Divyang5885
Is there any rule if an employee works a total of 3 years and he is demanding gratuity and is told that in his CTC letter company shows gratuity.

Is it any rule for that company has to pay gratuity for 3 yrs?

From Nigeria, Sango
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Umakanthan53
Labour Law & Hr Consultant
Divyang5885
Administrator

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umakanthan53
5880

Dear Divya,

In India, gratuity is a statutory terminal benefit of employment solely payable by the employer without any monetary contribution from the employee once the Payment of Gratuity Act, 1972 becomes applicable to the employer's establishment. Thus, the PGA,1972 is the complete Code in itself in respect of all matters pertaining to Gratuity.

On the other hand CTC is an accounting aide projecting the overall annual cost incurred by the employer in respect of each employee. Therefore, CTC , per se, cannot be considered as forming part of the contract of employment. The contents of the CTC can help the employer to have an upper hand of bargaining in salary negotiation. Hence mere mention of the annual contribution to any Gratuity fund by the employer cannot entitle an employee to stake a claim for gratuity when he has not rendered the minimum qualifying service stipulated under the PGA,1972.

From India, Salem

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