Dear Seniors
I work in a Pvt ltd IT company with 80 employees. So far our company doesn't have gratuity as part of CTC but now my employer wants to deduct the same from employees salary even from previous months back dated from Apr, 2018.
I understand company who works on CTC concepts does include gratuity as part of their CTC to avoid liability.i want to ask few questions from legal perspective and if their is any sections which supports it:
1. Can an employer without any intimation or late intimation change salary break ups of employees to include gratuity any time.
2. Can an employer deduct previous month gratuity amount from our current month salary even when we have already received payslips for those months.
3. Employer is saying they have mentioned one clause in appointment letter - "Your CTC will be broken up in the following components (as per discussion) and the final breakup will be provided to you later.
1. Basic Salary
2. Conveyance Allowance
3. Medical Allowance
4. Medical Insurance Premium
5. House Rent Allowance (HRA)
6. TDS
7. Provident Fund and Gratuity " - So they can add gratuity to break up any time they want.
But the fact is they have not provided any breakuo to employees with Gratuity amount mentioning to it.
4. If we want to complain about employer in this regard. How and where we can do it. Can we file an anonymous complaint?
Urgent reply will really help.
Thanks
Shukvinder
From India, New Delhi
I work in a Pvt ltd IT company with 80 employees. So far our company doesn't have gratuity as part of CTC but now my employer wants to deduct the same from employees salary even from previous months back dated from Apr, 2018.
I understand company who works on CTC concepts does include gratuity as part of their CTC to avoid liability.i want to ask few questions from legal perspective and if their is any sections which supports it:
1. Can an employer without any intimation or late intimation change salary break ups of employees to include gratuity any time.
2. Can an employer deduct previous month gratuity amount from our current month salary even when we have already received payslips for those months.
3. Employer is saying they have mentioned one clause in appointment letter - "Your CTC will be broken up in the following components (as per discussion) and the final breakup will be provided to you later.
1. Basic Salary
2. Conveyance Allowance
3. Medical Allowance
4. Medical Insurance Premium
5. House Rent Allowance (HRA)
6. TDS
7. Provident Fund and Gratuity " - So they can add gratuity to break up any time they want.
But the fact is they have not provided any breakuo to employees with Gratuity amount mentioning to it.
4. If we want to complain about employer in this regard. How and where we can do it. Can we file an anonymous complaint?
Urgent reply will really help.
Thanks
Shukvinder
From India, New Delhi
Dear Shukvindar,
In the first place, I would request you to go through the various threads on the concept and relevance of CTC already available in this forum as well as in other Web sites.
What all the employment benefits mentioned in monetary terms in the CTC are only a mere projection of the overall cost per employee per annum. It includes certain social security benefits solely payable by the employer in respect of all the employees in the establishment on certain specific eventualities for which he is statutorily or at his own discretion required to make periodical provisions. One such fringe benefit of employment is gratuity payable on the termination of employment as per the provisions of the Payment of Gratuity Act, 1972 if it becomes once applicable to the establishment. It requires no contributions from the employee at any stage of his employment.
Therefore, the present move of your employer to deduct any sum from the employees towards any gratuity fund either prospectively or retrospectively is illegal.
If you are scared of any negative reactions from your employer, you can make an anonymous complaint to the State Labour Commissioner.
From India, Salem
6016In the first place, I would request you to go through the various threads on the concept and relevance of CTC already available in this forum as well as in other Web sites.
What all the employment benefits mentioned in monetary terms in the CTC are only a mere projection of the overall cost per employee per annum. It includes certain social security benefits solely payable by the employer in respect of all the employees in the establishment on certain specific eventualities for which he is statutorily or at his own discretion required to make periodical provisions. One such fringe benefit of employment is gratuity payable on the termination of employment as per the provisions of the Payment of Gratuity Act, 1972 if it becomes once applicable to the establishment. It requires no contributions from the employee at any stage of his employment.
Therefore, the present move of your employer to deduct any sum from the employees towards any gratuity fund either prospectively or retrospectively is illegal.
If you are scared of any negative reactions from your employer, you can make an anonymous complaint to the State Labour Commissioner.
From India, Salem
Hi
Strictly speaking CTC is a misnomer being used by some companies to entice the employees by showing the Cost To Company as being the salary package offered. It is not exactly what an employee gets even as a gross salary leave alone the net salary. It is more to do with the costs that a company incurs towards an employee in a year than the salary payable. Hence it includes even the contributions of the employer like PF, ESI and some even include Gratuity though strictly no contributions can ever be made payable by an employee towards it.
# 7 is disputable in the above case and you may politely take up the issue with the concerned manager and ask for explanation before you go for legal action.
While PF and ESI has part of contributions from the employee, Gratuity is not. It is payable by the employer, subject to conditions as laid down in the Payment of Gratuity Act.
Thanks and Regards
From India, Hyderabad
Strictly speaking CTC is a misnomer being used by some companies to entice the employees by showing the Cost To Company as being the salary package offered. It is not exactly what an employee gets even as a gross salary leave alone the net salary. It is more to do with the costs that a company incurs towards an employee in a year than the salary payable. Hence it includes even the contributions of the employer like PF, ESI and some even include Gratuity though strictly no contributions can ever be made payable by an employee towards it.
# 7 is disputable in the above case and you may politely take up the issue with the concerned manager and ask for explanation before you go for legal action.
While PF and ESI has part of contributions from the employee, Gratuity is not. It is payable by the employer, subject to conditions as laid down in the Payment of Gratuity Act.
Thanks and Regards
From India, Hyderabad
But they are saying they are not deducting it from salary but from CTC which is employee cost to them and they can deduct from this. I have refer various threads here found that while the practice of gratuity amount form CTC is unethical but cannot be challenged legally as its CTC and not salary.
1.But my main concern here is can they deduct the amount back dated? even when the previous month salary slips are already issued.
2. Can any company change CTC break up any time without prior intimation to employees.
3. Pls guide me through how we can highlight this anonymously to state labor commission
4. I am working as HR mgr here and I am continuously telling them its wrong and we shdnt do it at least back dated. Or best is to do it with appraisal cycle. but they are not listening to me and asked me act as mere coordinator. what shd I do and what will be my liabilities as HR if any dispute arises in future and how I can safeguard myself.
From India, New Delhi
1.But my main concern here is can they deduct the amount back dated? even when the previous month salary slips are already issued.
2. Can any company change CTC break up any time without prior intimation to employees.
3. Pls guide me through how we can highlight this anonymously to state labor commission
4. I am working as HR mgr here and I am continuously telling them its wrong and we shdnt do it at least back dated. Or best is to do it with appraisal cycle. but they are not listening to me and asked me act as mere coordinator. what shd I do and what will be my liabilities as HR if any dispute arises in future and how I can safeguard myself.
From India, New Delhi
Hi
If the employer is paying less than what was paid in the previous month and indicates that as contribution towards the Gratuity, it is illegal as contributions are to be from the employer only.
CTC cannot be changed in the middle of the employment and that to the detriment of an employee.
Even before you take the issue to the labour dept. it will be better if you form a delegation and talk to the employer before going public. Let your employer read the Payment of Gratuity Act in the first place before doing anything that may result in unnecessary issues to the whole company.
Try to do the talk across the table and keep the pressure including sending emails raising concern and how it will affect the company in the long run etc.
See that you have enough proof of raising concern and asking your management not to resort to any such action to safeguard your interests.
Thanks and Regards
From India, Hyderabad
If the employer is paying less than what was paid in the previous month and indicates that as contribution towards the Gratuity, it is illegal as contributions are to be from the employer only.
CTC cannot be changed in the middle of the employment and that to the detriment of an employee.
Even before you take the issue to the labour dept. it will be better if you form a delegation and talk to the employer before going public. Let your employer read the Payment of Gratuity Act in the first place before doing anything that may result in unnecessary issues to the whole company.
Try to do the talk across the table and keep the pressure including sending emails raising concern and how it will affect the company in the long run etc.
See that you have enough proof of raising concern and asking your management not to resort to any such action to safeguard your interests.
Thanks and Regards
From India, Hyderabad
Thanks AKS14.
Pls let me know if there is any legal provision that supports -'CTC cannot be changed in the middle of the employment and that to the detriment of an employee'.
As my employer doesnt understand terms like wrong/unethical. what he understand is illegal if its mentioned anywhere in law.
From India, New Delhi
Pls let me know if there is any legal provision that supports -'CTC cannot be changed in the middle of the employment and that to the detriment of an employee'.
As my employer doesnt understand terms like wrong/unethical. what he understand is illegal if its mentioned anywhere in law.
From India, New Delhi
Seniors - Pls help. I have read the payment of Gratuity Act and nowhere it talks abt CTC what it talks abt is salary. And company is taking this into its advantage.
From India, New Delhi
From India, New Delhi
Hi
Your cause of action will only arise once the employer deducts the salaries payable and for now it is an apprehension which will not automatically make it actionable. You may talk to the employers if there is any intimation received regarding the changes to be made to the CTC and that part of the amount will be taken as contribution towards Gratuity. Remember there is a difference to the salary payable and the CTC. It may technical in nature but the employer can still say that he had taken his [employer] contribution into CTC and made that as a package. I am just speculating at this juncture but you need to be prepared.
For now it is better you sit across with few more seniors with the management and check what exactly they have up their sleeves instead of confrontation.
Thanks and Regards
From India, Hyderabad
Your cause of action will only arise once the employer deducts the salaries payable and for now it is an apprehension which will not automatically make it actionable. You may talk to the employers if there is any intimation received regarding the changes to be made to the CTC and that part of the amount will be taken as contribution towards Gratuity. Remember there is a difference to the salary payable and the CTC. It may technical in nature but the employer can still say that he had taken his [employer] contribution into CTC and made that as a package. I am just speculating at this juncture but you need to be prepared.
For now it is better you sit across with few more seniors with the management and check what exactly they have up their sleeves instead of confrontation.
Thanks and Regards
From India, Hyderabad
Dear colleague,
1. Please clarify why the Gratuity Act got applied now as it is in existence since 1972 ? Was your establishment employing less than 10 employees till now?
2. There are no legality involved in considering Gratuity as part of CTC or excluding it. In fact it can be regarded fair if the employer reckons it as a cost to him and show as a part of CTC. But it is fair to apply to future employees and not existing.
3. But in this exercise, if the employer is effecting any reduction in the salaries of existing employees is unfair and unethical. Issue of legality has to be raised with labour authorities after exhausting internal avenues on the grounds that no benefits/ concessions once given cannot be withdrawn without complying with the provisions of Notice of change under the Industrial Disputes Act .
You may like to invoke this provision of Notice of Change at appropriate stage.
Regards,
Vinayak Nagarkar
HR- Consultant
From India, Mumbai
1. Please clarify why the Gratuity Act got applied now as it is in existence since 1972 ? Was your establishment employing less than 10 employees till now?
2. There are no legality involved in considering Gratuity as part of CTC or excluding it. In fact it can be regarded fair if the employer reckons it as a cost to him and show as a part of CTC. But it is fair to apply to future employees and not existing.
3. But in this exercise, if the employer is effecting any reduction in the salaries of existing employees is unfair and unethical. Issue of legality has to be raised with labour authorities after exhausting internal avenues on the grounds that no benefits/ concessions once given cannot be withdrawn without complying with the provisions of Notice of change under the Industrial Disputes Act .
You may like to invoke this provision of Notice of Change at appropriate stage.
Regards,
Vinayak Nagarkar
HR- Consultant
From India, Mumbai
Thanks for your replys so far.
Our Co have ard 80 employees & its ard 8 yrs old. They recently paid gratuity to first employee and many more are going to complete 5 yrs this year end and thats why they are now all of a sudden trying to impose liability on employees.
My main concern is also the same..reduction in existing payouts as this will impact employees existing take home salary. I am suggesting them to introduce it for new employees now and for existing employees , it will be better to introduce it at the time of appraisal with new CTC and new breaks up. But they are not ready to wait till that time.
From India, New Delhi
Our Co have ard 80 employees & its ard 8 yrs old. They recently paid gratuity to first employee and many more are going to complete 5 yrs this year end and thats why they are now all of a sudden trying to impose liability on employees.
My main concern is also the same..reduction in existing payouts as this will impact employees existing take home salary. I am suggesting them to introduce it for new employees now and for existing employees , it will be better to introduce it at the time of appraisal with new CTC and new breaks up. But they are not ready to wait till that time.
From India, New Delhi
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