Hello: I am working in a reputed private organisation on contractual basis for 4 years and 8 months. Each year the contract of employment gets renewed. And also with in the entire period of employment twice the contractor were changed by the PE. All other statutory things e.g PF/ ESI are being deducted from my earnings.
In this circumstances request your valuable suggestions whether I am entitled to get Gratuity benefit or not.

From India, Pune
Please read entire period of employment as 5 years and 8 months !!
From India, Pune
Legally, you were employed by the Contractor and this Contractor is your employer. One should complete 5 years of service with the Employer.
PE has changed the contractor twice. This means, you have become an employee of three different contractors and hence would not have completed five years of service.Technically all your employers have no liability to pay Gratuity.
Now the question is whether the PE is liable to pay Gratuity?
This requires closer examination of facts.
1. Were you doing the same job?
2. Different contractors under whom you were employed were assigned the same assignment?
3. Are you the only person who was taken over from one contractor to another?
And more such questions need to be addressed. If it could be proved that the the PE has been changing the contractors to subvent law, then you can get gratuity. But if you happen to be one such person where you have switched jobs from one contractor to another on your own, then you will not be eligible for gratuity.

From India, Chennai
Hello Sir,
Thank you so much for your prompt and clear response!!
Sir.. referencing to your queries, in these years only the name of contractors and pay structures have got changed.. everything else is the same. and this transitions happens as per the company policy to entire outsourced population (around 3000).
Now, while I have put my resignation they (PE) have clearly denied to pay the Gratuity amount stating "please talk to your payroll company" and my payroll company is saying "If get the amount from PE, we will contact you"
I don't know how to describe my current situation. Please guide.

From India, Pune
If you want to get justice, you can approach Gratuity authority in your area and you can engage an advocate to represent your case.

I always advise individual white collared employees to be cautious before approaching courts for some small amounts. Once you start the litigation process, your employer may give certain feedback to your current employer and generally employers do not appreciate such litigations..

If there are 3000 such employees, the amount involved will be huge for the PE and surely they will fight it out. In all such litigations, chances of winning is only 50%

You are not going for a job and if you opt to be in business then you can chose litigation.

However, after joining in your new Company, you can chose to send a legal notice. PE may not respond to the Notice. Keep sending two or three notices. Wait for three to four months but send atleast three notices. Based on the response, then you can chose to file a plaint before the Gratuity Authority of your area which will be in the Labour Department


From India, Chennai
Every Principal employer is taking precautionary measures while awarding the contact that all liabilities towards PF, ESI, Gratuity, Employees' Compensation, Insurance, wages, Bonus etc. are borne by the contractor only. The contractors' Statutory Compliance are carried out by Third Party where all the original documents are verified meeting the compliance and then & then only the bills are release for payment.

The PE ensures that all the contractor employees are provided with appointment letters, payslips, leave wages etc. by the Contractor. Once the employee accepts the offer of the new contractor, his employment ceases with the earlier one and therefore the question of paying gratuity does not arise irrespective of the employee work in the Principal Employer Company premises even for more than 10 years.

Because generally the contract is awarded for a maximum period of 3 years, now days for 2 years. For Gratuity eligibility, you have to serve in one organisation for more than 5 years.

PF, ESI deductions are statutory requirement, so contractor is bound to deduct it.

Now days it is Mandatory to every contractor to have PF & ESI registration no. (Code no.) for pre-qualifying to fill Tender.



From India, Thane
Approach Gratuity Controlling Authority with copies of all Documents.Implead, Both Contractors and Principal Employer as necessary parties to the Claim.You are Eligible for Gratuity provided there was no break in service though worked with different Contractors supplying manpower for Same Principal Employer
From India, New Delhi
Dear Friend,
After reading the facts of your case, it appears to me that you are employed through contractor on a perennial job which is illegal on the part of principal Employer.
Frequently changing contractors prove that Principal Employer is your real employer and the contractors are only name lenders. By employing such tactics, your Principal Employer is indulging in unfair labor practices.
As advised above you should approach gratuity authority of the area and present your case before him.
You can also raise an industrial dispute before conciliation officer if you are a workmen claiming permanent employee status of Principal Employer. This will take long time but based on the facts provided here in above by you, you have a very strong case.

From India, Thane
Please stop using small terms like PE. always use full abbreviation.
From India, Thane
Dear All,

User been working with sub-contractors. He has no direct or indirect connection with the Principal Employer because he was never called by the PE for any interview nor offer any job during his employment directly. Therefore he cannot claim as an employee of the PE.

Secondly the contractors are awarded specialised jobs to carryout in Client's premises for which they have to approach to The Assistant Labour Commissioner (Licensing Authority) for issuance of the License to carryout the respective jobs. Legally the contractors can commence job only after obtaining Labour License. The Licensing Authority verifies the license application alongwith Form V issued by the PE and then only issues the license.

We all are advising the user to approach to the Authority for regularising his services with the PE, which Authority we are recommending the one who has issued the license? That means the authority is permitting the contractor to carryout the job without verifying the facts and blindly.

As you all aware that in India Lakhs of Contract Labourers are working in Public Sectors like ONGC, BPCL, HPCL, IOCL, Mazgaon Docks etc. and neither any Govt. nor any Court is thinking of regularising their services. Had it been so easy everyone would have become permanent employee in this country. In view of the above I personally feel that we should not give advise which is not going to help the person who is seeking opinion from the members.

Thanks & Regards,


From India, Thane

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