Navigating Gratuity and Leave Policies: How Do Overseas Assignments Affect Entitlements?

Dear All,

I have a few queries:

1. If an employee has served an organization for 3 years in India and after that, he is sent abroad for an assignment to the sister firm in the US and works there for 2 years, would he be entitled to Gratuity under the provisions of the act?

2. If a person is headquartered at Place A and is sent on deputation to Place B for a period of, say, 6 months, how would the leaves be calculated? Would that employee be covered under Place A's leave norms or Place B's leave norms for that 6-month period?

Regards,
Govil Nanda

Hi Govil,

Legally, it is not mandated to give Gratuity for your first example because the employee has to leave the services with one entity and then be sent to the subsidiary company abroad. If it is a deputation, it is eligible. In this case, the employee is not eligible for gratuity. However, it depends on the Company's Policy - whether the length of service is to be considered for the employees of subsidiary companies or associate companies in case of internal changes.

Normally, any employee is governed by the Leave Rules & Regulations of the Unit where he/she is posted. In your case, the employee is governed by the rules at place B until such time he/she is re-transferred to Place-A.

Hope this clarifies for you.

Suresh

Hi Govil,

The answer to your query is as follows: If the person was abroad and the monthly salary was being credited to his account by the Indian entity, then the experience is accounted for by the Indian firm, and hence the employee is eligible for gratuity.

For your second query regarding leaves, please be informed that your employee is only eligible for leaves in Place A and Place B respectively. The leaves cannot be accrued and taken to the next place unless the company policy allows for it.

Regards,
AJ