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I was serving one of the organisation for more than 5 years 6 months on outsource basis. During my tenure, company has changed three different outsource agency because of their own issues. But i have served the company without any single day break.
Now Company has rejected my gratuity application by saying that i have been on the payroll of the three different outsource agencies.
And my point was it was done by company not me, why should i penalized for that reason. What should i do in this?

From India, Ahmedabad
The situation where contractor in changing but contract labour remain same may be
viewed against the principal employer as it reflects against the spirit of the act unless the
shift of labour from one contractor to other is properly documented. This may lead to
declaration of sham contract. Supreme Court in R.K. Panda case (1994 LLR 634) has held
that workers working under different contractor for last 10 years will be absorbed by the
principal employer.
Based on the above, since you said you attended the work without any single day break, you are eligible for Gratuity, the Principle Employer is responsible for you Gratuity. You file an application before the Controlling authority under Payment of Gratuity Act.

From India, Madras
Dear Friend,
On ground of your service tenure(5.6 years) makes entitiled to receive for Gratuity from your employer.
You have worked under different contractors(out sourced agencies) during these 5.6 years. In simple understanding, your tenure of service under any contractor (out sourced agencies)is not 5 years.
Hence, you are not entitiled for any gratuity.
You need to know the agencies under whom you were working, whether have obtained any licence under CL(R&A) Act or not to decide the fate. The principal employer only would come to light if the agencies under whom you were working have not obtained licence under CL(R&A) Act.
In the instant case you need to file claim before the labour authority to decide, as it is a complexed nature of complaint.
Whether the contract of out sourced agencies are sham or camouflage has to be decided by the court.

From India, Mumbai
In the case of Madras Fertilizers Limited vs. Controlling Authority under Payment of Gratuity Act and Others (2003 LLR 244) held that 'gratuity' payable under the Payment of Gratuity Act, 1972, were wages for the purposes of the CLRA. Consequently, by virtue of section 21 (4) of the CLRA, the onus of payment of gratuity would lie on the principal employer in the event of a contractor’s failure to pay.
Based on the above principle I feel his claim would the admitted!

From India, Madras
Dear Mr. Babu Alexander,
We need to understand two things i.e. what law and act speaks.
Over the period various jugements have been passed by different High Courts and Supreme Court but nothing has become a law or ammended in to act till now.
1. The workmen of a contractor can not be treated as workmen of Principal Employer, if the contractor is held a licence under CL(R&A)Act.
2. If the contract worker can not treat as an employee of PE, how come PE is liable to pay gratuity?
We need to go by the case of M/s Cummins(I) Ltd vs Industrial Cleaning Services & others 2017 is attached for reference, where HC Madras has dscussed & other cases

From India, Mumbai

Attached Files
File Type: pdf Cummins_(I)_Ltd_vs_Industrial_Cleaning_Services.pdf (245.0 KB, 42 views)

Dear All,
The Employee concerned has to submit his Gratuity Claim to his immediate Employer & Principal Employer.If the claim is rejected, he has to approach the Controlling Authority for adjudication.The controlling Authority will decide the matter based on records

From India, New Delhi
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