Gratuity is a terminal benefit payable to an employee based on certain no of years of his continuous and blemishless service under the same employer. Therefore, the question of transfer of gratuity from one employer/establishment to another does not arise normally for the reason that each establishment is a separate legal entity. However, in the case of several establishments functioning under the same employer and if their service conditions permit inter-unit transfers, then whatever the quantum of service rendered in one establishment can be transferred to another for the purpose of computation of gratuity.
26th May 2017 From India, Salem
27th May 2017
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,
(a) on his superannuation, or
(b)on his retirement or resignation,
(c) on his death or disablement due to accident or disease.
It is seen from the above that Gratuity is payable on termination, not on transfer. However, if certain sister concerns or subsidiary companies are under the same employer, and conditions of service provide for transfer from one company to another, then only the proportionate contribution of gratuity is transferred. There is no government order on it, but the Govt. has no objection to transfer of proportionate share of Gratuity from one company to another company if both the companies are under the same group of companies.
29th May 2017 From India, New Delhi
Srivastava has given an appropriate answer quoting the relevant section of the Payment of Gratuity Act,1972. The definition of the term " employer " u/s 2(f) of the Act also specifies it is the person or authority having ultimate control over the establishment mentioned in sec.1(3). The various establishments mentioned in clauses (a),(b) and (c) of ss (3) of sec.1 can be a single establishment or a group of establishments depending upon their constitution such as sole proprietorship, partnership, company registered under the Companies Act,1956 or a society registered under the Societies Registration Act with or without branches. But, for all purposes under the PG Act,1972 the employer remains the same person in relation to the establishment as a whole even in the case of inter-unit transfer of his employees among his various units.
4th June 2017 From India, Salem