PRABHAT RANJAN MOHANTY
Hr & Ir
Deputy Commissioner Of Labour..a.p.
Agm - Hr
Sr. Manager Hrd
Insolvency N Gst Professional
Korgaonkar K A
Consultant Hr / Legal Services
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,
(6) Notwithstanding anything contained in sub-section (1),-
(a) the gratuity of an employee, whose services have been terminated for any act, willful 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;
(b) the gratuity payable to an employee shall be wholly forfeited,-
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
Comment: "The right to gratuity is also a statutory right. The appellant was not charged with nor was given an opportunity that his gratuity would be withheld as a @page-SC1927 measure of punishment. No provision of law has been brought to our notice under which, the. President is empowered to withhold gratuity as well, after his retirement as a measure of punishment. Therefore, the order to withhold the gratuity as a measure of penalty is obviously illegal and is devoid of jurisdiction.": D.V. Kapoor v. Union of India AIR 1990 SUPREME COURT 1923
This is the extract of the Bare Act.
Company cannot deny gratuity to him.
Greetings. I'm getting an opportunity to interact with you after long time, sir.
The query is raised by and on behalf of management and not by employee. Your advised is good for employee.
It seems you made a mistake while responding to the query.
I have drawn your attention only with the intention to correct yourself.
I was thinking that the query was raised by an employee.
It is the basic responsibility of the HR available in the organization to guide the management about the statutory compliance. Even the employee terminated on disciplinary ground or unsatisfactory performance, the Gratuity must be paid.
The query has been answered very well by Shri Nathrao Ji.
Ask your management to go through "The Payment of Gratuity Act 1972" especially Section 4; and pay the gratuity payable. This will help you save some litigation cost :)
It is ill-advised decision of the management and there seems to be more than that meets the eye in stopping the gratuity of the employee who has put in 5 years in the employment. They cannot fight the case[if it goes to such an extent] and it might only spoil the goodwill of the company if it is dragged to the labour court.
As already put out by one of our esteemed members by way of Bare Act, it is pretty clear and straight forward case of not heeding to the rules if the management continues to stick to their illogical conclusion.
Thanks and Regards
I appreciate all the answers mentioned in response to my query. I will be obliged if consider one more similar case. The only change is that the employee had been terminated because of his wrongdoing. The employee has already completed 5 years with company and was terminated very next day. He shared the company's confidential data with the competitor company as well as he transferred the sales/client confidential data to his personal mail id against the company policy.
So, in this case, can the management hold the gratuity of that employee?
All the employees of your establishment are facing termination by mangement on very next day of 5 years of service tenure! It gives wrong understanding or may be coincidence.
In my opinion they sholud not be paid single penny, provided they are proved guilty for misconduct as per your company standing order and terminated after due trials as per the norms of ID Act.
The senior and learned members have given very accurate opinion for the matter.