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thasleem (Deputy Manager)     29 August 2011

Refund of gratuity on reemployment

Dear all,

I need some help...very urgently. I was working with a company for the past seven years and quit the company w.e.f 01.08.2011. On the last day of work itself I was paid the gratuity amount due to me. Now, due to some personal reasons, I have applied to rejoin the same company. Though the company is willing to consider my application and reemploy me the management is of the view that there will be a break in service as the grautiy amount due to me has already been paid to me. I have offered to refund the amount of gratuity back to them so that the continuity in service is maintained, but they are of the view that as per law gratuity once paid cannot be refunded under any circumstances under the Payment of Gratuity Act. Though they would like to help me, they say that since the law doesnot allow them to do so, they are helpless. Can't I refund the amount of gratuity due to restore the continuity in service. One more pertinant question, I would like to ask is that whether payment of gratuity amounts to reliever from service even though other dues like PF, notice period payments due are still pending.

Please help...it is extremely urgent.



Learning

 10 Replies

Raj Kumar Makkad (Adv P & H High Court Chandigarh)     29 August 2011

The view of company is accurate, Gratuity payment discontinues  a person from job even though other payments like PF etc. can be paid at any stge/passage of time. It is the employer which has to decide your fate now. If he is of hepful attitude then he may treat in between period as of extr ordinary leave and in tht event the gratuity amount may be got deposited back and you may continue.

thasleem (Deputy Manager)     29 August 2011

Dear rajkumar,

thanks for the prompt reply..so does that mean once a person is paid gratuity he can never be reinstated with continuity in service. If my employer takes the amount of gratuity back and gives me continuity will it be considered illegal under POGA. Informatively, the rules of the company are silent on this issue

prashant1314 (HR Learner)     29 August 2011

If your employer want to take you back without break in service then it is purely legal to do so.

 

thasleem (Deputy Manager)     29 August 2011

that means refunding back the amount of gratuity is legally possible?


(Guest)

Dear Thasleem,

 

Shri Raj Kumar Makkad is absolutely right in his observation. However, as you have asked about reinstatment in your supplementary question, the question of reinstatement does not arise. There is a lot of difference between reinstatement, re-employment or regularisation of break in service. The question arises, the break constitutes what amount of period and how the company proposes to treat that for the purpose of continuation of your service?

 

Would you please like to clarify the aforesaid point of issue?

thasleem (Deputy Manager)     30 August 2011

Dear Sir,

I left the company w.e.f  01.08.2011 and would like to rejoin with immediate effect. Company wants to take a lineant view and not treat it as a break in service but problem is that gratuity has been paid. Is it possible to refund the gratuity amount to the company


(Guest)

Dear Thasleem,

 

Since the break is of about a month only, if the company agrees to convert your break period as a leave due or leave without pay by canellation of its orders on your relief on resignation, you can be treated as on continued employment. But, I am not sure if the company would agree to treat that as a continued service for the purpose of increased liability for the company for your retirement benefits, including higher rate of gratuity based on your enhanced emoluments from time to time on your retirement/resignation or termination at some later stage.

 

If the company does not agree to cancel its order of acceptance of your resignation and relief, your appointment can only be a case of reappointment with past benefits already discharged on the part of the company.

 

You may therefore like to discuss on the terms of withdrawal of your resignation and cancellation of orders of the company on your resignation issue and treating the period of absence as leave due or without pay, if the company agrees to that.

thasleem (Deputy Manager)     30 August 2011

I want to know whether refund of gratuity is allowed

jagadish paranjape (Advocate)     29 January 2012

After you quit the company and receive your dues and you do not allege forced resignation,your earlier contract of service comes to an end.If you again join the company,that would be fresh contract of service.Since you have terminated the emploment contract,there in no question of  reinstatement or continuity of service.

jagadish paranjape (Advocate)     29 January 2012

After you quit the company and receive your dues and you do not allege forced resignation,your earlier contract of service comes to an end.If you again join the company,that would be fresh contract of service.Since you have terminated the emploment contract,there in no question of  reinstatement or continuity of service.

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