Understanding Gratuity Entitlement in Contract Employment

I have read many responses on articles on gratuity but need some clarifications... We are 2 people working for a MNC—contract employment, from the past 10 years and 20 years respectively. We get a consolidated salary and PF is deducted from the same. We do not receive any other benefits. I just need to know if we are entitled to gratuity. The contractor says he has nothing in writing about this claim. If we leave the company, are we entitled to gratuity? Please advise.

We do not have anything in writing. Our contractor refuses to put it in writing; he says we should ask the company. Please advise.

Dear,

You are entitled to gratuity if the MNC has employed more than 10 employees, regardless of whether the employment is on a contract or regular basis.

You must keep your contract letter with you, showing your continuous employment with the MNC. There should not be a break in service. If there is a break in service of less than 5 years, then you may not be entitled to gratuity.

Furthermore, you may email all your contract employment credentials to me, and I will provide you with a concrete answer.

Mohd. Arif Khan
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Dear sir,

If any person works for a period of 5 years, he is eligible for GRATUITY. All employees are eligible for GRATUITY regardless of salary or status. Do you have any proof of your date of joining? If it is available, please advocate to receive the GRATUITY. Keep advocating until you receive it.

All the best,
Edward G. Lawrence

Dear Folks,

Gratuity is a compensation and benefit that should be given to all employees in any circumstances by the employer, whether they are a contractor, a direct employee, or an indirect employee. Never mind about this.

If your contractor is earning a profit, it is good according to the industry. He has to provide gratuity, regardless of whether it is mentioned in writing or not. If it is not specified in your appointment letters, no problem. It is a written format in statutory compliance. You mentioned that your experience is 10 years and 20 years. In the years 1987 and 1997, the formats of appointment letters were different. If your company and your contractor are registered with the government, they should provide gratuity.

When your contractor asks you to approach your management, this statement itself clearly indicates that you are eligible. In reality, your contractor is defending himself. He is the one who should provide the gratuity.

If you still feel the need for clarification, you can approach any chartered accountant from a firm related to software concerns.

From my perspective, having proof of an appointment order and working for the concern through a contract makes you very secure. Ten or twenty years of experience entail a substantial amount of gratuity.

Thanks and Regards,

Manimegalai

Definitely, we are entitled to gratuity.

Please send me your PF account number and the date from which your PF has been deducted.

Ajay

Hi Arif,

I never miss your comments. It's so true... I am also very much interested in labor laws. I agree with you; both these MNC professionals are entitled to gratuity. You also mentioned that if they have a break in service before completing 5 years, then they are not eligible. However, I feel that if they have put in a minimum of 240 mandays in each year, including breaks, it should still be deemed as 5 years of continuous service.

Is it true that an employee who has worked exactly for 4 years and 240 days (in the fifth year) only becomes eligible? Could you please shed some light on this?

Prashanth

We haven't had any breaks; our contracts are renewed every year. However, in 2003 and 2004, we did not receive any contract letter, but we were still receiving our salaries, and our PF was deducted. Form 16 for the same was also provided for the year.

Can we start incorporating gratuity in the benefits at any time, even if we have not included it in the past 12 years of the company's existence? Please tell me how we should go about it?