Kindly let me know if an employer open 3-4 private companies and keep the employees below 10 in each co./establishment then an employee entitled to get gratuity? There are so many cases where the clever employer do like this.I have 2-3 friends those who are working in Delhi for the last 20 years and them the same employer has opened 2-3 private companies and the same employees are working for all the companies but the employer has been enrolled them in different companies in such a way that the no.of employees does not reach upto 10. What will be the solution to get the gratuity for those who have spent whole life with same employer?
From India, New Delhi

Foundation, advanced and integrative courses in the area of marketing for executives →
Promoted: Program in Marketing & Sales Management from IIM Kozhikode (Explore Course)
If the units are independent of each other then they may not be entitle to Gratuity but if the management is same & unit are interdepend then certainly they are eligible for Gratuity.
From India, Pune
If you can prove that these different establishments nature of operations are same and there exists financial inter dependency among these firms, the authority under the Payment of Gratuity Act can club these different establishments owned by the same employer and bring coverage to the establishments. This is more effectively done by ESI and PF authorities.
Payment of Gratuity Act is applicable to factories, mines, plantations, ports and oil fields without any reference to the number of employees. The number of 10 or more for coverage applies only if the establishment is a shop or commercial establishment other than a factory, oil field, plantation, port or railway company

From India, Kannur

Approach the labour commissioner of the area with full details.By this time employees will be knowing the full inner details of how the company is working and how management is shifting them from company to company and keeping strength below 10.
Ask for an investigation by Labour Commissioner and hope for the best.But also remember the employee who has complained will be in danger of loosing his job.So unity is strength and employees need to join hands and force the issue.

From India, Pune
Dear Mr Raju,
Already Mr. Madhu has given his valued opinion. Further, no one can prevent anyone from opening or registering company/companies unless untill they are illegal. Here we have to be very sympathetic as it is violation of workman's right. The propritor has alrady taken immunity against laws, rules & cracks existing within the law.
A detailed study of those firms required to be done; 1. Name of propritor/owner/board of directors/ registration with ROC/ Nature of work/Number of workman engaged etc. All the things are to be compiled so as to have the "Definite Meaning" so that a legal fight can be fought. All the workmen involved are to be united stand to fight. But in simple term the workmen engaged are not eligible for gratuity, already you have reasoned out.

From India, Mumbai

If employer is doing all this just to avoid gratuity payments, he is doing a big mistake.
Trail of employees being shifted rom company A to B to C will be there.Employees need to unite and dig out the trail and let Labour Commissioner be aware of this hoodwinking of welfare laws.
Some employee has to take this pain and let facts come out in public knowledge.
Then employer will realise it is cheaper and safer to take compulsory insurance for gratuity rather than take chances of transfer of employees from time to time.
Speak out, write to labour authorities and ask for investigation.

From India, Pune
This is in continuation of all the positive observations of the learned friends. The triple benefits of termination of employment viz., Provident Fund, Pension and Gratuity became possible only after a very long struggle put up by the working classes. These retiral benefits are great sources of solatium to the marginalised masses of labour in the absence of uniform and sufficient social security measures ensured by the State. Of course, the scale of operations of the business establishments, the cumbersome nature of calculations, the periodical administrative costs involved in the running of the separate agencies for the purpose are the practical constraints supporting the selective application of such beneficial social security labor legislations based on the number of employees in the concerned establishments. In reality, this statutory concession is misused by the majority of employers by fragmentation of their business ventures into small,small legal entities under one roof or elsewhere, keeping the employees constantly unaware of the whereabouts of the actual employment by rotating their services frequently within the various establishments so as to avoid them earning the required minimum qualifying service in any one establishment, prevent unionisation of such unorganized workmen, and the like. Unfortunately, the enforcement agencies also seem to be lacking to crack down such unfair labor practices for obvious reasons. So, this is high time that the Central and State Governments should have addressed these issues so as to do away with the selective application of such social security labor legislations on mere numbers in all respects. Let us await the arrival of the proposed Comprehensive Labor Codes in their final shape.
From India, Salem

Dear Mr Uma,
What you have written above is true.
In a context of our nation, past 70 years things have moved on-many good developments, many good laws and so on.But our basic nature has remained a mystery.
Industrialists look for quick gains for themselves by and large and in the process try for short cuts-keep number of employees below 19 for avoiding PF(earlier)
open 3-4 firms and circumvent Gratuity and with overwhelming population and desperate job seekers, these get overlooked and law/regulatory agencies of the State are lethargic and corrupt.
My question is as long as we dont change our quick rich syndrone,no law is going to help.As many laws are there, that many loopholes.Some specialise in finding out loopholes in law.
We have maximum number of laws in the world.
Following law in good spirit and for public good is the only way things can change.
IT Act 1961 is a classic example of amendmentsgalore such that original law has totally changed.
Deep introspection is the need of the hour.Top leaders need to start this introspection cutting across narrow loyalties and work for India as a whole.
Take Japan -no natural resources, totally dependent on imports, but is so productive that they produce more than twice our GDP in a place which is largely mountain and 1/5th of our land mass area and with frequent earthquakes and with far less population.
Top class education, focus on quality and decisive leadership has brought Japan from a totally destroyed nation to where it is now.
We have lessons to learn from this, but will we?
Sorry if post is off topic from normal HR posts.

From India, Pune
I do not understand the Basic Purpose of putting up such questions for discussion. I somewhat am getting a feeling that professional HR/IR issues are getting mixed-up with the concept of basic Social Security, an issue that be uphold by one and all in the society. Even the basic concept of Judiciary is to protect professionalism from criminalisation.
Concept of Social Security in general sense is that it refers to protection provided to individual members of the society by the society against providential mishaps beyond control of an individual person. The underlying philosophy of social security is that the State shall make itself responsible for ensuring a minimum standard of material welfare to all its citizens on a basis wide enough to cover all the main contingencies of life. In other sense, social security is primarily an instrument of social and economic justice.
According to a definition given in the ILO, “Social security is the security that society furnishes through appropriate organisation against certain risks to which its members are exposed. These risks are essentially contingencies of life which the individual of small means cannot effectively provide by his own ability, or foresight alone or even in private combination with his fellows”.
Social Security is defined as “a means of securing an income to take the place of earnings when they are interrupted by unemployment, sickness or accident to provide for the retirement through old age, to provide against loss of support by death of another person or to meet exceptional expenditure connected with birth, death, or marriage. The purpose of social security is to provide an income up to a minimum and also medical treatment to bring the interruption of earnings to an end as soon as possible.
Where is it written in the “Payment of Gratuity Act” that organisations having less than 10 employees are “barred” from paying Gratuity? In fact, the question itself says intermediate activities are separated out purposely to avoid “Payment of Gratuity”. Now, should this question be admitted into the forum?
I have reservations about it.

From India, Pune

Dear Soumitra,
The basic concept /idea/query in this post by the querist is a solution to the diversionary and splitting tactics taken up by the owner of the company.
The owner is allegedly having several companies and keeps transferring employees to avoid payment of gratuity.
It is well known a company can pay gratuity to an employee even if he has one employee, but here he has more than legally stipulated minimum of 10 employes but he plays around the figure by transfer of employees.
He is seeking a legal solution to the issue of employer playing around taking advantage of employee desperately needing the job.
As such HR is tasked with ensuring that social security schemes like Maternity act-Gratuity -is turned into reality on ground.
So the question is very much admissible to my mind.

From India, Pune

If you are knowledgeable about any fact, resource or experience related to this topic - please add your views using the reply box below. For articles and copyrighted material please only cite the original source link. Each contribution will make this page a resource useful for everyone.

Please Login To Add Reply →

About Us Advertise Contact Us Testimonials
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2021 CiteHR.Com™

All Material Copyright And Trademarks Posted Held By Respective Owners.
Panel Selection For Threads Are Automated - Members Notified Via CiteMailer Server