The amount of gratuity can be paid only after an employee has rendered continuous services of not less than five years .except in termination of employment on account of death or disablemnt case.
THE CONDITION OF FIVE YEARS OF CONTINUOS SERVICES IS NOT NECESSARY IF SERVICES IS TERMINED DUE TO DEATH OR DISABLEMENT.
Graguity is normally payable to the employee himself ,whereas in death case of the employee it shall be paid to his nominee and nomination has been mad to his heirs.
in some case the nominee is a minor for it , the share of the minor shall be depostied with the controlling authority who shall invest the same for benefit of the minor ,until he/she attains majority age.
You are certainly eligible for availaing your Gratuity at the rate of 15 days salary per year of servie. Salary means Basic+DA.
This basic+da to be divided by 26 days x 15 days per year x no. of years of service (say 5 years in your case).
A person who has put 7 years service in a company and resigns from a lower post and joins immediately next day on a higher post in the same company. Thus there is no break in employment though there is resignation, the person remained in employment on both days i.e. day of resignation and next day he joins in new post. There is no gap even there is no sunday in between.
Can this person be paid gratuity if he claims for 7 years. If yes then question is that gratuity is payble on severance of relationship between an employee and an employer caused due to resignation, death, dismissal etc. But the effect of all these events is that person is no more in the rolls of the company. Here the person remains in the rolls of company on all days. Thus there is no severance of relationship.
If no, then the issue is what is the meaning of resignation, though i agree that the person is entitled for adding these 7 years when he actually resigns later.
The experts are invited to give their views. The situation is real life as in many public sector Banks such cases come.
1. Salary settlement upto and including the last day
2. Leave encashment
3. Settlement of Gratuity
4. Settlement of all advances as on that date
5.Intimation to PF ( Of course PF authoriies may question you if you add him the next day as a memeber)
However from whatever I have read in your post, I do not understand as to why an employee should resign today and rejoin tomorrow!!!
I wrote that it is a live case and Indian Public Sector Banks when recruit specialists, it happens so many times that same person competes again for higher post and if selected he is asked to resign and join afresh. The issue is if he has 7 years of previous service and prefers gratuity claims and while he resigns on say 5th and joins on 6th in the higher grade post whether he will be eligible for the gratuity. Question is whether gratuity is payble on resignation (and of course death, termination etc) whether it is necessry to have a break in service. As normally retirement, resignation, death will have one effect that is severance of relationship between the employer and employee. But here the person is in roll of the company on both days, there is no break in service. That is the question.
I seek others views.
It happens in some companies. Suppose if the Directors of the company started a new company, it may transfer some experienced staff to the new company's roll on higher pay. In that case, it is not transfer as the new company will be totally independent company. Company may ask the person to put his resignation and the relieving letter will be issued and full settlement will be done. For new company, all fresh procedure will be done. In that case, it will be the next day of joining.
1. Employee resigns and join the same Company in a different position
2. Employee resigns and joins a sister concern
We were discussing about the situation 1 and I still do not understand the logic in the organisations asking an employee to resign and join the next day. It was mentioned that when an employee qualifies for a higher post, then they are asked to do this. It must have been done to sort out seniority issue which might crop at a later stage when service based promotions are given. It is normally followed in public Sector. This may not be a normal practice in Private sector. In any case, it is better for the organisation to settle gratuity
On the issue of asking senior executives to resign and join another sister company, the normal practice which I have come across in more than four companies is to transfer gratuity liabilty to the new company. In fact some companies based on acturial valuation settle gratuity payable to that employee and the letter will say that the employee's date of joining will be from the past for purpose of gratuity. Even leave is transferred. Otherwise the transferred employee will be at a loss