richa kumari1107

Can We Hold The Gratuity Amount Of An Employee Who Had Completed 5 Years Of Tenure As Well As Has Been Terminated After 2 Days Of His Completion Of 5 Years Tenure? Management Has Taken Decision Not To Pay Him The Gratuity Amount. Is It Fair Enough?
Please note required details:-
D.O.J-19th July 2013
Date of termination-20th July 2018
Total tenure period- 5 years
Reason for termination- performance not up to the mark
Designation- AVP-B.D
Management has decided not to pay gratuity amount to this employee during his full and final settlement. Is it fair?

From India, Delhi
Industrial Relations
Rahul Chhabra
Hr Professional
Deputy Commissioner Of Labour..a.p.
Richa Kumari1107
Senior Executive-hr
Insolvency N Gst Professional
Korgaonkar K A
Compliance Manager
Consultant Hr / Legal Services


4.Payment of gratuity.-
(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.

From India, Pune
Babu Alexander

Management con not withhold the Gratuity payable under Payment Of Gratuity Act, after put in 5 years of continuous service, on the ground that his service was terminated as his performance was not up to the mark. The decision of the Management is not maintainable / sustainable under the Law.
From India, Madras

Kindly approach the Labour Inspector / Labour Commissioner Office available in the district where you were working. Take the proof employment with date of Joining and leaving and your latest salary slip. They will guide / help you how to apply and get the Gratuity.
From India, Kumbakonam
korgaonkar k a

Dear Bhaskar ji (Boss2966),
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.

From India, Mumbai

Thank you Keshav Saheb
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.

From India, Kumbakonam
Rahul Chhabra

Dear Richa,
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 :)
Rahul Chhabra

From India, Delhi

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

From India, Hyderabad
richa kumari1107

Dear All,
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?

From India, Delhi

Dear Richa,
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.

From India, Mumbai

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