Umakanthan53
Labour Law & Hr Consultant
Manojkamble
Sr. Hr Executive
+2 Others

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One of my cousins is facing a problem, he left a company in 2015 and had completed a tenure of 5 years and 3 months when he left in 2015, but he was never paid gratuity by his company, he has written to the hr this month, but sadly they have refused to pay saying he has bought this matter to light after 3 years of leaving the company.
My Question is
1) Is there any such rule which says gratuity will not be paid even if the staff forgot to approach the company immediately after leaving or contacted the company after 2-3 years.
2) Is there something legally which can be done to get his gratuity payment.
Thanking in advance.
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Dear Anish,
This is employers duty to pay the gratuity on separation. You need to inform them you will approach labour office for resolving of this matter and if still the does not support you then you can simply approach labour office and file an complaint with them.
Dear Anish,
Gratuity under the Payment of Gratuity Act,1972, being a one-time lump sum terminal benefit should be paid by the employer within 30 days from the date of termination of employment. Though there are certain procedural modalities prescribed under the Act as well as the Rules applicable to the establishment, any claim for gratuity by the employee can not be rejected on the ground of delay by the employer or the Controlling Authority empowered to dispose of such claim. Let me try to briefly explain the entire procedure. Section 7 of the Payment of Gratuity Act,1972 which deals with determination of the amount of gratuity, enjoins upon the employee and the employer certain rights and duties respectively. They are as follows:
1) Formal claim by the employee to the employer:
The employee/ nominee in case of a deceased employee should apply for gratuity in the the form mentioned in the Central/State Rules to the employer within 30 days from the date gratuity becomes payable.
2) Notice of the amount of gratuity determined by the employer:
Whether such an application for gratuity is made by the employee or his nominee or not, the employer has to determine the amount of gratuity as soon as it becomes payable and send a notice to the employee or his nominee as the case be and the Controlling Authority under the Act.
3) Time limit for payment of gratuity:
It is the responsibility of the employer to pay the gratuity as determined by him within 30 days from the date it becomes payable. Even after this, the employee fails to receive the gratuity without any reason or due to the reason of any dispute, the employer should forth with deposit the amount with the Controlling Authority. Similarly, no claim of gratuity should be rejected by the employer on account of any delay in submission of the application by the employee mentioned in point(1). Otherwise he would be liable to pay interest later @ 8% simple interest from the date gratuity became payable.
4) Application to the Authority:
Within 90 days from the date of receipt of the application by the employer referred to in (1) or fails to pay gratuity or disputes the amount of gratuity, the employee has to make a claim before the Controlling Authority. In case of delay,if any, it shall be explained to the satisfaction of the Authority by means of a delay condonation petition attached to the claim.
For complete details, you may refer to the relevant Rules.
Thanks a lot Umakanthan sir and Manoj
Hi
The Payment of Gratuity Act is a beneficial labour law in India. The Gratuity Act in India came into effect in order to provide social benefits to employees after completion of 5 years of service. Therefore, the law restricts impounding of Gratuity. Gratuity, under Gratuity law in India, cannot be attached. Now, the question whether Gratuity can be paid at his sweet will by the employer is addressed below –
Section 7(3) casts a duty on employers to determine the amount of Gratuity and give a notice in writing to the person to whom Gratuity is payable and also to the Controlling Authority specifying the amount of Gratuity so determined. Section 7(3) provides for payment of Gratuity within 30 days from the date on which it becomes payable to the concerned person. Section 7(3A) provides for interest if Gratuity is not paid as provided in sub section 3 of Section 7.
The Hon’ble Supreme Court in the matter of State of Kerala V/s Padmanabhan Iyer, 1985 has held that delayed payment of Gratuity must be visited with the penalty of interest as the current market rate till actual payment.
The provision in Section 7(1) cannot be construed as a leverage to deny Gratuity to the employee on the specious plea that the person has not applied for Gratuity as provided under Section 7(1) in Form I.
The relevant legal provisions are stated herein below –
Section 7 (1) of the Gratuity Act states that an employee who is eligible for payment of gratuity under the Act, shall apply in writing to the employer for payment of such Gratuity amount.
Rule 7(1) of the Payment of Gratuity Rules, 1972 states that the above application shall be made ordinarily within 30 days from the date the gratuity became payable, in Form ‘I’ to the employer.
Further, Section 7(2) of the Act of 1972 states that the employer, whether or not the above application has been made, must determine the amount of Gratuity payable and give a notice in writing to the concerned employee and Controlling Authority informing them about such amount.
Rule 8 of the Payment of Gratuity Rules, 1972, states that within 15 days of receipt of application under Rule 7, the employer must give a notice under ‘Form L’ if the claim is found admissible. If the claim for Gratuity is not found admissible, the employer shall issue a notice under ‘Form M’ to the employee specifying the reasons why the claim for Gratuity is considered not admissible.
Section 7(3) of the Act of 1972 states that the employer shall pay the amount of Gratuity so determined, within 30 days from the date it becomes payable to the concerned employee.
Rule 10 of the Payment of Gratuity Rules, 1972 provides that a claimant employee may apply to the controlling authority in writing in ‘Form N’, if the employer either refuses to accept a nomination to entertain an application under Rule 7(1), or having received an application under Rule 7 fails to issue any notice as required under Rule 8. The Controlling Authority may accept any application after the expiry of the specified period for submission of such application, if sufficient cause is shown by the applicant.
It may also be noted that the Limitation Act does not apply to the payment of Gratuity
Regards
P.S.Lakshmanan
S. G. Management Services
(PAN INDIA Consultant – Labour Law Compliance,
PF, ESI, P Tax, Benefit Management &
POSH COMPLIANCE) - KOLKATA
Dear Friend,
Your collegue has to make an application for claim of gratuity and send it to his employer in registered post. You have to wait further more 30days of your application. If your is a fit case no one can prevent you from getting it from your employer. Then you need to file a claim petition before the labour department where your employer is registered, if your employer makes no payment.
To comfort you some text is inserted below to know about:
The Gratuity Act in India came into effect in order to provide social benefits to employees after completion of 5 years of service. Therefore, the law restricts impounding of Gratuity. Gratuity, under Gratuity law in India, cannot be attached.
Now, the question whether Gratuity can be paid at his sweet will by the employer is addressed below –
Section 7(3) casts a duty on employers to determine the amount of Gratuity and give a notice in writing to the person to whom Gratuity is payable and also to the Controlling Authority specifying the amount of Gratuity so determined. Section 7(3) provides for payment of Gratuity within 30 days from the date on which it becomes payable to the concerned person. Section 7(3A) provides for interest if Gratuity is not paid as provided in sub section 3 of Section 7.
The Hon’ble Supreme Court in the matter of State of Kerala V/s Padmanabhan Iyer, 1985 has held that delayed payment of Gratuity must be visited with the penalty of interest as the current market rate till actual payment.
The provision in Section 7(1) cannot be construed as a leverage to deny Gratuity to the employee on the specious plea that the person has not applied for Gratuity as provided under Section 7(1) in Form I.
The relevant legal provisions are stated herein below:-
Section 7 (1) of the Gratuity Act states that an employee who is eligible for payment of gratuity under the Act, shall apply in writing to the employer for payment of such Gratuity amount. Rule 7(1) of the Payment of Gratuity Rules, 1972 states that the above application shall be made ordinarily within 30 days from the date the gratuity became payable, in Form ‘I’ to the employer.
Further, Section 7(2) of the Act of 1972 states that the employer, whether or not the above application has been made, must determine the amount of Gratuity payable and give a notice in writing to the concerned employee and Controlling Authority informing them about such amount.
Rule 8 of the Payment of Gratuity Rules, 1972, states that within 15 days of receipt of application under Rule 7, the employer must give a notice under ‘Form L’ if the claim is found admissible. If the claim for Gratuity is not found admissible, the employer shall issue a notice under ‘Form M’ to the employee specifying the reasons why the claim for Gratuity is considered not admissible.
Section 7(3) of the Act of 1972 states that the employer shall pay the amount of Gratuity so determined, within 30 days from the date it becomes payable to the concerned employee.
Rule 10 of the Payment of Gratuity Rules, 1972 provides that a claimant employee may apply to the controlling authority in writing in ‘Form N’, if the employer either refuses to accept a nomination to entertain an application under Rule 7(1), or having received an application under Rule 7 fails to issue any notice as required under Rule 8. The Controlling Authority may accept any application after the expiry of the specified period for submission of such application, if sufficient cause is shown by the applicant.
The right being statutory, can not be equated to a debt, and principle of Limitation Act are not applicable. [ the Kerala High Court; Neelakandan Nambodri vs Stae of Kerala]
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