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Sridhar   26 June 2018

Gratuity, when shifting group company overseas and rejoined

Dear Sir/Madam,

I worked for a company XYZ pvt ltd in India for 4 years then resigned to moved to its group company XYZ pty ltd, after working there for 2 years, i rejoined in XYZ Pvt ltd in India. I resigned now in India after working for 3 years.

Can i call it 7 years of contuinity of service in XYZ pvt ltd in India? Am i eligible for gratuity?

The company is arguing that i am not eligible.

Can you please advise on this?



 4 Replies

Kumar Doab (FIN)     26 June 2018

Since you resigned and do not have continuous service of 4Y190/240D you may not succeed..

Kumar Doab (FIN)     26 June 2018

GO thru the appointment letter/contract of employment and if employer provided better terms of Gratuity for period(s) served then you may succeed..

Pradipta Nath (Advocate)     27 June 2018

No you are not entitled for the gratuity under the POG Act, however if you have not been resigned but only transferred within the group of companies itself, you would have been entitled for the gratuity amount.

Advocate Abhishek Sinha (Advocate)     21 May 2019

Gratuity as a Statutory Liability, is for the compliance AS15 & 28. The Payment of Gratuity Act 1972 states that a company, if desires, MAY offer to its employees, anything better than the Law.

I as a professional have advised many listed Corporates (Some even the big ones) on Gratuity arrangement and compliance,Trust formation and on the contrary have surprisingly found some of the companies who actually do not have an intent to give "Employee-Benefits" but they use the Law to design those terms and conditions which saves/prevents them from doing additional funding in the Gratuity Fund every FY.

Since common people are not aware about this and mostly an Employee's average work tenure remains approximately between 1.5 - 2.75 Years, the company get an escape to pay the Gratuity to most of the employees who resigns. Besides, Some companies have 2-3 sister concerns and they keep on shifting the employees within these companies (for or the other good reasons like Promotion/Onsite opp/transfer to better office location etc) by getting them resigned and then showing their joining in another sister concern to escape this liability.

Here in your case, the situation is same, the company could have transferred you to show a continued services, but since you resigned and then joined as a fresh employee in another sister company, you legally and officially do not become eligible for Gratuity payment.

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