LTA & Ex-Gratia Payment

Sweetu Aggarwal · #1 (**permalink**) 11-11-2006, 04:50 PM

Hi All,

I have recently joined this group & found it to be quite knowledgeable. Needs an help...

If we have LTA & Ex-gratia as a part of CTC, is the employee resigning from the organization entitled for the same or not. Is their any legal implication for the same or it depends on the company's policy??

gyan_seek · #2 (**permalink**) 11-11-2006, 05:03 PM

Dear Sweetu,

You have not mentioned if the resigned employee had completed 5 years of service or not to be eligible for Gratuity. As per recent judgement those who have completed 4.6 yrs are also eligible. Hope you are aware how gratuity is calculated.

Yes, on resignation all employees are eligible for what ever LTA is due to them.

Regards,
AM

manojparanjape · #3 (**permalink**) 12-11-2006, 12:50 PM

dear sweetu
basically exgratia is not a part of CTC. Hence question of paying or not paying does not arise.
LTA is part of CTC and it shuld be paid as per rulres of the company

Exgratia has no legal implications where as LTA if not paid will have legal implications
regards
manoj

Quote:

Originally Posted by Sweetu Aggarwal

Hi All,

I have recently joined this group & found it to be quite knowledgeable. Needs an help...

If we have LTA & Ex-gratia as a part of CTC, is the employee resigning from the organization entitled for the same or not. Is their any legal implication for the same or it depends on the company's policy??

cyril · #4 (**permalink**) 12-11-2006, 07:08 PM

I think it is necessary to refer to the contract of employment/terms and conditions of employment. What is included in "PAY" will determine what should be included or not while terminating the contract either by the employer or the employee.

cyril

shobhu22 · #5 (**permalink**) 15-11-2006, 10:57 AM

Hi Sweetu,

LTA & Ex gratia if mentioned as part of CTC is surely due to the employee after resignation (pro rata)

Now more than thinking about legal implications , we must remember that HR has to play a prime role in being Ethical.

I saw in replies to you about Grauity
grauity is due after 5 yrs or 4.6 , but if there is any amendment to Grauity scheme in your company (please read), then it is due in Six months
we had such amendment in my old company
Calculatiion was @4.89% of Basic per month
If gratuity too forms a part of CTC, then the same should be paid to the employee

Sirisha Reddy · #6 (**permalink**) 16-11-2006, 02:17 PM

Hi Sweetu,

About Gratuity, as per my knowledge, legally, all the employees (for organizations which have more than 10 employees) who have fulfilled thier 5 years service period with the company are entitled to get their gratuity and this amount is calculated by a formula

Gratuity = 15/26 X No of years of service X Basic wage at the time of departture.

LTA, as it is a part of CTC, it has to be paid to the employees.

Regards

Sirisha Reddy

jitendra.pomendkar · #7 (**permalink**) 17-11-2006, 02:50 PM

Madame,

As a part of CTC , LTA and Exgratia needs to be paid if employee resigns.

Generally employee is entitled to LTA after completion of one year if the policy says so.
Exgratia if mentioned in your letter of appointment then yes ,need to be paid . but if it is declared at specific period say during diwali / dasshera based on performance of company then employee on roll are only entitled.

regards
jitendra

cyril · #8 (**permalink**) 17-11-2006, 03:47 PM

In calculation gratuity both, basic wage and dearness allowance are taken in to consideration .

The monthly wage is divided by 26 to arrive at the daily wage which is multiplied by 15 days for each completed year of service, subject to a maximum gratuity of Rs 3.50 lakhs

Cyril

thinkjobz · #9 (**permalink**) 20-05-2008, 08:31 PM

Hi,

BOTTOM LINE.

Anything that is mentioned in the CTC is due by the company. If your company deducts Gratuity amount from the salary even that amount is payable if and when the employee leaves.(the deducted amount)

If the person has served more than 4.6-5 years in your company a proper gratuity calculation has to be done according to labour laws and paid in full.

Also the gratuity amount can be more than 3.5 lakhs there is no upper limit to gratuity amount the only thing is that anything above 3.5 lakh is taxable.

Regards,

AJ

Rupalimumbai · #10 (**permalink**) 02-07-2008, 05:14 PM

Hi All,

Greetings from me !!

In one of my friends offfer letter it was mentioned as Annual payt for LTS and exgratia will be given whis makes it a part of her ctc ... how cna she claim for this exgratia amount annual??

Quote:

Originally Posted by Sweetu Aggarwal

Hi All,

I have recently joined this group & found it to be quite knowledgeable. Needs an help...

If we have LTA & Ex-gratia as a part of CTC, is the employee resigning from the organization entitled for the same or not. Is their any legal implication for the same or it depends on the company's policy??

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