Labour Law & Hr Consultant
Consultant In Education, Real Estate, Home
Sr. Manager (p&a)
How comes the question of payment of gratuity to the employee when his services have not yet been terminated either on his own by way of resignation or by the employer by dismissal for the misconduct of unauthorized absence/abandonment of service?
Besides, pending dues of the personal loan availed of by the employee from an outside agency can not be a proper reason against taking disciplinary action for any misconduct committed by him as long as the employer is not a surety to the loan but given only an acceptance to deduct the due periodically and pay it.
Therefore initiate disciplinary action against him immediately for his unauthorised absence from 05-11-2016 by calling for his explanation, framing of charges, conducting a domestic enquiry, issuing second show-cause notice and finally passing a speaking order of dismissal. In case of no response from him at any stage or non-participation in the enquiry, based on the ex-parte enquiry, you can take the final action. But ensure service of the notices on him by publication in the local news paper in case of no response or by usual means of service.
Any period of unauthorized absence can not disentitle for gratuity for that period unless it is ordered by the employer as a break in service.
Even otherwise, the period of absence from 5-11-2016 can not be taken into a/c for the purpose of gratuity as he has been continuously absent.
Since the sum total of basic+D.A under the MW is more than that of your industry wages last payable, you have to take into a/c only the MW.
No necessity to obtain NOC from any outside creditor to the employee for the settlement of his statutory terminal benefits.
15th November 2017 From India, Salem
Please go through Section 4(1) of Payment of Gratuity ACt 1972-Payment of gratuity.
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, or
(c) on his death or disablement due to accident or disease
(6) Notwithstanding anything contained in sub-section (1):
(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.
(b) the gratuity payable to an employee 16[may be wholly or partially forfeited]
(i) if the services of such employee have been terminated for his riotous or disorderly
conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
In the instant case, the employee has absconded and the Management has taken only steps for commencing the disciplinary action under service Rules as applicable. There fore the status of the employee is: " on Unauthorised absence". The question of termination comes only after final decision of the Management. Therefore it is too early to discuss the issue of Gratuity.
In the 2nd Issue: Management has agreed to recover the Loan in EMI out of his salary, and will disburse the Terminal benefits only after producing NOC from the Bank. This is only an understanding and a matter of good gesture of the Management in helping its employees. This condition may play a role-when the said employee resigns/ on Termination/on Retirement, and the Management settles the Terminal benefits ( as per Standing Instructions or Service Rules as applicable)without insisting for NOC from the Bank. It may also be noted that under Sec 14 of the Act (amended) Gratuity cannot be attached also.
There fore for taking disciplinary action against the absconded employee, question of "NOC" from the Bank doesn't arise and it has no role to play in the disciplinary proceedings.
24th November 2017 From India, Bangalore
26th November 2017 From India, Madipakkam