Am I Eligible for Gratuity After 7 Years of Service Including Overseas Work? Seeking Guidance

Hi experts, I worked with an IT company in Bangalore for almost 7 years. During this 7-year duration, I also traveled to the USA to provide service and consultation on behalf of my company. I was transferred on an L1 visa to serve the client in the USA and then return to the India office. Now, after resigning from the company, I am denied gratuity payment, with the reason being I need to work 5 years in an Indian location for eligibility for gratuity payment. In my case, I have worked around 4 years in an Indian location and 3 years in the USA but serving the same company. This denial came as a surprise, as per the Gratuity Act which states it is continuous service to the employer for 5 or more years, which is true in my case.

Additionally, the gratuity amount was also shown as part of the CTC by the employer. I have received my experience letter where it is mentioned as 7 years of service to the company.

I need guidance on whether I am eligible for gratuity payment from my previous employer and in case I am eligible, what legal action I can take to receive the payment.

If you have worked for more than 5 years continuously in a single company, then you are eligible for gratuity and also eligible to take legal action against the company. My question to you is, does your organization fall under the Gratuity Act?

Thanks, Prashant. Yes, I worked in a single company, but as most IT companies send people onsite for clients, I went to the USA on an L1 visa. I think my organization should come under the Gratuity Act; it's a well-known IT company in India, similar to Wipro or Infosys, etc.

Steps to Take Against Previous Employer for Gratuity Payment

I have one more question: what steps can I take against my previous employer to get the gratuity payment?

Thanks,
Pranab

Options for Pursuing Gratuity Payment

Any suggestions on the different options available to pursue against my previous employer to receive the gratuity payment? I have emailed the concerned person in the company regarding the denial of the gratuity payment, but he is not responding at all. Please advise on what my next step should be to initiate the process. I am currently in Delhi, and my former employer is in Bangalore, so meeting in person is not feasible.

Thank you,

Pranab

[Phone Number Removed For Privacy Reasons]

You may apply in Form I to the previous employer. If they refuse, saying that you are not eligible for gratuity since you did not serve in India for five years, you may point out that your CTC included gratuity. It would be unfair to refuse it as it was part of your remuneration. Deputation will not interrupt your service in any way. Therefore, you can seek assistance from the Labour Department.

Regards,
Madhu.T.K

As Mr. Madhu advised, you may apply in Form I, and a copy should be marked to the Labour Commissioner's Office in Bangalore. Since you are eligible for Gratuity (having received an Experience Certificate), please include a copy of it along with Form I to the Labour Commissioner's Office.

Your employer is required to pay your Gratuity automatically within 30 days of your departure from your previous employer.

Best regards,
K. Gopalakrishnan
Sriperumbudur, Tamil Nadu

Eligibility for Gratuity Payment

You are very much eligible to receive gratuity from your employer. Gratuity comes under CTC as per your appointment order given by the employer, which is acceptable. Denying gratuity even after completing continuous service with one company is a violation of the rules by your employer. You were given an appointment order in India and were deputed by the same company in the USA. Hence, basically, you are posted in an Indian company and asked to go on deputation on a work permit visa. If a person continuously works with an organization for a period of 5 years, they are eligible for gratuity. Additionally, the payment of gratuity is a statutory obligation by the employer. You can approach the LABOUR COURT and file a case for the breach of duty by your employer.

Thanks,
Raja Sekhar K.

Dear Shri Pranab,

As advised by the seniors above, please file your claim for gratuity in the prescribed form supported by a copy of the experience letter which you possess. File it personally and also send a copy by speed post and retain the postal acknowledgement. Confirm its delivery to the former employer from the Speed Post tracker website. If you do not receive gratuity payment or any other written reply from the employer, please approach the Labour Commissioner (State) of the area. You will receive the gratuity with interest beyond 30 days of receipt of your claim in the employer's office. Please do post your success story for the information of others.

With regards,

Thank you, Prashant, Madhu.T.K, K. Gopalakrishnan, Raja Sekhar K., Debashreeta, Shyam, and Manish for the valuable advice and suggestions. I will be following the advice given and will inform citeHR accordingly.

Thanks,
Pranab

Dear Shri Pranab, As you have written that gratuity was a part of your CTC, it means that the company was discharging its liability concurrently by including the gratuity component in your monthly salary. This could be the reason for their denial. However, you are eligible to draw gratuity based on your service rendered, if not already paid.

Regards,
S.C. Verma

Hi S.C. Verma, it is shown as a part of CTC in the offer letter or appraisal/hike letter but never paid till date in the last 7 years. So, I should be eligible for the payment now after resigning.

Request for Labor Department Address

One more help, could I get the complete address for the labor department? I am not sure whom to address in the labor department and what is the address in Bangalore city.

Appreciate all the help!!

Thanks,
Pranab

Seeking Legal Advice for Unsettled Dues

I had worked in a company as an Office Manager and received a salary of Rs. 14,500 per month at the time of leaving the company. However, the employer has not settled my bonus and encashment of earned leave to date. Can I file a lawsuit against the employer before the labor commissioner in Tamil Nadu for the year 2007-2008?

Please advise.

Regards,
V. Raajaram

Of course, you are eligible for receiving gratuity payment. You should apply using the prescribed format under the Payment of Gratuity Act through registered post as well. If your previous employer denies it, then you should file a written complaint to the appropriate authority under the Payment of Gratuity Act. If your company has branches in more than one state, the appropriate authority is the Assistant Labour Commissioner (Central), Bangalore; otherwise, it is the State Labour Commissioner.

Regards,
Manoj Prasad

Understanding Gratuity Eligibility Under the Payment of Gratuity Act, 1972

According to Section 4(1) of the Payment of Gratuity Act, 1972, gratuity shall be payable to an employee upon the termination of their employment after they have rendered continuous service for not less than five years:

• On their superannuation
• On their retirement or resignation
• On their death or disablement due to accident or disease

Absence from duty without leave cannot be said to result in a breach of continuity of service for the purpose of this act (Kothari Industrial Corporation v. Appellate Authority, 1998 Lab IC 1149 (AP)).

Continuous Service Definition

According to Section 2A, an employee shall be considered to be in continuous service if they have been in uninterrupted service for a period, including service which may be interrupted due to sickness, accident, leave, absence from duty without leave, layoff, strike, lockout, or cessation of work not due to any fault of the employee.

Where an employee is not in continuous service within the meaning above for any period of one year or six months, they shall be deemed to be in continuous service under the employer.

Hi Experts,

I received a mail from my previous employer's finance department stating the following:

"Dear Pranab,

Further to your note, please be advised that you will be eligible for gratuity payment under the company policy if you have completed 5 years of service with X Limited in India. In your case, given that you have not completed the required 5 years of service with X India, the gratuity payment is not applicable.

A strict interpretation of the Gratuity Act requires 5 years of continuous service. However, as an employee-friendly measure, X's policy is to pay gratuity even if a person completes 5 years of service at X India, with gaps where the person has served in overseas offices. The overseas offices of X are not the same employer and therefore, the duration spent in overseas offices does not get recognized for payment of gratuity."

The person is saying that both the India and overseas offices are different, but I was only transferred overseas. I also have a transfer letter from the employer. So, please suggest if it's proper to go legally now.

Thanks,

Pranab

Dear Pranab,

In my opinion, your position is quite sound, and you are eligible for payment of gratuity under the Payment of Gratuity Act, 1972, for total services rendered in India as well as overseas. However, I request you, Shri Pranab Ji, not to hurry for legal recourse. Let it be the last tool.

In reply to the aforementioned mail, you may send a rejoinder to the former employer and also submit a formal claim for gratuity stating full details of services rendered in this country as well as overseas, supported by copies of company orders to that effect which you have with you. If they refuse to pay, you may file a complaint with the Assistant Commissioner of Labour (State or Central as the case may be). You will get the desired relief from him. Directly jumping to the court of law without exhausting other statutory channels may spoil your case, I am afraid. So please prefer to go step by step. It may take some time, but ultimately, the victory will be yours only. Please do post your success story on this site.

With regards,

I would suggest you share the lines from your transfer letter with us because, legally, we can interpret the usage of words in an official letter in various ways. You can redact the company name and please share the transfer letter issued to you when you traveled onsite.

Regards,
Jay

Hi Pranab and others, I'm also in a similar situation here. I worked for an IT service company in Bangalore for 5 years and 9 months, and I'm currently in the notice period. After 3.5 years in India, I was transferred to the U.S. on a work permit with the same company and returned to the same Indian company after 1.5 years. In my Indian CTC, gratuity is also included.

My company's policies state that only Indian service is considered for gratuity. I think I may not be paid gratuity even though I served the company for close to 6 years.

I'm not sure if gratuity is entirely governed by government labor laws or partially influenced by companies, as some companies even pay for 3 years of service.

Please share your experiences and any advice on the course of action. I will also reach out to HR.

Thanks,
Mohan