Ganesh S Iyer
From India, Mumbai
As per my understanding, there is no specific age limit in private sector for retirement/superannuation. But if you go deeper into this topic, there is a specific update for private sector employees in Karnataka where recently the government has mentioned the retirement age for private employees under the Industrial Employment (standing orders) Act, 1946 as 60. Even though, this will not be applicable to IT, IT-enabled Services, startups, BPO and other knowledge-based industries at least till January 25, 2019. The government has exempted these industries from the Karnataka Industrial Employment (Standing Orders) Rules 1961, till this date. In other parts of India, if you have a standing order stating that the retirement age on 58, it can be followed.
As per the EPF act, on attaining 58 years of age, the PF membership of the employee can be ceased by considering it as superannuation. But it didn't mention that an employee working in the Private Sector has to mandatorily retire at the age of 58. So the employee can still work in the organization if he is fit to fulfil his primary job responsibilities. But for gratuity, this age factor is not considered as a criteria.
So, in this particular case, I think, after completion of the age of 58, the employee can be offered a consultant position for a fixed period or a contractual position for a fixed period. In that case, a fresh offer letter needs to be extended to the employee by making sure that there is a gap in the fisrt and last tenure. Also, with the consent of the employee, the process for settling his gratuity can be initiated. If the companyis offering a service for a period of less than 5 years [4.6 yrs], then gratuity may not come into picture. In this context, company can save a good amount of money as employer contribution to PF, Gratuity etc. wouldn't be required. It is also very important to ensure that before offering the consultant/ contractual offers, the full and final settlement of the employee is completed as well as the proper exit documents are issued to the employee.
As per my knowledge, this would help the company to save a lot from the CTC for that employee. How ever, statutory contributions such as Professional Tax, Income Tax will be applicable to the employee.
Appreciating the views of HR seniors regarding my above mentioned points.
From India, Bengaluru
2. Law always fixes the minimum limit when it comes to the benefit of the employees. You can continue to extend all statutory benefits like PF, Gratuity, Bonus & ESI etc.
3. The option to continue lie with both.
From India, Thane