Saswatabanerjee
Partner - Risk Management
Tajsateesh
Recruitment/talent Acquisition, Career Counselling
Sushilkluthra@gmail.com
Consultant In Legal Matters
Rdsyadav
Educator, Management Consultant & Trainer
Vinay62
Resouce Plannin
Mousmi24
Hr & Admin Manager
+2 Others

Hello,
I have a query - one of our employee has resigned from the company he will be releived next month. This month we are paying all the other employees Ex-gratia is he also eligible for it. we haven't mentioned it as a part of CTC only the appointment letter says 'The Company may pay on an annual basis a special merit ex-gratia' .
Experts please give your comments as well as any legal implication
Thanks & Regards
Mousmi
25th June 2015 From India, Pune
Well he also should be paid exgratia along with other elements of full and final settlement.
I dont think ex gratia is included in CTC anyway.
Exgratia is a voluntary payment by the company and it cannot be insisted upon as a matter of right.
25th June 2015 From India, Pune
#Anonymous
Dear Nathrao
one side you are saying its a voluntary payment
other side you are saying that payment should be made for ex gratia
Dear Clearly its a voluntary payment so employee have not any legal right for this, so its the wish of employer either pay or not
i think thread should be closed here
25th June 2015 From India, Faridabad
Dear Mahesh Sharma,
My comment about it being basically a voluntary payment and in the case posted by querist-it should be paid was based on the fact that querist had stated all other employees were being paid ex gratia.
Keeping that fact in mind-advice was tendered that though it is voluntary in this case it should be paid.
i hope this clears things.
25th June 2015 From India, Pune
The employee is still on the roll of company. The ex-gratia payment may be made to employee which will demonstrate moral value of the employer.
25th June 2015 From India, Delhi
Ex gratis is completely voluntary and does not give right to employees to enforce it unless it was a part of a wage accord or any contract of employment where it is specifically included
Ex gratia is a bonus. It's intended to reward someone who contributed to the success of business. It is also essentially intended for retention of employees
In view of the above it is the decision of the management as to what they wish to do. If it is that he had a serious contribution then it would be fair. Specially if they intend to keep a good repot for future
If not, then what's the use of giving a bonus to someone who has already decided his future is not with you
25th June 2015 From India, Mumbai
If the said employee is covered as a workman within the definition of ID Act then denial of ex-gratia payment to him if he is eligible for it, will amount to unfair labour practice by exercising partiality or favouratism when it is being paid all other employees.
Thanks
Sushil
25th June 2015 From India, New Delhi
Ex-gratia is being practiced just to giving favor to an employee or to help them and paying as additional amount . Employee don't have any right to ask for Ex-gratia but they can request only for that . However If you are down-sizing you can give your employees and may get blessings from them if they were loyal, honest and hard worker and performed well during the employment period .
26th June 2015 From Pakistan, Karachi
If your organization has been paying to outgoing employees and practice has precedence, ex-gratia should also be considered
26th June 2015 From India, Delhi
Hello Mousmi,

Ex-gratia, like Saswata Banerjee pointed-out, is another form of Bonus.

From what you mentioned, it looks like that it's NOT the employee who IS ASKING FOR IT but the Company seems to be in 2 minds whether to pay or not--pl reconfirm on this aspect.

And any Ex-gratia/Bonus is paid for the PAST PERFORMANCE--1 year in your case. And this employee has been on the rolls as well as attending office & performing during the past 1 year. You also mentioned that the Ex-gratia is being paid THIS month & this employee is being relieved NEXT month. So, as on the day the Ex-gratia is being paid, he will still be on the permanent rolls of the Company. Goes without saying that he deserves being paid.

If you wish to avoid paying the ex-gratia just because he has resigned, there MAY NOT be any legal issues, but what you would surely be conveying the 'perception' to the other employees is that "this Company can just use you".

Like other members pointed-out, Ex-gratia is BOTH for good performance in the recent past AS WELL AS a retention tool for the future--NOT just for the individual, but a company-wide tool.

Rgds,

TS
28th June 2015 From India, Hyderabad
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