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 contractor: (1) M/s. SUN (2) M/s.Moon and (3) Star.

ABC & Co is having 3 contractors for supply of Manpower.
The Principal Employer is 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 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 same company with 3 different contractors. M/s.SUN contract settled Gratuity. (Reimbursement of expenses)
Now Mr.Raja is requesting for Gratuity. Transfer from One contract to another contract is done by Management only.
Now three contractors also supplying Manpower to the Company.
Please advise how to settle this issue.
Ganapathy V

From India
Ceo-usd Hr Solutions


This is classic case of exploitation of contractual employee - weaker section of the society. In similar cases earlier also I have commented my view. In this type of case we should not consider law point rigidly. Even in this case the employer had been taken decision to transfer the contractual worker from one contractor to another contractor. Actually, majorityAs the these type of cases are happening by the decision of the Employer.

To my opinion the contract worker should get gratuity on the basis of last drawn Basic & DA for total 18+7 = 25 years. As the gratuity had been settled with 1st contractor after 18 years, there also the contractual worker was deprived as the Basic & DA was less at that time. If it had been otherwise that the contractual worker of his own changed the contractor, then there may not be any question.

I have one MNC client who have considered the entire period of service under different contractors but under one PE ( MNC) for contractual workers and paid gratuity based on last drawn Basic & DA for entire period of service.

We HR professionals should not try to find out bypass route for exploitation of Contractual workers.

Even my gut feel if these type cases are referred to court, possibly the court will also verdict in favour of the contractual employee.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

If You Are Knowledgeable About Any Fact, Resource or Experience Related to This Topic and Want to Be Part of Such Discussions in Future - Please Register and Log In to Cite Community.

About Us Advertise Contact Us Testimonials
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2023 CiteHRŽ

All Material Copyright And Trademarks Posted Held By Respective Owners.
Panel Selection For Threads Are Automated - Members Notified Via CiteMailer Server