I think the organization would have already been registered under the Foreign Contribution ( Regulation) Act,1976. At that time it would have been mentioned about the constitution of the organization such as whether a Trust registered under the Societies Registration Act or a Company incorporated under the Companies Act.
1) Anyway, the application of the Payment of Gratuity Act,1972 comes into play only when the no of employees in such an establishment reaches 10 or above not withstanding any reduction in the number later.
2) Every employee in such an establishment to which the PG Act,1972 applies would be eligible to claim gratuity under the Act only upon his termination of employment due to retirement, resignation, discharge, dismissal, retrenchment or his death or disablement due to accident or disease provided he has rendered not less than five years of continuous service in the establishment. However, termination of employment due to death or disablement does not require the above minimum service.
3) Gratuity for such eligible employee has to be calculated as follows:
Gratuity = Last drawn monthly wages [ only the sum of basic and D.A]/26 X 15 X the no of years of
4) While computing the total no of years of continuous service, service exceeding 6 months has to be treated as one year.
5) The amount of gratuity thus calculated under the Act should be limited to the ceiling of Rs.20 lakh.
6) The amount of gratuity payable under the Act shall be paid to the employee or his nominees in case of his death within 30 days it became payable failing which simple interest would be levied @ 10% p.a.for the period of default.
7) In case of any dispute as to the amount of gratuity payable etc., the employer shall deposit the amount of gratuity as per his calculation with the Controlling Authority under the Act.
If you are closing down your projects and retrenching the employees, follow the above steps in respect of eligible employees for gratuity if the PG Act,1972 applies to your organization.
18th February 2019 From India, Salem
Thank you so much for your quick and friendly anwser to my question - I do appreciate it very much! However, I do have to add an additional question. There are only 9 employees - therefore the Payment of Gratuity Act, 1972 does not come into play. What are the rules/laws in such a case? May I kindly ask you again?
Thanky you very much and have a nice day!
18th February 2019 From Switzerland, Horgen
Even if the number of employees is only 9 as of now, had it been 10 or more some time in the past, you are bound to pay gratuity to these employees affected by the closure of the establishment.
That apart, as per section 25 -F of the Industrial Disputes Act,1947, you have to pay them one month's notice or salary in lieu of notice AND pay them retrenchment compensation @ 15 days average wages last drawn for every completed year of service rendered by them.
If willing and financially capable, as a gesture of good will and in humanitarian consideration, the management can pay gratuity also despite the non-application of the PG Act,1972 to the establishment.
18th February 2019 From India, Salem
No gratuity or claim for same is out of question "if one is doing voluntary work" as per your version.
Besides, Mr Umakanthnji had given complete details who are eligible for gratuity and conditions of payment of gratuity at the cesation of employment.
19th February 2019 From India, Mumbai
May I again kindly ask you for your advice? In your last answer to my question you mentioned “retrenchment compensation”. I have done some research on the “Industrial Disputes Act” that – as I understand – sets the rules for these compensations. However, there are several things I do not understand about this act:
1. There are five part time teachers working for the organization – are teachers considered as “workmen” and therefore have a right to get retrenchment compensation?
2. What about a librarian?
3. Three employees work intermittently and not continuously and much less that 240 days in the previous 12 months – what are the rules in this case?
We certainly don’t want to be stingy. We always paid fair wages to our Indian employees with a yearly increase much more than the minimum. In addition, the employees received extra money for special expenses they could not afford. But fact is that our fundraising broke down drastically in the last two years because we were left in insecurity about FCRA. Insecurity is poison if you want to raise money and try to motivate people to donate for humanitarian projects. Nobody wants to give money to an organization that may not be able to transfer the money to the project he or she wants to support. So we are financially in a difficult situation. At least we could pay the wages so far. But now we have to close the projects because we did not get FCRA. Unfortunately we do not know why. It’s frustrating, upsetting, and sad, and our Indian employees will lose their jobs. We would love to pay them generous benefits, but we simply can’t. We can only pay compensation to those who are covered under the act. I therefore would very much appreciate your advice so that we could at least be fair according to the Indian law.
Thank you very much for your help! Kind regards,
20th February 2019 From Switzerland, Horgen
1) A teacher is not a "workman" under the ID Act,1947; hence a teacher has no right to retrenchment compensation under the ID Act,1947.
2) A librarian of a library attached to any academic institution is a teacher.
3) To be eligible to claim retrenchment compensation, one should have been employed as a workman and should have rendered not less than one year of continuous service under the same employer.
To be entitled to retrenchment compensation under the Act, one should have worked for not less than 240 days in every completed year of service notwithstanding the interruptions mentioned as non-interruptions u/s 25-B.
Though a teacher is not a workman under the ID Act,1947, he is an "employee" u/s 2(e) of the PG Act,1972.
26th March 2019 From India, Salem