Gratuity is a lumpsum and one-time-payment ensured to the employees by a special legislation only on account of certain modes of termination of their employment specified therein and that particular law has been recognized as a complete Code in itself in this regard. So, my view-point is that everything connected with gratuity has to be approached from the perspective of what the Payment of Gratuity Act,1972 stands for.

Even those learned members who are of the opinion that the amounts due from the out-going employee can be recovered by the employer from his gratuity would admit that the P.G Act is a social security legislation. Forfeiture, either partial or whole, of the amount of gratuity is certainly different from the recovery of dues from the gratuity by way of adjustment or otherwise.Therefore, recovery of any monetary dues created out of the subsisting employment relationship between the employer and employee can not be effected in any manner from his gratuity which arises only on the termination of the employment relationship. In view of this fact as well as the provision of Sec.14 of the Act,It is to be noted that any settlement or agreement envisaging the recovery of or adjustment of monetary dues from/against the amount of gratuity is null and void.

Similarly, the protection of gratuity ensured under section 13 of the Act is only against attachment in execution of any decree or order of any court seems to be a hyper-technical argument.

From India, Salem

Dear Anuj,
Gratuity once paid, may be by credit in to the bank account by the employer, cannot be recovered from the employee's bank account. Needless to emphasize, the roles of an employer towards its employee and the banker of an individual are quite different from each other. So both the roles of the bank cannot overlap with each other..

From India, Delhi

i think many of them giving wrong information. you cannot recover outstanding amount from gratuity and its illegal. i request those who said it legal kindly go through the gratuity act and case studies clearly.
From India

Dear Balaji,
Instead of asking any or every person to go through the Act as a whole, you may please like to quote relevant section of the Act, which you intend to refer that debars recovery of employer's dues against the employee, such like outstanding balances of home loans, advances or losses, etc., to any establishment.

From India, Delhi

The Hon'ble Supreme Court, vide its order dated December 15, 2020, in Steel Authority of India Limited vs. Raghbendra Singh & Ors (Special Leave to Appeal No. 11025/2020, has laid down that there does not exist any constraint regarding withholding an employee's gratuity against the recovery of dues from such employee, including penal rent, which in the instant case pertained to the overstay by the employee in official company provided accommodation.

In the light of above Judgment of the Apex Court, the participants to this post may have a relook on their versions.

Jacob Pratap
Deputy Labour Commissioner, Punjab (Retd.)

From India, Chandigarh

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