Is It Fair for CEOs to Pressure Employees to Quit to Avoid Gratuity? Let's Discuss Solutions

Avoiding Gratuity Payment: Ethical Concerns and Solutions

If at the end of the fourth year, a company CEO wants to avoid gratuity payment to an employee by finding some problem with the employee, such as putting them into unethical harassment work (e.g., forcing them to work in a hazardous environment) and indirectly applying pressure to make them leave the company, is it correct?

What can be done to resolve this situation if the employee has strong evidence of this malicious behavior? There are numerous cases like this in the company. Please discuss in detail.

I do not think that an employer will happily do what you have said just to avoid the payment of gratuity. If gratuity is the real burden, then they would have opted for a fixed-term contract for employees, say for three years only, and would have replaced the employees without renewing the FTC once it is over. Certainly, there may be unethical and unprofessional employers, rather than those running one-man shows, who may attempt to do this. If so, the future of such establishments will be bleak since they will fail to attract good professionals as employees. In my opinion, good professionals work only with professionally managed companies, and the latter will not try such tricks on employees.

Regards, Madhu.T.K

1. Between the third and fourth year, plenty of employees are targeted and packed off.

2. A company running on average with 80 to 90 employees, with a very high turnover of more than 200 employees in two years, is a live example of unprofessional management.

3. You have clearly said it is a one-man show—agreed.

4. You have not yet answered my query: How can an employee win the situation and teach the employer a lesson so that future employees are safeguarded?

Regards,
nv

Madhu said it rightly.

Regarding your query, please clarify what you mean by 'win the situation.' Is the objective still to want to stay in that company and work and get the Gratuity? Or is it to hit back at the owner? Or is it something else?

If it's the first one, why do you want to still work in that company despite having such unpalatable/malicious situations?

If it's the second one, I think you don't need to do anything at all—when the owner is digging his own grave—in the long-term, why do you want to waste your time and effort? Don't you have a career/life of your own to focus upon?

If it's something else, please elaborate.

And as a general rule, any professionally-run company will not lose people for just 1-2 reasons, unless they are related to performance or ethics. There needs to be a combination of reasons—like Madhu said.

I think the more appropriate way of seeing the situation is this: how to handle it, rather than in terms of winning or losing or teaching him a lesson.

One way to handle this is to prepare to leave as soon as someone reaches the 3-year experience stage—instead of waiting for him to send you out. That way, you would be leaving at your own pace and choice [assuming he will indeed send everyone out after 3-4 years].

Regards,
TS

Thank you TajSateesh for a precise picture. I have seen these types of bosses bursting often: "This is my company! I want to work like this only." Immature guys! One day, definitely they will say, "This is my grave! I want to be cremated like this."

nv

Normally, such incidents will never happen in a professionally managed organization. Professionally managed organizations comply with statutory provisions and never allow such incidents to occur to their employees. Since you have mentioned it is a one-man show, then such incidents may be possible.

Regards,
LK

As I understand, is there any remedy available under the Payment of Gratuity Act if the employer acts in a frivolous manner by removing the staff before the completion of 5 years' tenure? I presume that this is what Mr. Vasudevan is expecting from us.

In my opinion, Controlling officers are appointed by the Central Government to look into these grievances. I suggest that you approach the controlling officer in your jurisdiction and get his views.

Thanks,

Dr. Sureshkumar

Dear Vasudev, there is no recourse in the Payment of Gratuity Act to deal with or rather "teach the employer a lesson." The Act only makes it obligatory for an employer to pay gratuity once an employee becomes eligible for it. The controlling authority under the Gratuity Act is the District Labour Officer, and even he cannot do anything against such an employer legally.

Then you can file a joint petition before the District Labour Officer or Assistant Labour Commissioner, the Authorities under the Industrial Dispute Act, to prevent the employer from engaging in such "unfair practice."

Regards,
Madhu.T.K