mahesh-menon1
I have two situations here:

1) An employee working in an organization on contract resigns( without completing 5 years) and gets selected in regular employment in the same organization and joins immediately within two days of relieving, whether we need to pay the gratuity for the contract period or shall we consider it at the time of resignation from regular/permanent service
2) An employee working in an organization on contract resigns( after completing 5 years) and gets selected in regular employment in the same organization and joins immediately within two days of relieving, whether we need to pay the gratuity for the contract period or shall we consider it at the time of resignation from regular/permanent service

From India, Ahmedabad
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Saswatabanerjee
Partner - Risk Management
Sitaramsn
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Babu Alexander
293

If there a nexus could be proved,

between the period of employment as a contractor’s workmen / contract workmen,
and taken in the organization on the same job roll and profile,

and when no appointment order is issued, and when taken on permanent / organization rolls,

and especially, when the employee is some having documentary evidence, to prove, his continuity of employment in the organization rolls,

then the organization cannot escape the liability of Payment of Bonus for the employee concerned, and is payable when on retirement, after he completes five continuous employment, or more in the organization, including the years he was on contract (‘s) roll.

From India, Madras
mahesh-menon1
Thanks @ Babu Alexander,

Herein the employees are given appointment letter for both contractual employment and regular service.

And in some cases ,we have settled the gratuity also, of contractual employees ,who have rendered qualifying service.

I wanted to know the rule position as to:

1) Whether, we should recover the paid amount and pay the gratuity on total service at the time of retirement
2) Whether, we should and pay the gratuity from the date of new employment as old service has been settled.

From India, Ahmedabad
sitaramsn
26

I suggest, once it is settled better not to disturb the situation. Since the past service is closed as contract employee whether employed by you or through contractor.
Reckon the service from the on roll employment and hope this will satisfy legal grounds too as earlier contract service is settled.

From India, Hyderabad
saswatabanerjee
2329

The answer will depend on a lot of things, which includes what you wrote on the appointment letter when he was a contract employee, whether he was employed directly or through a contractor, what work he was doing, terms of the contract and control exercised by the company on the contract employee.

Depending on that, the authorities and the courts will decide whether the contract was a sham, an employment disguised as contract. If that is the case, then you will be liable for gratuity for the entire period.

From India, Mumbai

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