Dear All,
Greetings! I have a query regarding the gratuity of an employee who has been transferred within a group of companies. The employee has completed almost 10+ years in one company and has now been transferred to another company within the same group.
Is it possible to transfer his gratuity from one company to another without changing his Date of Joining (DOJ)?
Kindly guide me on this and, if possible, share the provisions outlined in the Gratuity Act.
From India, Mumbai
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Greetings! I have a query regarding the gratuity of an employee who has been transferred within a group of companies. The employee has completed almost 10+ years in one company and has now been transferred to another company within the same group.
Is it possible to transfer his gratuity from one company to another without changing his Date of Joining (DOJ)?
Kindly guide me on this and, if possible, share the provisions outlined in the Gratuity Act.
From India, Mumbai
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Dear Snehal,
There is no such legal term "group company" or "group of companies" when more than one company is owned by the same individuals or a family. Every company is a separate legal entity in the eye of the law unless there is functional integrality or a common balance sheet. So, when an employee on the rolls of one company is transferred to another, there should be a formal agreement between the two about the continuity of the employee's services under transfer to avoid future questions like the one you've just raised. The concerned employee should also be informed about this fact in the transfer orders or by any other means. If there is any insurance scheme regarding gratuity in both companies with the same insurer, I am not sure about the formalities. If the transfer is a permanent arrangement, it would be better to settle the gratuity for the services rendered in the transferor company itself.
From India, Salem
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6108There is no such legal term "group company" or "group of companies" when more than one company is owned by the same individuals or a family. Every company is a separate legal entity in the eye of the law unless there is functional integrality or a common balance sheet. So, when an employee on the rolls of one company is transferred to another, there should be a formal agreement between the two about the continuity of the employee's services under transfer to avoid future questions like the one you've just raised. The concerned employee should also be informed about this fact in the transfer orders or by any other means. If there is any insurance scheme regarding gratuity in both companies with the same insurer, I am not sure about the formalities. If the transfer is a permanent arrangement, it would be better to settle the gratuity for the services rendered in the transferor company itself.
From India, Salem
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Gratuity Act-Teachers-Ma dhya Pradesh.docx
Payment of Gratuity Act, 1972 & The Rules.ppt