Dear Sirs,
Good Morning to All.
Sub: Seek clarifications on applicability of Gratuity for Contract Employee at the time of retirement.
We give below the case:
1. Name of the Company: ABC & Co
2. Name of the Contract employee: Mr. Raja
3. Name of the contractors: (1) M/s. SUN (2) M/s. Moon and (3) Star.
ABC & Co is having 3 contractors for the supply of Manpower. The Principal Employer is the same.
1. Mr. Raja worked in SUN Contract for 18 Years. He has been transferred to Moon contract by the Management. Sun Contract settled his Gratuity (As reimbursement of expenses claimed with Management and settled).
2. After 3 Years of Service, Mr. Raja has been transferred to Star Contract by the Management.
3. He worked in Star Contract for 4 Years and attained 58 years. Now Star contract issued a retirement order.
But Mr. Raja has not been paid Gratuity for 7 Years (3 Years in Moon contract and 4 Years in Star Contract).
Mr. Raja worked in the same company with 3 different contractors. M/s. SUN contract settled Gratuity (Reimbursement of expenses). Now Mr. Raja is requesting Gratuity. Transfer from one contract to another contract is done by Management only. Now three contractors also supply Manpower to the Company.
Please advise on how to settle this issue.
Regards, Ganapathy V
From India
Acknowledge(0)
Amend(0)
1Good Morning to All.
Sub: Seek clarifications on applicability of Gratuity for Contract Employee at the time of retirement.
We give below the case:
1. Name of the Company: ABC & Co
2. Name of the Contract employee: Mr. Raja
3. Name of the contractors: (1) M/s. SUN (2) M/s. Moon and (3) Star.
ABC & Co is having 3 contractors for the supply of Manpower. The Principal Employer is the same.
1. Mr. Raja worked in SUN Contract for 18 Years. He has been transferred to Moon contract by the Management. Sun Contract settled his Gratuity (As reimbursement of expenses claimed with Management and settled).
2. After 3 Years of Service, Mr. Raja has been transferred to Star Contract by the Management.
3. He worked in Star Contract for 4 Years and attained 58 years. Now Star contract issued a retirement order.
But Mr. Raja has not been paid Gratuity for 7 Years (3 Years in Moon contract and 4 Years in Star Contract).
Mr. Raja worked in the same company with 3 different contractors. M/s. SUN contract settled Gratuity (Reimbursement of expenses). Now Mr. Raja is requesting Gratuity. Transfer from one contract to another contract is done by Management only. Now three contractors also supply Manpower to the Company.
Please advise on how to settle this issue.
Regards, Ganapathy V
From India
Acknowledge(0)Amend(0)
This is a classic case of exploitation of contractual employees - the weaker section of society. In similar cases earlier, I have shared my views. In this type of case, we should not rigidly consider the legal point. Even in this case, the employer had made the decision to transfer the contractual worker from one contractor to another. Actually, the majority of these types of cases happen due to the employer's decisions.
In my opinion, the contract worker should receive gratuity based on the last drawn Basic & DA for a total of 18+7 = 25 years. Since gratuity was settled with the first contractor after 18 years, the contractual worker was still deprived as the Basic & DA were lower at that time. If the contractual worker had voluntarily changed the contractor, then there might not be any issue.
I have an MNC client who has considered the entire service period under different contractors but within one Parent Entity (MNC) for contractual workers, paying gratuity based on the last drawn Basic & DA for the entire service period.
We, as HR professionals, should not seek out bypass routes for the exploitation of contractual workers.
I strongly feel that if such cases are taken to court, the court will likely rule in favor of the contractual employee.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To Strive towards excellence with effort and integrity
From India, New Delhi
Acknowledge(0)Amend(0)
In my opinion, the contract worker should receive gratuity based on the last drawn Basic & DA for a total of 18+7 = 25 years. Since gratuity was settled with the first contractor after 18 years, the contractual worker was still deprived as the Basic & DA were lower at that time. If the contractual worker had voluntarily changed the contractor, then there might not be any issue.
I have an MNC client who has considered the entire service period under different contractors but within one Parent Entity (MNC) for contractual workers, paying gratuity based on the last drawn Basic & DA for the entire service period.
We, as HR professionals, should not seek out bypass routes for the exploitation of contractual workers.
I strongly feel that if such cases are taken to court, the court will likely rule in favor of the contractual employee.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To Strive towards excellence with effort and integrity
From India, New Delhi
Acknowledge(0)Amend(0)Gathering data for an AI comment.... Sending emails to relevant members...
Join Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
SBT Vs Asst. Labour Commissioner- Gratuity dismissed employee-LTS.PD F
FORM I(Application for Gratuity by an employee).doc