Umakanthan53
Labour Law & Hr Consultant
Saswatabanerjee
Partner - Risk Management
9871103011
Private Consultant On Labour Laws
+2 Others

Hai I am V.Visali from vijayawada I have a doubt regarding calculation of Gratuity on Consolidated salary amount. Consolidated salary amount is Rs.55000/-
Cite.Co is a repository of information created by your industry peers and experienced seniors made possible with help from our prime sponsors like:

TALENTEDGE Who provide a platform for "interactive anywhere learning". Courses from top reputed institutes like IIM, XLRI, MICA. View Courses

FACTOHR - Provides Customised Payroll, GPS Enabled Attendance, Travel, Performance Management, HRMS that can help streamline your organisation. Explore Features

Register Here and help by adding your inputs. Contributions From Other Members Follow Below...
Dear Visali, When the last-drawn salary is consolidated, gratuity has to be calculated on the basis of the entire salary.
Do you mean to say the salary slip does not have any breakup of the salary ? There is only one amount ? No details of the components ?
kindly provide me holiday list for the year 2017 under tamilnadu shops and establishment act, engilsh version required
Gratuity is calculated on the Basic Salary, as mentioned by Mr. Banerjee there would be a salary breakup e.g. Basic, HRA, Conveyance, Other Allowances kindly check and revert so as to give appropriate view by the forum members. If there is no breakup in Salary then the entire consolidated Salary will be treated as basic salary and Gratuity has to be worked accordingly, as per my view
if 55,000 is basic salary then gratuity calculate on this amount and the formula for gratuity is (55,000/26*15*6) basic salary/total day in a month without sunday*fifteen day of a month*total year=1,90,385
to shri Umakanthan53,
thanks for clarifying that when the last-drawn salary is consolidated, gratuity has to be calculated on the basis of the entire salary.. Are there any case laws of high courts or supreme court or rule to cite when claiming Gratuity on consolidated salary? or appeal to labour commisionner?
Dear Vasant,

Sorry, I didn't come across any judgment either by any High Court or the Supreme Court so far on this aspect. Therefore what the requirement is a perspicacious analysis of the term " wages" as defined u/s 2(s) of the Payment of Gratuity Act,1972 which is as hereunder:

" Sec.2(s) "wages" means all emoluments which are earned by an employee while

on duty or on leave in accordance with the terms and conditions of his

employment and which are paid or are payable to him in cash and includes

dearness allowance but does not include any bonus, commission, houserent

allowance, ovrime wages and any other allowance. "

For the sake of exact understanding, the above definition can be divided into 3 parts viz., (a) the defining part (b) the inclusive part and (c) the exclusive part.

By part (a) wages means all emoluments earned by the employee while on duty or on leave in accordance with the terms and conditions of employment and such emoluments be paid or payable in cash. The legal meaning of the term 'emoluments' is a return arising from office or employment usually in the form of compensation or perquisites. Since gratuity is a terminal benefit based on service already rendered, the necessity for intoducing inclusion of something and exclusion of some other things to the emoluments, therefore, becomes imperative. Hence, the statute introduces the inclusive and exclusive parts.

By part (b), wages include dearness allowance.

By part(c), wages exclude other payments in the form of cash viz., bonus, commission, house-rent allowance, overtime wages and other allowance. In salary and wage administration, as basic wages or salary is fixed and invariable, allowances are granted in addition for specific purposes in connection with the work of the employees as well as its duration.That is the reasoning for the inclusion of D.A to and the exclusion of the specfic other items from the emoluments paid or payable to an employed person.

As you are well aware, a consolidated wage or salay is fixed through out the tenure of employment. Therefore, it has to be taken as a whole for the purpose of computation of gratuity on the legal or normal termination of employment of such employees.

Hope you are convinced.
Dear Sh Mohan ji,
THE TAMIL NADU INDUSTRIAL ESTABLISHMENTS [NATIONAL AND FESTIVAL HOLIDAYS] ACT, 1958 AND THE TAMIL NADU INDUSTRIAL
ESTABLISHMENTS [NATIONAL AND FESTIVAL HOLIDAYS] RULES 1959 is applicable to all industrial and other establishments including shops in the State of Tamilnadu.
The employer is under obligation to allow every employee in each calendar year, a holiday on 26th Jan, 15th Aug.,2nd Oct. and FIVE other holidays. Such festivals are required to be decided in consultation with the existing union or representatives of employees before beginning of the year. The employer shall send a statement showing the holidays to be allowed in the calendar year to the Inspector in the prescribed form.
BS Kalsi,
Member Since August, 2011
Add Reply Start A New Discussion






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2019 Cite.Co™