I have a friend who is working with a private limited company employing less than 10 employees for the last 10 years, since the gratuity act prescribes a minimum employment of ten people for the eligibility for the payment of gratuity ,will my friend along with his colleagues be eligible for payment of gratuity?
will appreciate your inputs on this.
You have not indicated as to whether the private limited companymin which your friend is working is a factory or a mine oil field or plantation or a shop or establishment. In case the private limited company is either a factory or mine or plantation then the restriction of employing 10 persons does not apply. It has to be a factory as defined under the Factories Act or a mine as defined under the Mines Act or a plantation as defined under the Plantation Labour Act. In case the private limited company is not one of these, then it has to be a shop or establishment, in which case it has to employ ten or more persons. Once ten or more persons are employed in the shop/establishment the Gratuity Act is applicable. Once the Gratuity Act is applicable then it does not matter if the number of employees goes below ten. in case the private limited company is a shop or establishment please check whether at any point in time ten or more persons were employed by it. If so then the Gratuity Act is applicable and your friend is entitled to get gratuity.
Joint Commissioner of Labour (Retired)
Government of Tamilnadu
Labour Law Consultant
Thank you very much for your inputs ,
this firm which i am referring to falls under the shops & establishment act and i will check the provision there in.
Also, as suggested i will check the relevant details and try to see whether the firm had employed 10 people any time in the past or not.
Thanks again for your inputs.
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