To, The committee members,
In our company, we have taken full-time Consultant, who has completed 9 yrs in our service. But now he wants to stop the consultancy. We used to pay consultancy charges Rs 30000/-p.m. No official designation was given to him nor any agreement. As he is related with the owner. Can he be Legally entitled to gratuity?
Jayant

From India, Pune
Dear Nisal,

Generally, consultants are engaged on retainer basis and the payment may be monthly, quarterly, half yearly or annually as agreed in the contract for service. You would have deducted TDS for such payment. In that case, he is not entitled to statutory gratuity in the event of termination of the contract.

On the contrary, had you employed him under a contract of service and the monthly payment is shown as salary, he would be an employee of the organization and entitled to gratuity despite of his close family relationship with the owner of the organization.

From India, Salem

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