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Dear All,
i am currently working in a reputated Enginnering company. i have joined company on 4 Augest 2008 and had a bond of 4 years.
In my bond it is written that the Training period (not contract), which is of 1 year, shall not be considered as service period.
so if i resign on 4 Augest 2013 (complete 5 years in company)??
as my employeer has said that it is not applicable for me since training period is not considered as service.
I have read all the threads at CiteHR, which shows that if ther is continous service after the training, than it should be considered as "in Service".
Further for the training period they had deducted PF from our salary.
Secong question is that if i resign on 5th July 2013 and serve a notice of one month, then whether Gratuity shall be payable??
IF Gratuity is payable, then please suggest me how can i prove it to my financial officer...
please provide me some backup documents, case study...
Thanks
Prakash Rathi
From United States, Ashburn
If you have worked for 5 years continuosly then you are eligible for gratuity benefits. Training/probation period etc.will be counted as service period.
Any contract terms which is against the law/act of the land is null and void from the very begining
regards,
Kamal
From India, Pune
Dear Mr.Prakash Rathi,
If you resign after 4th Aug.2013, you will complete a period of 5 years continuous service whether it may be Trainee, Temporary or Permanent and you will be entitled for Gratuity as per Gratuity Act. It is not will and wish of any employer to consider some of the period as in service or not. If you resign before 4th Aug.2013, you will not be entitled for Gratuity.
Regards,
Ramesh Rao
HR-SPML
From India, Hyderabad
Dear Prakash,
As per the details provided by you i can suggest these steps.
You have successfully completed your training for one year and also completed your bond period in the organisation. Your total service as on 4-Aug-2013 is 5 years completed. Now among these 5yrs, 1yr is your training which is not considered as service period as per your bond with the company. So now you are left with 4yrs of continuos service after the training. You need to apply for gratuity after completing another 6 more months of service in the company. Because as per gratuity act and recent amendment by the law state that an employee should have completed 4yrs 6mths or more service in the company is eligible to claim gratuity. Then you can apply for resignation and approach your finance person with the service completed details for processing of gratuity.
Regards
Chandana Hyma
HR Professional
From India, Hyderabad
Thank You all for your reply.
Kamal Prasoon Sinha Sir,
Please provide me some documents for the same or some method to prove it.
Ramesh Rao Sir,
it means that the notice period will not be count as service period??
Chandana Hyma Sir,
please tell me why training period shall not be consider as in service, even though they have deducted PF for the same period??
if i want to resign in Augest 2013, then i will loose Gratuity???
Please some senior member can provide light on this issue.
From United States, Ashburn
Dear Mr.Prakash,

You got PF Contributions from Training period and it self proving that you are in continuous service from Training period onwards. In your case the 4 years bond is relating to your employment period for the retention policy of your employer. Your bond with employer will can't dictate the Gratuity Act. As per Gratuity act Continuous service means without any break (Discontinuation) in the service only. The continuous service may be included Training Period, Probation period and Permanent what ever it may be. Notice period will not be counted in continuous service period.

One more thing please not that, the Reckoning of Service period will be considered after 5 years of Continuous service as follows:

Over and above 6 months will be treated as one year. i.e 5 year 5 months will be treated as 5 years only and 5 years 7 months will be treated as 6 years. This Reckoning of over and above 6 months will be considered after completions of 5 years continuous service only but not for below 5 years continuous service.

Regards,

Ramesh Rao

H.R-SPML
From India, Hyderabad
Some other points need to be considered :
- what were you doing during training ? Were you doing actual work ? Or just learning ?
- was it defined as an apprentice under the apprentice act or standing orders ?
- when was your appointment letter given ? Did you get an appointment letter after completion of training ? Or before training started.
From India, Mumbai
Dear All,

little Modification in original query - Actually it was written in the Appointment Letter that the training period shall not be considered as service.

Ankita Mam,

Actually i had to serve total 4 years under bond which includes the training period also.

my question is that if PF was also getting deducted for training time, than that should be considered as service period...

as per your reply. I understand that i am eligible for gratuity if i resign on 4th August 2013.

Saswata banerjee Sir,

i have given Appointment letter in August 2008 with the subject as "Appointment as Engineer Trainee-2008", then it August 2009, i got a letter with the subject as "Confirmation of your Appointment", which is we are absorbed in company's Executive cadre.

and in my training period, i have been provided with 4 months Educational training at MIT Pune, and after that 8 months we are on "On Job training (working on project but that is considered as learning the work)".

please provide some method through which i can get my gratuity as Company is not accepting the same.
From United States, Ashburn
You are very much liable to gratuity as I said you have completed 5 years of tenure.
And regarding July's resignation, if you can wait for 1 month's time, why risk it. Gratuity is a nice amount to be let go.
Actually in order to complete the continuous service term, as I said working for 240 days is enough but there is always a debate if the eligibility starts after 5 years or even 4 years and 240 days of service.
So in my suggestion if you can wait for a month, wait before you put down paper.
Hope it helped.
From India, Mumbai
Sorry, but there is a good chance you are not eligible.
Out of the 5 years, 4 months is spent in classroom session and another 6 months spent on projects. This will support the employers stand that the first year is not employment / service. Definitely they can hold that as true for the first 4 months when you were at MIT and not at work. If others from your class at MIT also required to go through on job project work, it will further strengthen the employers stand.
Still, you may try and take up the matter through the gratuity authority. However, remember that by fighting with the company, you are going to ensure that you get negative feedback in any future background check. Are you ready for that ?
Incidentally, your location is showing in USA. Are you working in india ? Or USA ? Because the laws applicable are different
From India, Mumbai
Dear Mr. Saswatabanerjee,

spending 4 months in class room session and another 6 months spent on projects will no way support the employers stand in denying the gratuity benefits.

The moment an employment contract (employment letter) is issued by the employer and the same is accepted by the employee, Employer-Employee relationship is established and employee is eligible for all statutory benefits.

Denying this guy the gratuity benefit is illegal and an offence under the payment of gratuity act.

Payment of grtauity act is very clear in defining the term 'EMPLOYEE'. No manipulation and twisting of words is possible. This act do not make any distinction between trainee, probationer, casual, temprory etc.

Also I want to know is it proper to suggest not to ask for statutory rights just because employer may give negative feedback. I also represent Employers and have more than 12 years of core experience in such matters but I totally disagree with you.

We should guide the people to open their mouth against injustice and not to keep mum in fear of negative feedback.

Guidance should be positive not negative for whatsoever reasons.

regards,

Kamal
From India, Pune
The fact that the appointment letter says it will not be considered a part of service period, coupled with the fact he was not in job for 4 months is enough to establish that at least those 4 months is not to be counted in service period. The next 6 months can be contested, I do not know what decision a court will make on that part.

Just because a matter is negative does not mean you should suppress it and give wrong hopes to someone who asks for your advice. I believe in giving a balance view and letting the person make his own decisions as to whether it will be worth pursuing. He needs to judge whether 2.5 months salary is worth negative feedback from his first employer later in life.

Btw, I do not consider it injustice when he himself has signed a letter accepting training on the ground that it is not to be counted as service period. In any case, I do not care about justice, only about the legal impact of the circumstances and of the impact on his future career. As I have said, he is the best judge of whether he will or will not proceed on a particular path.


From India, Mumbai
1.) The employer is deducting EPF contribution from his salary from day one. It means this guy was employed on WAGES from the day of his appointment.
Payment of Gratuity Act clearly defines Employee as "any person (other than an apprentice) employed on WAGES........".
If this guy was getting WAGES then where is the dispute in treating him as an employee ? Attending a class or playing in the ground has nothing to dispute his claim as an employee.
2.) Any clause mentioned in a contract which is against the law of the land is null and void from the very begining. So even if there is something mentioned in the appointment letter which is contradictory to the act has no value at all.
3.) In M Selvadurai vs. Neyveli lignite Corporation Ltd, 2011, LLR 457, the Hon. Madras High court has ruled that "Gratuity act not be denied to an employee merely on the basis of the undertaking signed by him that he will not claim gratuity for the past period."
regards,
kamal
From India, Pune
The problem, kamal, is not with what's in the letter
It's with the fact that the person was in college for 4 months and not working. He was not coming to the factory, not doing work of any kind. For the next 6 months of project time, is it shown as attendance in the muster ? Or is it shown at part of college attendance ?
It is very likely that the courts (and the authority under gratuity act) will consider that period as not in service. The company will show that they were doing this as a part of their csr activity or something. And that they paid pf as a goodwill gesture. If packaged properly, it will stick. The employee must take that possibility into consideration. If he can convince the labour commissioner (or the designated authority) that it was service period, then so much the better for the employee.

From India, Mumbai
Saswata banerjee Sir,
there are few clarification i want to make to your reply.
1. my work is purely office work (i am, In design field), i do not go to factory.
2. my company work profile is EPC/CEPCM Project. which i have mentioned that in remaining 8 months of training, i am working in these project as assigned by company.
3. in the time of training,though we are in classroom of a college, our Timesheet (which is a measure of attendence in our office) was being filled as "ON OFFICICAL TOUR". after that we have to fill our timesheet according the work we had done but that was under "ON THE JOB TRAINING".
4. i have all attendence records with me..
but after going through all reply, i find that i have to file a complaint sort of thing if my company is not providing me gratuity.
is there no method to clear their logic that the training should be also consider as "IN SERVICE", if there is no discontinue between the training and service??
From United States, Ashburn
Ms. Banerjee,

In reference to your quote

As an IT person, I have experienced this -

IT companies hire lots of people in anticipation of a project, and give them appointment letter, orients them and inducts them.

However if the aniticipated project is not fetched, all these people are made to sit on bench (doing nothing) until the next project is bagged.

Is this employees fault?

The employee-employer relationship is established from the day the appointment letter was issued by the company and the same was signed by the person. Till the point the person signs the appointment letter, we call him/her candidate. Thereafter he becomes an employee.

2ndly, getting work done and appointing the right work is the task of the employer,

Prakash was given wages/salary from the very first day, and all the statutory deductions were made. And even if we have to give the benefit of doubt that he was working as an apprentice for the said 4months or 12 months, I do not think apprentices are covered under PF act.

So there is no grounds to deny the service.

About the service bond, I would again like to clarify that as per the bond Prakash is expected to serve for a min of 4 years post 1 year of training. It didn't mention anything of the said 1 yr training period and has not linked it to the employee-employer relation.

I hope this was able to convince you that he's very much liable to gratuity.
From India, Mumbai
Hi Praksh,
Gratuity act do not define applicability on the kind of the work so irrespective of the work you do, you are liable to gratuity if you have 5 years of continuous service.
Again as i said a break in service due to earned leaves / accident or diablement / strike / lock-out / project not in hands / any reason by which employee is not at fault is not a break in service.
You first go to the HR of your company and seek guidance. Ask what is the tenure of your employment (just casually to not to give any hints) and you'd know.
If it is anything below 4years and 10 months, seek clarification and then we can take things further.
Hope it helped.
From India, Mumbai
1. Training is a part of continuous services. For gratuity it should be considered.
2. In case of resignation if the five years of services are completed before last day of working then gratuity is payable. No matters what is the
resignation date of employee.
3. Five years of services needs to be completed, after the services of five years 0.5 clause is applicable but not before five years.
From India, Ahmadabad
Prakash,

By all means, file a complain to the gratuity authority if the company refuses.

Before that, file an official request for gratuity in form I as required by the act. Let the company issue a formal refusal, which you can take to the authority. It's a good thing you have all details with you.

What I was trying to warn you about, is that the company has some grounds for refusing to count the first 4 months. Irrespective of what the time sheet says, you were not in office but at a classroom training in a college. That can be construed as not in service. They will claim that as a part of csr, etc they paid for your training and gave you a stipend. Be ready for that and prepare to counter it.

On your side, the wording of the appointment letter, followed by the "confirmation letter" and the bond applicable from day one, along with their decision to pay PF from day one are the positive factors. Ultimately it is the way a matter gets presented in court or before the labour officer is what counts.


From India, Mumbai
Ankita,
I am a man, not woman :)
Anyway, what everyone seem to have missed is the nature of training.
The employee was not given a normal training in the company premises but was paid to do a 4 month course at a university / college. During that time, there was no connection with office. It is a ground the company is going to use to cut off at least the first 4 months. And they are likely to be able to convince the authorities on it. He needs to forewarned and prepared for it.

From India, Mumbai
Accepting someone as an employee under one act/legislation (EPF) and denying the same under other act/legislation (Gratuity) ......who will agree with this?
If such type of stand is taken by the Employer, the court will not only disapprove it but may also pass strictures against the Employer as it is nothing but manipulating the terms of the legislation.
Denying this guy of Gratuity benefits on CSR ground can not be accepted as he was getting wages and not any stipend or scholarship.
I have got sponsorship agreement signed with future employees where we sponsor them and bear the training or educational expenses. In such cases we pay them stipend or scholarship, we dont pay salary (wages).
Even if we accept that Employer's intention was not wrong rather it was their goodwill gesture to cover the guy under EPF, I would say the Employer was not properly advised on the subject and has chosen a wrong path to execute their idea.

From India, Pune
Dear All,
again some more clarification.
in my I-card and in system Date of joining is wriiten as 04-08-2008.
and regarding the wages or stipend; i am not able to, what i should call this...
as per appointment letter, this is written as stipend, but in our pay- slip i have detailed break-up for the same like the break-up of salary....
so i dont whether to consider it as salary or stipend??
From United States, Ashburn
Hi Prakash

This proves that in August this year you'd complete your 5 years of continuous service.

Again as I said earlier apprentices are not covered under PF or related act.

So even if they have mentioned salary but have deducted your PF and deposited it with PF authorities, again second proof to your employee-employer relationship.

Let's understand stipend firstly:

A stipend is a form of salary, such as for an internship or apprenticeship.

It is often distinct from a wage or a salary because it does not necessarily represent payment for work performed; instead it represents a payment that enables somebody to be exempt partly or wholly from waged or salaried employment in order to undertake a role that is normally unpaid (e.g. a magistrate in England) or voluntary, or which cannot be measured in terms of a task (e.g. members of the clergy).

Stipends are usually lower than what would be expected as a permanent salary for similar work.

Source-

Stipend - Wikipedia, the free encyclopedia

Again to re-emphasis my point that since PF is deducted from your salary, it cannot be qualified as stipend. You can also get further information on the discussion of the difference between salary and stipend on this forum. A relevant attribution by Mr. Dinesh Divakar is as follows:

Stipend is paid under the provisions of Apprentice Act 1961. The minimum amount is decided and revised every year by the Govt. However, employers have liberty to pay more than what is stipulated. Stipend is paid to the apprentices. They are not employees, either regular or contractual. Provisions of PF and ESI are not applicable for apprentices when they receive stipend.

attribution from - https://www.citehr.com/423069-differ...#ixzz2TABKYTb4

For your perusal

Apprentice Act - APPRENTICESHIP RULES

Training in employment - Training of Employees - Need and Importance of Training
From India, Mumbai
If you resign on 5th July, 2013 then considering one month notice period your last working day would be 4th August 2013. It means you complete your 5 years on 3rd August, 2013 after office hours.
For the calculation of services it is only consider the last working day not the date of resignation.
Here I seek the guidance of seniors……
From India, Ahmadabad
Dear Mr.Hardeep,
Your statement is 100% correct. But, if any employee put his resignation in view of one month notice period, The employer has right to accept the said resignation with immediate effect without waiting for one month and by paying one month salary in lie of Notice period. In a such incidence an employee can't entitled for Gratuity. To avoid such things, an employee should resign after completion of 5 years continuous service only for getting Gratuity.
regards,
Ramesh Rao
H.R-SPML
From India, Hyderabad
Dear Prakash

I have gone through your query and all the responses with care.

I had thought of refraining from commenting; but I can empathise with your rising concern on the subject of gratuity.

I totally agree with the analytical comments of KPrasoon; which are in conformity with the Laws on Gratuity; and which are followed to the letter; as well as in spirit; by all good companies.

Saswatabanerjee has also rightly cautioned you with the subterfuges adopted by bad companies to deny their employees their rightful and lawful dues.

Ankita has summed up the situation comprehensively.

In my opinion; what matters most is what kind of company you are working with.

As one is aware, there are companies which are the best places to work; for they provide more than what the Law asks for or stipulates. As all are aware; Law stipulates only the MINIMUM; and a good employer is free to give more benefits to its employees.

In such companies; for example; they do not even even restrict gratuity to a minimum service of five years. Also, in the last year of service, a period exceeding six month (which is even lesser than the stipulated 240 days) is reckoned as a full year for payment of gratuity. Also, if an employee has completed certain years, say thirty years of service, then instead of fifteen days salary for every completed years of service; they give full months salary for every completed years of service. These are the hallmarks of a great company - to be better than what the Law and Acts prescribe as the Minimum !!!

Then there are good companies; where legal compliance is complete. they do not violate any stipulations of the Law.

Finally, there are companies, which are called so, as they just manage to register themselves as companies and in reality are just a proprietor's business outfit. In such companies, there is always an attempt at hoodwinking the Law; trying to find loopholes in the Law and to exploit the employees to the maximum extent feasible.

These penny-pinching kind of companies always attempt to do the following, which is sure indicator of their philosophy and company policy :

- find ways to to avoid payment of gratuity (by attempting to reckon less service than actual);

- reduce the company payables in case of PF (by bifurcating even the Minimum Wages; or capping the PF at Rs. 780; keeping thee basic pay low; using cash reimbursements etc);

- try to reduce the accrued Leave by using sandwich leave concepts or clubbing sundays/weekly off or closed holidays in the leave period; etc.

In your case; what the company will do - depends on what kind of company it is. From your description; I gather that its a good and reputed company.

If it is so; then rest assured, you will not be denied of your gratuity. There are two important points in your favour :

1. Your PF contributions have been deducted from the very outset; which signifies your status as an enrolled employee.

2. The clause in the appointment letter, that the training period is not to be counted as service; is fairly standard and is applied wherever there is such long period of training involved such as for Management Trainee, Executive Trainee or Engineer Trainee etc.

Such persons are always considered as Trainees, whose services can be terminated on non-completion of Training or unsatisfactory performance during training. In both the cases; they can not be taken as employees and posted elsewhere; rather their services are terminated.

This is the actual purpose of having that clause - that services will be counted only after satisfactory completion of training.

3. After training, once such a trainee is absorbed and regularized (generally a confirmation letter/ Part - 2 order is issued) and he is posted; his service or Date of Joining is reckoned with the earlier / original date of joining.

In any case; as already pointed out; anything that is CONTRARY to the Act; shall not be considered. Thus, no company policy can run contrary to the provisions of the Act and you can not be denied of your rightful claim.

Accordingly; it would be better, if you discuss the matter in confidence, with your HR manager and based on the feedback, act accordingly.

Do keep us informed of the developments.

Warm regards.
From India, Delhi
HI prakash
what ankita said is exactly right. why don't you wait for one month to complete your 5 years of service.
and however as per your appointment letter you shall entitle for gratuity after 05.08.2013 only.
so wait till aug 2013 and enjoy gratuity benefit.
KHS
From India, Hyderabad
Yes your are eligible for your gratuity .
The law tells if any employees completes the tenure of 5 yrs is eligible for gratuity.
in this employment it involves Probation, notice and all.
Hence, You can avail for your Gratuity.
From India, Hyderabad
Dear All,
further to my query, i have resigned on 24th August and my last day in company is 24 Sept 2013.
According the reply received, i am eligible to Gratuity, but our Finance department has refused to give the gratuity stating that the training perios is not considered as service, as per their view trainee is considered as Aprentice, but it is not mentioned anywhere in the letter...
so please advice me what steps i should take to counter this...
also clarify me that whether PF and EPS is deducted for apprentice also???
From United States, Ashburn
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