Umakanthan53
Labour Law & Hr Consultant
Gpagarwal
Ngo Kastaharan (for Legal Help )
Srinath Sai Ram
Hr Manager
Riteshmaity
Labour Law Advocate

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Sir I worked in an educational institution as HR I want to clarify the payment of gratuity.
An employee who had violate against education institution rules and regulation, whether forfeit his gratuity for compensation ? Pl refer the case laws
V.Selvakkumar

Dear Selvakkumar,

Gratuity is a lumpsum terminal benefit based on the length of service and lastdrawn wages of the concerned employee.

Among the various kinds of termination of employment, dismissal is also one. Dismissal in relation to payment of gratuity implies the dismissal for certain proven misconducts only as per sec.4(6) of the Payment of Gratuity Act,1972. Cl (a) of sec.4(6) contemplates proportionate forfeiture of gratuity and Cl (b) deals with total and partial forfeiture.

Therefore,

(A)what the essentials for proportinate forfeiture of gratuity of an employee are that (i) there should be the occasion of his dismissal (ii) that should be for certain misconduct of wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer and (iii) the forfeiture should be strictly to the extent of damage or loss so caused only.

(B) Regarding total/partial forfeiture at the discretion of the employer, the dismissal must be for riotous or disorderly conduct or for any other act of violence or the commission of any offence involving moral turpitude in the course of his/her employment.

What you've simply mentioned is that the employee had violated the rules and regulations of the institution only. It would not be suffice for forfeiture of gratuity in the absence of the events afore-mentioned.

You can forfeit gratuity only if the service of the employee is terminated for misconduct related to moral turpitude / missappriation of fund after conducting proper domestic enquiry giving him chance to defend himself as per the principe of natural justice.
Before forfeiting Gratuity, you as Employer should issue Show Cause notice to the employee asking him to "Show Cause" why his gratuity should not be forfeited for the reported Misconduct.Based on his reply and after applying all parameters as suggested by Mr Umakanthan you have to take a decision
Sir, various ALC,RLC and high court(s) have decided that the gratuity should be paid even if one has been compulsorily retired as punishment. Further No capital punishment under Major penality should be inflicted where inquiry is being conducted after superannuation of employee. Termination is different than a compulsary retirements. g.p.agarwal, lucknow
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