Queries
Hi, I have a query regarding Gratuity. I was employed from 19-Jul-2012 to 28-Apr-2014 as a Fixed Term Hire (Contractual employee). I was full-time employee, and received PF during this tenure. I ended that contract on 28-Apr-2014 and got a regular position starting 29-Apr-2014 in the same company (however, it was considered as a new appointment/contract, my employee ID changed) and served till 10-Aug-2017.

1. Will I be eligible for Gratuity?
2. Can someone please provide me legal references that would explicitly cover above situation under Gratuity Act?

I would highly appreciate any help.

Thanks,
Salil J
1st December 2017 From India, Bengaluru

PARTICIPATING IN DISCUSSION:
Umakanthan53
Labour Law & Hr Consultant
Vishalmgrhr
Human Resource Professional
Ashutosh Srivastava
Sr. Manager Hr & Complaince
Verma_gk@yahoo.com
Sme-hr & Employment Laws
Salilrjoshi
It Industry
+1 Other

nathrao 1549
To my mind you are entitled for gratuity.
Contract employees if they work for more than five years get gratuity.
Looking at you case, you have more than 5 years continuous service.
You submit claim for gratuity and wait for response.
Meantime visit the labour officer of the area and take his opinion also.
2nd December 2017 From India, Pune

Hello Querist,

Refer to your queries my submission as per best of my knowledge:-

Section 2(A) is imperative to determine your uninterrupted continuous services for eligibility ...before move to the conclusion or advise seek clarity from you such as; What was your designation? Were you a workman or non-workman? If workman then what are the provisions applicable in certified standing orders? What are the T&C of your fixed term appointment letter?Does your PF contribution on same account Number-Establishment and individual? Does employer denied to pay gratuity? If yes on what grounds?

Apparently or what I am presuming your case have substance to take it forward with Controlling or appellate authority.

Regards,

Gajendra Verma
9929722054
2nd December 2017 From India

Hi, You are eligible for gratuity because you are working in same same company & you have already completed five years in same company.
2nd December 2017 From India, Haldwani

Hi,

I don't think that your eligible for gratuity because you started your career on 19-jul-2012 as a contractual employee up to 28-Apr-2014. it's around 1yr 9months service after that you got a regular position on 29-Apr-2014 to 10-Aug-2017. after confirmation of your service, you completed 3yrs 4months of service only. But as per gratuity act the employee who are completed is 5years of service or employee who are completed 4years and 240working days they are entitled for the gratuity. so before applying please check and go for next step. Actually your completed 5years of service in one organisation but in that starting two years you worked as a contractual employee so it will not taken into consideration for gratuity when your service was regularized from that day to 5years will elgible for gratuity.

Regards,
B.l.V.Pavan
4th December 2017 From India, Pune

Hi Salil
As per my knowledge , you will not be entitled for gratuity as you have not completed continuous service of five years ( 4 years +6 months) being as contractual employee 19-Jul-2012 to 28-Apr-2014 as a Fixed Term Hire.

You have mentioned that, later it was considered as a new appointment/contract, employee ID changed) and served till 10-Aug-2017 , and if they have issued fresh AL and employee code has changed then it means , your previous contract has ended and fresh service has started. hence your new term for continuous period will start from Aug 29,2014. your previous period of service can't be added for gratuity (legally) with your new appointment whether it is in the same organisation.

PF number would also change as new employee. They have to mentioned as" new employee"
Have they issued any letter to you that " as per your contract, the same is ended on ...............) and settle the account for the ended contract?

You may eligible for gratuity if they had extended your contract, without F&F settlement of previous contract and continues PF contribution in the same number.

Regards,

Ashutosh
6th December 2017 From India, Mumbai

Dear friends,
Among the 5 learned members participating in this discussion so far, 2 members ( Mr.Rao & Mr.VKS ) are certainly in favour of the questioner's eligibility for gratuity under the Payment of Gratuity Act,1972 for the entire service rendered by him under the same employer including the Fixed Term Contract Service while the remaining 2 ( Mr.Pavan & Mr.Ashutosh ) are not because of the different natures of the FTC service and the subsequent regular service as well as the non-completion of the minimum qualifying continuous service stipulated under the Act by the questioner in either case; the 5th member Mr.Gajendra Verma has expressed his inconclusiveness based on the questions of whether the questioner was an employee and change in the P.F number and therefore suggested to leave the matter to the decision of the Controlling Authority under the P.G Act,1972.
Therefore, let me also try and see whether would I be able to contribute some thing substantial to resolve the issue.
First and foremost, the Payment of Gratuity Act,1972 is, in itself, a complete code for the matter of gratuity in respect of industrial employment. Therefore, it is independent of any other Labor Law except for the purpose of its application u/s 1(3) of the Act.

Similarly, the definition of the term "employee" u/s 2(e) of the Act, as it stands today, is a wholesome definition covering all people employed for hire or reward. There is no distinction in respect of the pattern of employment or method of payment or its quantum. What is important is that the person claiming gratuity under the Act should have been "employed" under a " Contract OF Service " and not " engaged" under a " Contract FOR Service ". In essence, as per the observation of the hon'ble Patna High Court in Sukhandan Thakkur v. State of Bihar [ ILR 35 Pat I ] " employment means not only an appointment to any office for the first time but also the continuity of that appointment ". It follows therefore, a Fixed Term Contract of service is also a contract of service and an FTC employee is also an employee under the Act as the three ingredients of the concept of employment viz., employer, employee and the contract of employment are present without ant doubt.

From 19-07-2012 to 28-04-2014, the questioner has worked as an FTC employee in the establishment; from 29-04-2014 to 10-08-2017, he has worked again in the same establishment. Actually there is no break in service. Employee and Employer are being the same while the contract only got modified from that of a fixed contract to a perennial contract. As his entire length of service under both the contracts in the same establishment is more than 5 years, he is eligible for gratuity. If the employer refutes this proposition and refuses to pay him gratuity, the questioner can approach the Controlling Authority with a claim u/s 7 of the Act
7th December 2017 From India, Salem

nathrao 1549
Contract employees are entitled for gratuity if they work 5years continous service.Here employee has worked as contract employee and permanent employee.Both services put together are more than 5 years.
It is clear gratuity is to be paid.
People are referring to PF ,contribution.Here PF and Gratuity have no connection.
Secondly change of employee Id-There will be difference between contractual employee Id and employee Id, but it does not affect gratuity entitlement.
He should ask the company for gratuity and if problems come up approach Lbour Commissioner of area for help.
9th December 2017 From India, Pune

Respected forum members,

Apologies for posting a response late. I went through the various valuable opinions posted on this thread, and appreciate your help. Mr. Umakanthan has nicely summarized the discussion and has also provided important information.

Mr. Umakanthan,
Sir, I have gone through your earlier posts on this forum and was hoping that you would opine on this thread too. Your response here is truly insightful and will certainly help me approach the Controlling Authority. Your interpretation of my case is accurate. Thanks a lot for your astute feedback!

Mr. Verma,
I think Mr. Umakanthan's post indirectly addresses your question (and he is right on all accounts), but for sake of completion, I am trying to answer your questions here:

What was your designation? "Software Engineer".

Were you a workman or non-workman? "I was not a supervisor/manager, so I think I was a workman, please correct me if that is wrong".

If workman then what are the provisions applicable in certified standing orders? "I am a layman (computer science background), and am unable to answer this question :-)".

What are the T&C of your fixed term appointment letter? "It enabled me for statuatory benefits, if there is something specific I should point out, kindly let me know".

Does your PF contribution on same account Number-Establishment and individual? Does employer denied to pay gratuity? If yes on what grounds? "No, PF account changed as well. Yes, employer has denied gratuity, and here is the response received from them - We evaluated your request, and reviewed the same in line with legal team as well. We would like to inform you that the employment contracts for the period of services were different and your FTH contract was specific to defined period. Hence on this background the gratuity computation to consider the two different contract period as continuation cannot be considered."

Hope this help. I believe that Mr. Umakanthan's response already covers this points, so at this point, I am not expecting any fresh responses unless any of the above answers change the interpretation of the matter.

Again, I appreciate the help I received from all of you.

Thanks,

Salil
9th December 2017 From India, Bengaluru

Mr. Nathrao,

Thanks a lot for your feedback. I find it in sync with Mr. Umakanthan's response, and will certainly help me approach the matter.

Regards,
Salil
9th December 2017 From India, Bengaluru


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