Labour Law & Hr Consultant
Working As Assistant General Manager (personnel)
Korgaonkar K A
+6 Others

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If the organisation does not mention about gratuity in its organization policy then can an employee claim for gratuity?
Gratuity is a right conferred by the Statute(Gratuity Act 1972) on the employee but not a bounty to b egiven by employer out of grace and hence an employee can calim irrespective whetheror not it is mentioned the policy or appointment letter.
HR & Labour Law advisor

Dear Mr.Kuldip,
IN CONTINUATION OF THE views expressed by the learned members, I WOULD LIKE TO ADD THE FOLLOWING;
'Gratuity' is one among the triple terminal benefits viz., gratuity,provident fund n pension available to the workmen in India. As such, the Payment of Gratuity ACT,1972 is a social security legislation. That's why the Act been amended 7 times since 1984 to 2010 extending its coverage, applicability and other details so as to achieve the purpose of the enactment stated in its preamble.Therefore, whether stated in the policy of any individual organisation or not, the right is still available to its employees.

Dear All,
While endorsing the responses by every one, just I wish to say that the POG Act is applicable to establishment employing 10 and more employees during past 12 months. Further, once the Act is applicable to any establishment, it is applicable forever. All the members who participated in this discussion knows this but somehow they missed out to mention it. Govind ji did mention it in his blog.
Thanks & regards.
Keshav Korgaonkar

Payment of Gratuity Act, 1972 is applicable to those establishment / factory where 10 or more employees are working. Even though iyour company policy explicitely expressed on gratuity as per statue this Act will apply to your organization. Howerver, gratutity is applicable only when the employee has put in continuous service of 5 years.
with regards,
bv sudhakar

Dear Kuldip,
I always said that no company's policy is above Law. As stated above by many it is a statutory right of an employee and cannot be evaded under any circumstances. Rest assured if you complete 4 years and 240 days in your company you are entitled for gratuity irrespective of any company policy.

Thank you all for the information. I do understand gratuity is applicable only after completing 5 years of service.
If the organisation refuses to pay gratuity giving the following reasons:
Running in loss
No profit etc can the employees claim or move to the court?

Gratuity does not depend on profit or loss of the organization. Kuldip even if they sight this reason they cannot hold your gratuity. Labour Commissioners are Authority under Gratuity Act you can always file an complaint before them against your employer.
Dont worry you are entitled for gratuity even if they are running into losses.

Dear Kuldip,

Our senior members have rightly portrayed the applicability and coverage of PGA. I would only add flavour to the discussions through following points.

- Irrespective of gain or loss, the employer is bound to pay the eligible employee, as per the Act in vogue.

- You apply for gratuity within 30 days from the date it becomes eligible, to the employer. The nominee/legal heirs of the eligible employee can also apply in the said time zone. It can even be applied in plain paper with RELEVANT PARTICULARS by the nominee or legal heirs.

- Even after the expiry of the above period, you can apply for the same if you show-cause sufficient reasons for the delay in preferring your claim and the employer cannot reject your claim on this ground.

- Any dispute arises as regards to the payment of gratuity, you may approach the Controlling authority, in writing, directly in person or through registered post within ninety days of the occurrence of the cause, who will then direct the employer for further course of action. Generally, Assistant Labour Commissioner of your region will be the Controlling authority. Here also, you can apply after the expiry of ninety days, if you show-cause valid reasons for any delay in approaching the Controlling Authority for his direction.


P. Vathiraj

In our company earlier it was not ltd. company but now it has changed to pvt. ltd., company recently 4 months completed.
i have completed 3 & 1/2 years in this organisation is gratuity applicable. is my earlier service considered?
Kindly give some suggestions for this.

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