Ravalhitt
Head Hr & Admin
Nathrao
Insolvency N Gst Professional
Suresh2511
Labour Consultant
+1 Other

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Dear All,
I have one case in which employee claimed for Gratuity amount from Company, he registered a case against the organization by stating that the gratuity amount was a part of his CTC which was mentioned in his offer and appointment letter.
He completed 4 years of his duty in our organization.
Please suggest what can be done in this case.
Thanks,
Hitesh Raval

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Completion of mere four years does not give rise to gratuity claim.
It is minimum 5 years continuous service
Hi, gratuity has to be paid, there is no criteria of five year service in this particular case,if gratuity is apart of CTC,and as mentioned in appointment/letter,it is against the sprite of labor laws.
S S Rawat,
Consultant.
Mr Rawat,
I would put it this way, if amounts are deducted from pay, calling it gratuity, it merely becomes ex gratia, if tenure is less than 5 years -contiunous service as laid down in the Act.
First of all any kind of benefit provided by law is not a part of salary such as PF, ESI, Bonus, Gratuity etc. It is an additional cost to Company as employer's contribution to the respective accounts.
Companies are showing this separately as Cost to Company in respect of employees whose salaries are more than the Minimum Wages.
For example if an employee's gross salary is Rs.16,000 per month and the minimum wages as per scheduled industry is Rs.15,000 per month, company will not show his COMPANY'S contribution to PF, ESI, Gratuity, Bonus, etc. as CTC because his salary will fall below the Minimum Wages.
Some companies are taking undue advantages only in the cases of employees drawing higher salaries. While negotiating salary one should ask for details of "Take Home Salary" or entire monthly salary calculation.
Coming back to payment of Gratuity contribution which was shown as part of your salary, company should refund the same to you as you put 4 yrs. of service. Because I am sure that it is not shown in you appointment letter that you should serve for minimum period of XX years to get your deducted gratuity contribution.
After putting 5 years of service you are entitled for Gratuity as per law and that company is bound to pay even you do not contribute for the same.
Anyways your company will not pay you the same easily and hence you have to fight legally with cost.
Regards,
Suresh
Dear Hitesh,
My views are different. First of all CTC has no legal status. CTC is expressed as yearly cost to Company to engage one employee for employment. Many Organization expressed it as CTC 6 lac per annum. Now one employee who has worked for say 7 months and resigned will then ask for the whole year salary as it is mentioned in CTC. Every payment is conditional. If there is no leave but the employee still on roll of the Organization will be without pay though in appointment letter it is mentioned as monthly salary and not mentioned that if you have no leave you will be without pay.
Gratuity payment needs to fulfill certain period of eligibility service. If the employee is fulfilling the eligibility criteria it must be paid otherwise the Organization is not legally bound to pay Gratuity, it may be discretion of the Organization.
Come to the concept of take home salary of higher paid employees. It is not the right approach. Two employees have same CTC but different take home (for higher level taxable employee) because of different tax savings planning. It is always compared on the basis of Cash component, Retirement benefit, Other facilities and finally to understand CTC components in detail.
Thanks & Regards,
S K Bandyopadhyay(West Bengal)
USD HR Solutions
+91 98310 81531

www.usdhrs.in
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