experts

Continuing with same thread,   my gratuity case is now under legal consideration. Till date number of hearings took place, but without any conclusion.

In between, I requested my employer for experience certificate, since I am in process of job change. However, company is not providing the same.   Before resigning, I served more than my required notice period and handed over my charge to the full satisfaction of my boss.  During my tenure, I never had any complaints, remain excellent employee and promoted time to time.

I believe, the reason of not giving experience certificate, is company’s apprehension that I might use it against them before Labour commissioner to prove my tenure in the company. 

If, I not get this experience certificate I will certainly loose this potential job.

Please advise me recourses available before me.

 

With Best Regards;

Avinash


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