Madhu.T.K
Industrial Relations And Labour Laws
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber

Whether gratuity is payable for those who are suspended from service? As some of the personnel suspended have not been paid the gratuity amount. What are the rules for payment of gratuity
Dear Kpaddmakar,
Let me first tell you that suspension is not a termination of employment. It seems you have misunderstood the terminology. You mean to say termination.
For your knowledge, I am giving below the provisions of forfeiture of gratuity. I hope you will get answer to your question from it.
1. Employee may wholly or partially forfeit the gratuity if his services are terminated (a) for his riotous or disorderly conduct or any other act of violence on his part or (b) for any act which constitute an offence involving moral turpitude.
2. Employee partly forfeits the gratuity if his services are terminated for any act, willful omission or negligence, causing any damage or loss to, or destruction of, property belonging to employer, to the extent of damage or loss caused.
Suspension is purely temporary and should be revoked immediately after the enquiry is over and it shall end up either in termination or reinstatement. In case of reinstatement payment of gratuity will not arise because it is paid when the employee leaves the company and when he leaves the suspension period should be taken as period worked for the purpose of computation of gratuity. On the other hand, if it is decided to terminate him, then also the non payment of gratuity depends upon the misconduct for which the employee was placed under suspension on the basis of which he was DISMISSED. Gratuity can be withheld only if he was dismissed on charges of riotous behaviour or on the charges of moral turpitude. In the former case, of course there should be loss caused due to his behaviour and the withholding of gratuity should be limited to the amount of loss caused to the company by his behaviour. For all other charges even if the person has been dismissed (it should be discharge rather than dismissal) gratuity should be paid.

Madhu.T.K
The Gratuity payable to an employee can be forfeited in case of TERMINATION of employee for following reasons as per Payment of Gratuity Act section 4.
(a) the gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.
(b) The gratuity payable to an employee may be wholly or partially forfeited] -
(i) If the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
In your case how the question comes if employee is suspended? Pl. check and clarify whether it is suspended or terminated and if terminated than please check against the provisions of the Act mentioned above.
Regards
Shailesh Parikh
Vadodara, Gujarat
99 98 97 10 65
Add Reply Start A New Discussion

Cite.Co - is a repository of information created by your industry peers and experienced seniors. Register Here and help by adding your inputs to this topic/query page.

Prime Sponsor: TALENTEDGE - Certification Courses for career growth from top institutes like IIM / XLRI direct to device (online digital learning)





About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2019 Cite.Co™