How To Claim My Gratuity , LTA, Pending Salaries From Company - CiteHR
Industrial Relations And Labour Laws
Hr Manager
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My old company was deducting 5% of basic since nov 2001 to 2010 . old company has sold company to new company and directors has resigned in 2008.
new company has almost closed their operation in 2012.
how to to claim my Gratuity , LTA, pending Salaries from company ?
if I ask from old company then they say , you will have to recover from new company . also shares are still with old company directors.
old company name has been changed , director are also changed but shares are still with old directors.
now don't you think old company was doing wrong practices by doing 5% as gratuity from my perks
also how can my gratuity can be transferred to new company?
where to complain for all these.
is it possible to get information about the pact that has happened between old company and new company .
this case for gurgaon based company ?
any solution for that

Your case seems to be complicated and also very sensitive. Under normal circumstances, unless otherwise agreed upon by the employer and the employees while transferring the undertaking, the employees should be paid retrenchment compensation which will be equal to 15 days salary for each completed year of service and gratuity to those who have worked at least for 5 years which will again be equal to 15 days salary for every completed year. Otherwise there should be an understanding that the new employer will take care of the liability towards gratuity which would come in future considering their service from the date of joining with the transferor employer. This will also cover payment of benefits to those employees who have not put in gratuity qualifying period of service with the transferor. In the absence of these, the new employer is deemed to have taken over the liabilities of the employees and in the event of closing down of the establishment, the employees will become eligible to get the retrenchment benefits, gratuity etc calculated from the date on which each joined the old company. Since the employers are reluctant to take the ownership, the only way is to file a case before the Labour Court. If you need a conciliation before the matter is filed before the Court, you can also file a representation before the Labour Officer.

Deducting 5% from the salary is illegal and you can get back the amount, not as gratuity which will be paid separately.


Dear Rb2014

You have stated that 5% of basic salary was deducted during 2001 to 2010 towards Gratuity. This aspect has been examined with reference to terms and conditions of your appointment letter.

Your second statement is that directors of your company resigned in 2008 and sold the company. The name of company was also changed. The important question arises at this stage whether you were given a fresh letter of appointment by the new company or the new company automatically absorbed all the old employees and continue to pay salary as it is. Clarification is required on these points.

Your inquiry whether any company can deduct 5% towards Gratuity. In this context the legal provision is very clear that deduction towards gratuity cannot be made from salary.

It may be further clarified that gratuity is not transferable. Gratuity is payable in case of closure of company or termination of employment where termination is not as a measure of specified major penalty.

Regarding your third question to know about the pact between old company and new company, it is informed that such information can be obtained by filing an RTI application with the Registrar of Companies where the company is registered.

For the fourth question of claim of past salary it may be informed that you have to first give written application to the employers for payment of your outstanding dues. Thereafter you may move to the court of civil jurisdiction to claim your dues.

Thanks and regards


your case is complicated as given above.
first, what is the relationship between old company and new company.
second, are you only the affected person or anyone else is also similarly afected. in such a case, you can appoint a lawyer, and pursue through court, who will be right authority to take up with new company. its all depend on first point. as explained by mr madhu if the new employer has not agreed to take any liability from old employer, then the case will be directed to old employer.
it is the ultimate responsibility of the md / directors to ensure all employees are fullfilled before closing / selling a unit
if you approach the labour office, they will be in a position to guide you properly.
if you go through right lawyer, they will find out incase any pre-incidence like this and your case will be very strong.
suggest to go lawyer and labour office for solution

Your case is sensitive and complicated. Stand taken by your old company is
contrary to the provisions of Payment of Gratuity Act.
Send legal notice through an expert Advocate (specialised in Labour Laws) and
wait for reply from your company/directors.
Please also share the outcome of result, through this forum.
Thanks, R K Nair

hi any one can give me an explanation regarding how to draft a compensation plan for our company we are in to imports and exports and we have power plant.
First of all, conduct a wage/salary survey and collect data from other companies, which
belong to the same industry of yours, in your State
Then you can think about preparing a compensation plan.
R K Nair

5% deduction for gratuity is contarary to the provision of Payment of Gratuaity Act., The deduction should be 4.81% of Basic + D.A. As per my view ,to resolve the issue firstly write the letter to company and send it by register marking copy to Local Govt. labour office and if you will not received any reply than approch to labour office or for legal notice.

Thank you mr. RKN, can you just share your experience about compensation plan like how to collect the information and how to make a plan based on the information collected.
Dear M_zanji,
I aware something about gratuity like employer only have to contribute the gratuity amount on the basis of current basic slary+da/26*15*number of years worked. is it right to deduct amount from employee on the name of gratuity.

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