Hello Friends
I am sure this below question has been asked by many people in the past but I couldn’t see any definite reply hence posting it again as it is crucial for me to understand that whether I am eligible for Gratuity or not:
I am working for an IT firm from Mar 2005 onwards. The same firm has transferred me to their parent office in USA in Feb 2008. Though my payroll has been shifted but I am still counted as a part of India branch and hence my performance appraisal and rest all HR coordination happens through India. My India employee code is still intact and I get tax related communication from our finance including Form 16 for every year though tax is always zero. Now I am planning to resign here in USA and I am not sure whether I will be eligible for gratuity or not.
Pls advice. If my company deines, can I take this matter in Indian court? If yes, what are the chances for me to win this case.
PS: In IT firms, these movement are quite frequent and employer send us to client locations and expect us to manage their business from abroad and finally when employee leaves the organisation, he doesn’t get advantage of social security in any country.
Thanks in advance
Regards
From United Kingdom, Crewkerne
Acknowledge(0)
Amend(0)
I am sure this below question has been asked by many people in the past but I couldn’t see any definite reply hence posting it again as it is crucial for me to understand that whether I am eligible for Gratuity or not:
I am working for an IT firm from Mar 2005 onwards. The same firm has transferred me to their parent office in USA in Feb 2008. Though my payroll has been shifted but I am still counted as a part of India branch and hence my performance appraisal and rest all HR coordination happens through India. My India employee code is still intact and I get tax related communication from our finance including Form 16 for every year though tax is always zero. Now I am planning to resign here in USA and I am not sure whether I will be eligible for gratuity or not.
Pls advice. If my company deines, can I take this matter in Indian court? If yes, what are the chances for me to win this case.
PS: In IT firms, these movement are quite frequent and employer send us to client locations and expect us to manage their business from abroad and finally when employee leaves the organisation, he doesn’t get advantage of social security in any country.
Thanks in advance
Regards
From United Kingdom, Crewkerne
Acknowledge(0)Amend(0)
Dear Vivekbat,
When you receive Form 16 every year from the same company, it is evident that you are in continuous service even if you are working elsewhere on behalf of the same company. Please read the following and determine for yourself whether you are eligible or not.
Payment of gratuity.
4. (1) Gratuity shall be payable to an employee upon the termination of his employment after he has rendered continuous service for not less than five years, —
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
[(c) “continuous service” means continuous service as defined in section 2A;]
2A. For the purposes of this Act, —
(1) an employee shall be deemed to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), layoff, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
I hope this clarifies your doubt.
Regards,
KIRAN KALE
From India, Kolhapur
Acknowledge(0)Amend(0)
12When you receive Form 16 every year from the same company, it is evident that you are in continuous service even if you are working elsewhere on behalf of the same company. Please read the following and determine for yourself whether you are eligible or not.
Payment of gratuity.
4. (1) Gratuity shall be payable to an employee upon the termination of his employment after he has rendered continuous service for not less than five years, —
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
[(c) “continuous service” means continuous service as defined in section 2A;]
2A. For the purposes of this Act, —
(1) an employee shall be deemed to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), layoff, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
I hope this clarifies your doubt.
Regards,
KIRAN KALE
From India, Kolhapur
Acknowledge(0)Amend(0)
Dear all,
Kindly note that gratuity is applicable to employees working continuously for 5 full calendar years. However, one condition applies: your employment should be with the same organization. If you were transferred to another firm in the USA, please ensure that the director or owner remains the same, even if the company name is unchanged.
Regards
From India, Lucknow
Acknowledge(0)Amend(0)
Kindly note that gratuity is applicable to employees working continuously for 5 full calendar years. However, one condition applies: your employment should be with the same organization. If you were transferred to another firm in the USA, please ensure that the director or owner remains the same, even if the company name is unchanged.
Regards
From India, Lucknow
Acknowledge(0)Amend(0)
Dear Vivekbat,
The inputs provided by Kiran Kale are quite valid with the following considerations:
Is your employment terminated in India while considering your employment in the US? Are you reappointed in the US? If you are reappointed in the US, then the service that you render in India shall not be accountable. As the company is a separate entity and shall not have relevance with the owner - if the interpretation for the owner is an individual in the above perspective.
FORM 16 is only a declaration regarding the income earned by you in India in that firm but shall not essentially confirm your service. You need to take an expert opinion in this regard.
Further, for the purpose of the calculation of years of service, any fractions in the year shall be considered as follows: if the duration is 6 months or below, then it is not considered a completed year of service. If the duration is above 6 months, then it is considered a completed year of service.
Cheers and Regards,
PN Narayana Vyas
From India, Secunderabad
Acknowledge(0)Amend(0)
The inputs provided by Kiran Kale are quite valid with the following considerations:
Is your employment terminated in India while considering your employment in the US? Are you reappointed in the US? If you are reappointed in the US, then the service that you render in India shall not be accountable. As the company is a separate entity and shall not have relevance with the owner - if the interpretation for the owner is an individual in the above perspective.
FORM 16 is only a declaration regarding the income earned by you in India in that firm but shall not essentially confirm your service. You need to take an expert opinion in this regard.
Further, for the purpose of the calculation of years of service, any fractions in the year shall be considered as follows: if the duration is 6 months or below, then it is not considered a completed year of service. If the duration is above 6 months, then it is considered a completed year of service.
Cheers and Regards,
PN Narayana Vyas
From India, Secunderabad
Acknowledge(0)Amend(0)
Hello Kiran, Narayana, and Amit,
Thank you for the advice. Please note that my employment has never been terminated in India, and I have never received any reappointment letter in the US. This means that I have been transferred for an assignment, and my performance evaluation still occurs in India. In fact, my resignation formalities are also being coordinated by the HR team in India. Typically, an employee in such a situation should return to their home office. However, since I am joining a firm in the US, my relieving letter will be sent to my US address.
I have some doubts because I read somewhere that one needs to earn in India and have an active PF account. However, in my case, my salary is paid in the US by the host country, and I have not submitted any PF contributions in the past 3 years. Despite this, my PF account remains active, and the interest continues to accumulate. I have two employee codes, both of which are linked – my US employee code is connected with my India employee code at the backend, and both codes are active.
Typically, individuals like us who have come on a transfer return after completing our assignment. However, I am unsure about the Gratuity rules in such a situation. Do they consider individuals in transfer cases, who are being paid in a foreign country, eligible for gratuity or not?
Thank you,
Vivek
From United Kingdom, Crewkerne
Acknowledge(0)Amend(0)
Thank you for the advice. Please note that my employment has never been terminated in India, and I have never received any reappointment letter in the US. This means that I have been transferred for an assignment, and my performance evaluation still occurs in India. In fact, my resignation formalities are also being coordinated by the HR team in India. Typically, an employee in such a situation should return to their home office. However, since I am joining a firm in the US, my relieving letter will be sent to my US address.
I have some doubts because I read somewhere that one needs to earn in India and have an active PF account. However, in my case, my salary is paid in the US by the host country, and I have not submitted any PF contributions in the past 3 years. Despite this, my PF account remains active, and the interest continues to accumulate. I have two employee codes, both of which are linked – my US employee code is connected with my India employee code at the backend, and both codes are active.
Typically, individuals like us who have come on a transfer return after completing our assignment. However, I am unsure about the Gratuity rules in such a situation. Do they consider individuals in transfer cases, who are being paid in a foreign country, eligible for gratuity or not?
Thank you,
Vivek
From United Kingdom, Crewkerne
Acknowledge(0)Amend(0)
Hello,
This is on behalf of my mother, who has been teaching in an unaided educational institution in Bangalore since 25th May 2005 and is resigning on 9th April 2011. The school states that the first year is termed as a probationary period and is refusing to pay the gratuity amount. The school asserts that the gratuity period of 5 years begins only after the probationary period (25th May 2006) and is using this statement to refuse the payment of gratuity as my mother is leaving the institution on 9th April 2011.
What can be done in such a case?
Thank you.
Statement in Offer Letter:
i.) Probationary Period: All employees, except temporary employees appointed for a specific period, will be on probation for a period of 9 months in the first instance. The period of probation may be extended by the managing committee/board of governors but ordinarily for a period of 3 months. During this probationary period, this agreement is terminable by either party by giving 1 month's notice or one month's salary in lieu of notice provided. The notice period terminates at the end of the term.
From India, Bangalore
Acknowledge(0)Amend(0)
This is on behalf of my mother, who has been teaching in an unaided educational institution in Bangalore since 25th May 2005 and is resigning on 9th April 2011. The school states that the first year is termed as a probationary period and is refusing to pay the gratuity amount. The school asserts that the gratuity period of 5 years begins only after the probationary period (25th May 2006) and is using this statement to refuse the payment of gratuity as my mother is leaving the institution on 9th April 2011.
What can be done in such a case?
Thank you.
Statement in Offer Letter:
i.) Probationary Period: All employees, except temporary employees appointed for a specific period, will be on probation for a period of 9 months in the first instance. The period of probation may be extended by the managing committee/board of governors but ordinarily for a period of 3 months. During this probationary period, this agreement is terminable by either party by giving 1 month's notice or one month's salary in lieu of notice provided. The notice period terminates at the end of the term.
From India, Bangalore
Acknowledge(0)Amend(0)Join Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Gratuity-Contin uous Service-countin g broken period with same employer-Madras HC Judgment.docx
Less than 5 years service - Eligibility for payment of gratuity.pdf