Am I Eligible for Gratuity After Switching from Employee to Consultant and Back?

Hello, please advise me. I joined an organization on January 15, 2007. On February 28, 2010, I was asked to resign and work as a consultant starting from March 01, 2010, with no change in responsibility. Again, on July 01, 2010, I was given a new letter stating that I am a regular employee. My last working day was February 15, 2012. Please let me know if I am eligible for gratuity.

As per my knowledge, gratuity is payable after 5 years of continuous service. In your case, you have already separated and then rejoined. Therefore, you will not be eligible for any gratuity amount. If you hadn't resigned, then you could have claimed it. However, in this case that you have mentioned, you can't claim it.

Friends, am I right? Please reply.

Gratuity Eligibility Under the Gratuity Act 1972

The Gratuity Act 1972 states that an employee should complete 5 years of continuous service to be eligible for gratuity. Continuous service is defined as 240 days of service above ground and 190 days of service below ground. In your case, you haven't completed the required continuous service of 5 years.

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:

- (a) on their superannuation,
- (b) on their retirement or resignation, or
- (c) on their death or disablement due to accident or disease.

You should be deemed to be in continuous service from 15-1-2007. A mere change of designation does not alter your status as an employee, and the resignation on 28-2-10 is a mere paper arrangement to effect a gap in the continuity of service. In fact, there is no gap in the continuity of service since you have been discharging the same duties in the guise of a consultant that you were performing as an employee. You can make a case before the Controlling Authority by filing an application.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

Thank you very much for your assistance. Could you please help me with how to present my case? The company is based in NOIDA (NCR). They are reluctant to provide me with my gratuity. I need to convince the CEO that I am eligible. The COO has mentioned that although I have performed the same duties on paper, there seems to be a gap. Even though my resignation was coerced, it was not voluntary on my part.

I appreciate your help in advance.

Understanding Employer-Employee Relationships

It is said that circumstances speak louder than a witness. Your resignation and subsequent engagement from the very next day as a consultant are a camouflage to hide the employer-employee relationship. The Controlling Authority may well lift this veil and see the real relationship.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

The company I was working for is in NOIDA (NCR). Please let me know to whom I should approach to address my concerns. I assumed the employer would provide gratuity, but they are refusing to do so. Do I need to hire a consultant? Could you provide a reference for someone based in NOIDA?

Thank you.

I know my case is not simple, and it will be very difficult for me to prove the continuation of service. When I say that I have completed 5 years, the company claims they were nice to me by keeping me as a consultant for 4 months instead of firing me. If that was the case, then why did they give me another appointment letter? If I am not legally eligible, then I will not pursue my case. Please let me know the name of some consultant or officer's address in NOIDA.

Regards.

Dear Sir, I joined the organization on 5th May 2007 as a contract employee. In 2008, I was regularized by the company but with resignation from the contract employment. Now, I have resigned from the service on 28th March 2012. I completed the notice period up to 12th May 2012. Seeing this, my five years were completed continuously.

Am I eligible for gratuity? Please guide.

In all probability, you will not be eligible for gratuity as you have not completed five years as a regular employee of the company. If the contract with the contractor is a sham, which needs to be proved on the basis of evidence, then probably you can stake a claim to gratuity.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai