Partner - Risk Management
Korgaonkar K A
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
it is not the question whether employee will be looser or employer will be looser.it is the gratuity act which says it should be calculated on last basic.
now last basic was rs6000/- per month.please pay 10 years gratuity by showing 6000 as basic.
14th January 2014 From India, Delhi
My view is as under:
When you used the word transferred, the employee is entitled to gratuity for 8.5 + 1.5 years.
Now the question is on what basic?
According to P G Act, last drawn basic pay is considered.. But you can not reduce the basic (and also gross). It is detrimental to his various benefits.
14th January 2014 From India, Mumbai
When the employee was working in the first company, the salary was Rs. 8500, Basic was Rs. 5100
When he went to the second company, salary was Rs. 12000, Basic was Rs. 6000
So, how does he lose by choosing the last salary ?
His basic is still higher than what he was drawing in the second company.
I hope you are aware that Gratuity is computed on last drawn wages, not to be computed for each year separately.
So he is to get gratuity on the basis of 10 years of service, at 15 days for every year worked, based on his last drawn salary.
Please also note that in working out the per day rate, you divide the monthly salary by 26 not by 30.
15th January 2014 From India, Mumbai
In my opinion, he is not entitled to receive his gratuity unless he quits the job. BECAUSE : the word "transferred" has been used for change of Company, which means that the employee is continuing with the same employer but posted at a different station.
So, unless his services are terminated for whatever reasons, he should neither claim gratuity nor should be paid.
Now to the question of computation of gratuity. Gratuity is calculated on last pay drawn which includes Basic pay + DA. If there are two separate employers in both the companies, he is eligible for gratuity from 1st Company for 9 years (if service period is more than 8 years 6 months). Since he is continuing in 2nd Company, he is not eligible to claim gratuity from there.
16th January 2014 From India, Jabalpur
I am extremely sorry for the error. Thanks for your valuable advise. I welcome your suggestion. However, my contention that if the companies (1) & (2) belong to same employer/group, the employee shall be eligible for 10 years gratuity and if not, for 8 or 9 years (if part of the year exceeds six months) holds good, isn't it. Pl advise/comment.
Thanks once again.
17th January 2014 From India, Jabalpur
Thanks for your response and taking the matter positively !!
Since its a case of Group companies, (and continuity of employment), the service for the purpose of gratuity should be reckoned as 10 years.
For example; if an employee of Coal India Ltd. is transferred to other subsidiaries during his career, (his Personnel File and records will be transferred from one co. to another) and he will be entitled for gratuity for the total length of service. Isn't it ?
17th January 2014 From India, Delhi