Industrial Relations And Labour Laws
PRABHAT RANJAN MOHANTY
Hr & Ir
Sr. Manager (p&a)
Dy Manager Hr
From India, Madras
1. The services of the employee has to be terminated, so it cannot be retirement or resignation
2. Termination of service has to be for omission or negligence resulting in damage or loss to or destruction of property belonging to the employer. For a valid termination on these allegations it is necessary to hold inquiry in which these charges are proved. Better to do it in the inquiry itself
3. The extent of damage or loss caused has to be proved by adducing positive evidence.
4. After termination of service, employee has to be issued a show cause notice seeking his explanation as to why the loss of the company shall not be recovered from the gratuity.
5. Based on the explanation of the delinquent employee a reasoned order considering the explanation of the employee has to be issued.
Subject to the above procedure, gratuity can be recovered to the extent of loss. The relevant provision of law is given below:
4(6) (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;
From India, Mumbai
At this junture you can not hold the gratuity of the workman, whatever the reason may be. The opinion provided by of Mr. KK & Mr Alexander is valid as per the set rules for payment of gratuity. Any contravention in payment may prosecute you for the willful violation.
From India, Mumbai
A reading of the verdict of the Apex Court in D V Kapoor Vs Union of India (AIR 1923, 1990), will lead you to a conclusion that you cannot forfeit or withhold the gratuity of an employee who has retired or left the service. You could have found out the misconduct before he is relieved and you could have conducted an enquiry in to the incident. Moreoer, in order to forfiet the gratuity the misconduct should be such which are very serious and should have caused material loss to the company.
In Dhanalakshmi Bank Vs V Ramachandran(2012-IV/LLJ235(Kar) the employee dismissed for a misconduct involving moral turpitude was allowed gratuity just because the order dismissing him from service did not speak anything about forfeiture of gratuity! In Dena Bank V. Manjulaben M. Thakor and another’ (2012 LLR 648) it was held that you have no right to forfeit gratuity unless you had not initiated any penal action with a view to forfeiting the gratuity amount.
In ‘State Bank of Travancore V. Assistant Labor Commissioner (Central) (2012-IV-LLJ-580 (Ker) the employee dismissed was allowed gratuity even at the higher rate as applicable to other employees as per their Long Term Settlement just because there was no speaking order disallowing gratuity at the time of dismissing the employee. See that is the power of section 4(6) of Payment of Gratuity Act. You cannot forfeit gratuity without giving the employee an opportunity of being heard and without giving notice of such forfeiture.
But, still I advise you that you can approach the Appropriate Authority, the Labour Officer, and explain the situation and deposit the amount of gratuity payable and then entrust the labour Officer to take a call on the issue.
From India, Kannur
I would like to inform you that please make habit of receiving NOC (Prepare a format as per the company's requirements) from respective head of department of every employees at the time of leaving of the company. Even this habit will help HR to loop in the loose everybody.
Even it is cumbersome to handle these kind of issues after the full & final settlement.
Apart from this I agreed all the replies as mentioned here above.
From India, Delhi
#AnonymousNo right to hold the gratuity payment, but you can ask the employee to pay the same as a warn. If he still ignores to pay you have to issues the gratuity payment and a recovery letter warning that if not received the amount within specific time we may have to terminate your services and that may reflect on BG checking.
If that is a huge amount and you want to get that back, you can offer him a job and recovery on his joining - only Idea.
From India, Hyderabad