Gratuity Dilemma: Can an Employee Claim Gratuity Two Years After Leaving?

Dear Sir, I have one query about the payment of gratuity. One of our employees worked with the company for 12 years. Later, he resigned. On his request, his 2-month notice period was waived off. After the clearance of all his dues, he was issued an experience certificate. At the time of his relieving, neither management paid him any gratuity (as there is no provision) nor did he apply for the same. After a gap of 2 years, he has now sent a letter wherein he has requested the release of his gratuity.

Gratuity Eligibility and Time Frame

My question is: Is there any time frame within which a person has to apply for his gratuity? Is he eligible for gratuity now?

Interest on Delayed Gratuity Payment

In case he is eligible, does the company have to pay interest for the delay?

Please suggest.

Regards,
Vinay D. Dun

It is wrong to say that there is no provision for the payment of gratuity to the employees of your company. The gratuity becomes applicable by default once the employee completes 5 years of service. It becomes payable by virtue of the law. You can pay him the gratuity now. Even if he has delayed it for 2 years, if you deny the gratuity and if he approaches the court, the court might condone the delay. Also, the expenses for fighting the case will be more than the gratuity amount.

An employee can apply anytime after completing 5 years of employment. If they apply two years after completing 12 years of service for their gratuity amount, the company is not liable to pay interest. The company will be liable to pay interest only if the employer delays after receiving the application from the employee.

Regards,
Amiya

If an employee has left the organization at the time of full and final settlement, you need to add one more form for claiming the gratuity for those who are eligible. This will make it easier for you to track. In response to your question, if an employee has left and applies after 2 years, the company is still liable to pay his gratuity as per the Payment of Gratuity Act-1972.

It is the legal responsibility of the employer to pay the gratuity within 30 days of an employee leaving the establishment. This means that even if the employee does not apply for gratuity, the employer should trace him and pay his gratuity. If the employer fails to trace him, he should deposit the amount of gratuity with the appropriate authority under the Payment of Gratuity Act, i.e., District Labour Officer (state establishments) or the Assistant Labour Commissioner (factories and establishments under the control of the central authority). Failing this, you have to pay interest at 12% from the date on which gratuity became due, i.e., 30 days after the employee's departure.

In this case, the employer has to pay gratuity with interest.

Regards,
Madhu.T.K

Gratuity Settlement Responsibility

It is the responsibility of the employer to settle the gratuity amount along with the final settlement. The gratuity is payable as per the Gratuity Act as a part of the final settlement. As it is a statutory payment, it should be paid within the time frame specified by the Act. If the employee is particular about the interest part for the delayed payment, your management has to settle his gratuity along with interest.

Regards,
T. Kumar

Employer's Responsibility for Gratuity Payment

The onus lies with the employer to pay the gratuity to the separated employee within 30 days of an employee leaving the organization. In case the employer fails to do so, then he should pay the gratuity amount to the ex-employee along with interest at 12% from the 31st day of the employee's departure.

It is the legal responsibility of the employer to pay the gratuity within 30 days of an employee leaving the establishment. That means, even if the employee does not apply for gratuity, the employer should trace him and pay his gratuity. If the employer fails to trace him out, he should deposit the amount of gratuity with the appropriate authority under the Payment of Gratuity Act, i.e., District Labour Officer (state establishments) or the Asst. Labour Commissioner (factories and establishments under the control of central), failing which, they have to pay interest at 12% from the date on which gratuity became due, i.e., 30 days after the employee's departure.

In the instant case, the employer has to pay gratuity with interest.

I agree with the views given by Mr. Madhu on the payment of gratuity to employees. It is a statutory obligation on the part of the employer to pay at the time of full and final settlement. Employees need not approach and ask for the release of gratuity payment. Even the employer has no right to stop payment by virtue of showing other parameters like availing personal loans, etc., from the company. Hence, it is better to pay and settle the issue immediately.

Regards,
K. Raja Sekhar

I agree with Mr. Madhu and others as they rightly pointed out that it is the duty of the employer to disburse the Gratuity Amount within 30 days through a cheque, even if the employee has not submitted his claim. If the gratuity is payable by LIC through the company's gratuity fund, an acknowledgement must be received from the resigned employee.

Regards,
S. Sethupathy, Excellent HR Services, Erode.

Understanding Gratuity Under Nigerian Labour Law

My name is Chrytelle Yanwi. I am working in an insurance company as a Human Resources Officer in Africa, specifically in Lagos, Nigeria. Can anyone please help me understand what exactly the Nigerian labour law says concerning gratuity? The company where I work does not practice gratuity at all. I have witnessed the Human Resources Manager sacking a staff member who has worked for the company as the Head of Accounts for over 16 years without any gratuity, apart from his one-month salary. Please help me!

Regards,
Chrytelle

Subject: Payment of Gratuity

Hello Everyone, I have one query: I want to know, does the amount of gratuity depend only on the first five years of service, even if the person has worked for more than 5 years? If not, does its amount increase with the years of employment of the person in a company? Kindly clarify.

Regards,
Nitika

The amount increases with the years of employment of the person in a company.

Regards,
R.N. Khola

I worked as an inspector of Central Excise and Customs for 17 years and resigned in the year 2005. Can you please advise me if I am eligible to get gratuity?

Regards,
Manoharan
Mumbai

I need to know about the rules of payment of gratuity and the minimum service required to be eligible for receipt of gratuity.

Regards,
Manoharan
Mumbai

Eligibility for Gratuity After Resignation

I worked in a central government establishment for 18 years. I resigned from the job due to domestic reasons. Am I eligible for gratuity? Kindly advise.

Regards,
Manoharan, Mumbai

Hi,

If my employer does not pay the gratuity within 30 days of leaving the organization, how do I file a complaint to get the 12% interest that is as per the Gratuity Act of 1972.

I left the organization on 1st February 2016 and have still not been paid my full and final settlement that also consists of the gratuity.

If my employer does not pay that interest or denies it, what course of legal action is to be taken.

If my employer does not pay the gratuity within 30 days of leaving the organization, how do I file a complaint to get the 12% interest as per the Gratuity Act of 1972.

I left the organization on 1st February 2016 and have still not been paid my full and final settlement, which also includes the gratuity. If my employer does not pay that interest or denies it, what legal action should be taken?

First, send your employer FORM I under the Payment of Gratuity Act to claim the gratuity. FORM I should be sent within a month from the date of severance of service. If the employer does not pay, make an application in FORM N before the controlling authority under the Payment of Gratuity Act within three months from the date of sending FORM I. In case of a delay, you have to attach a petition for condonation of delay along with FORM N.

For more information, check my blog at www.labourlawhub.com.