Gratuity Act - Urgent Reply

Dear All Sr. pls. give urgent reply,
In our organization, we engaged contract employee for packing division, one employee who has completed 6 years in our organization as contract employee. Every year we have renewed contract. Now, he has terminated by thier contractor and he has demanded gratuity.
My question is that he is eligible for gratuity or not?
Thanks & Regards,
pm

Was there any break in service of the employee.
If yes you are not suppose to shell put Gratuity.
Has he worked with you as an "Employee" as per Gratuity Act then you are supposed to pay out the same

Dear
If the contract employee was in the employment of the contractor then the payment of gratuity is to be made by the contractor if the contractor is covered under this P G Act & the contract employee was in continuous employment as per section 2A of the Act. Principal employer is not liable to make this payment.
Opinion/ comments submitted as requested.
With Regards,
R.N.Khola

Dear sir,
Is any employee complted 5 year in org. but it include 1 year training & half year probation period than he.she is eligible for graduity amt.
reply your important comment / advice

Dear PM,

Please read the Act. The Gratuity is payable only to such persons who are our employees. The contract labour being employees of the contractors dont have employer - employee relationship with us. In the event a contract labour has served as an employee of your contractor for more than 5 years of continuous service, it is the contractor who is liable.

In the event contractor does not pay him gratuity upon his separation from employment, the worker may approach the Controlling Authority under the Act and file a complain against his employer( your contractor). In any event liability will not come on the principle employer. The PE is responsible under section 21(4) of C L (R&A) Act, 1970 in the event of default by a contractor in payment of 'Wages' and not other components of benifits. Please refer to the definition of wages under the Payment of Wages Act,1936 which excludes Gratuity.

Hope above clarifies your doubts.

Regards

Devbrat Jha

Associate Vice President (HR) , DFPCL, Pune