Query On Gratuity Years Consideration For A Employee

There is a case here in my company in which the employee joined in Sep-2006. She worked until Feb-2012. After that, she sent us an email stating that she was pregnant and her due date was in September 2012. She then requested leave until the following March. Subsequently, she continued to request leave extensions until her delivery. Even after her delivery, she did not return to work until December 2012. She then sent another email stating that she would not be able to come back until January 2013 and requested further leave extension. In response, we sent her a letter asking her to return to work in December 2012, but she resigned instead.

Now, when calculating her Full & Final settlement, should the number of years considered for Gratuity be until her last day worked, i.e., till Feb '12, or until her delivery date, i.e., Sep '12, as we have already paid her the maternity benefits, or until the date she resigned, i.e., Dec 2012?

Please help to clarify the above query.

Thanks & Regards,
Rucha

How long is the maternity leave in your organization? Was this almost a year's paid leave?

Are you aware that as per the Maternity Act, a female is entitled to 12 weeks (3 months) of paid leave?

Regarding your query, if you have already paid her all her maternity benefits, that's good.

I am unsure about what would be settled in the Full & Final settlement as there are no salary claims on her part. I hope you have not contributed to her PF account, as there is no contribution to the PF account from either side during maternity leave.

For gratuity, her tenure should be considered from her Date of Joining (DoJ) until her Last Working Day (LWD).

I believe senior management should also be involved in addressing this issue to discourage females from resigning after availing maternity benefits.

While resignations on medical grounds are understandable, there are cases where individuals take advantage of maternity benefits.

I am sorry to state this. I am a female myself, but I do not appreciate situations where individuals exploit benefits meant for their own advantage. Such instances make companies hesitant to hire married women who have not yet started a family, and genuine cases are unfortunately overlooked.

Dear Ms. Ankita (married or unmarried?),

I'm very sorry for your concluding remarks on gender. You never know under what circumstances she has to resign. You have seen many millions just like that go absconding without a trace, and you are so angry at this young mother, why? After all, employees come and go for many reasons, and how inhumane it is to solely blame all mothers en masse; it's unfair. You can't ignore the millions of women who postpone their pregnancy just for the sake of their jobs. What I would have suggested is to talk to her compassionately, understand her difficulties, and if possible, offer help or decide accordingly. How can you be so upset about it?

Regarding your query, as others have mentioned, first settle and regularize the procedures according to your policy or applicable rules, and then declare her last working day. Only then will everything be clear to you. Keeping everything open without closure leads to uncertainties.

Long live motherhood, including Ankita.

Kumar S.

Dear Friend,

For the purpose of Gratuity coverage, which is based on 5 years of continuous service, the period to be calculated would be from the date of joining until the date of separation. In this case, since she was on the company's payroll until Dec '12, i.e., the date of her submitting the resignation, Gratuity would be considered only until Dec '12. When considering Gratuity coverage, it is the tenure on the company's payroll that is taken into consideration, not just attendance.

Regards,
B.K. Mohanty
Advisor and Senior Consultant
Bhubaneswar
9937822563

Sir with regards to your advice, I have foll query:

In this article, pg no 3 salary is define as to what is included and what is not.

It defines as follows:

“wages” means all remuneration paid or payable in cash to a woman, if the terms

of the contract of employment, express or implied, were fulfilled and includes –

• such cash allowances (including dearness allowance and house rent
  
• allowance) as a woman is for the time being entitled to;
  
• incentive bonus; and
  
• the money value of the concessional supply of foodgrains and other
  
• articles,
  

but does not include –

• any bonus other than incentive bonus;
  
• overtime earnings and any deduction or payment made on account of
  
• fines;
  
• any contribution paid or payable by the employer to any pension fund
  
• or provident fund or for the benefit of the woman under any law for
  
• the time being in force; and
  
• any gratuity payable on the termination of service;
  

If you could help me solve the query as what you said and what is given in the article is i feel contradictory. Please guide me.

Regarding Gratuity -

Dear friends,

There is a question: if an employee requests to be paid gratuity after completing 5 years of service but is not resigning or retiring from the job, can we pay him gratuity?

Dear Friend,

The issue in question was on Gratuity coverage only, to which I have suggested as mentioned in my earlier note. What you have referred to was wage coverage only. Moreover, gratuity legally may not be paid if the separation is due to termination by the company, and in all other cases, gratuity is payable.

Regards,
Bk Mohanty

No, gratuity is not paid in between the service, which is only settled at the time of separation.

Regards,
B.K. Mohanty

That is because, on average, there are only 26 working days. We consider an average of 30 days and 4 weekly offs, regardless of the month or 2 weekly offs. This is the general practice as suggested by the rule. Hope it helped :)

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Dear Friend,

Good question. You will appreciate that the labor laws are mostly made favoring the working-class employees and not the management. The working days in a month are considered as 26. Hence, the final calculation is made on the basis of 26 and not 30.

Regards,
bkmohanty

Hi, thanks for the comments, and I also agree with you about such practices, except for a few genuine cases due to medical exigencies.

The maternity leaves given are as per the rules of 84 days in our company also, but we were abiding by the rules of not terminating an employee during the maternity period, so we had to wait. She was also undergoing a high-risk pregnancy period, so we gave her an extended leave in which she was on leave without pay. In September, we paid her maternity benefit. She is not covered under PF in her salary.

So, I guess our decision of considering her DOJ till LWD is good.

Thanks for your guidance.

Regards,

Rucha

4 Sundays are there in the month, and while calculating gratuity only working days are considered, i.e., 26 and not 30 days.

Dilaila

Dear Rucha,

An HR professional is supposed to be fair and impartial. Such problems arise when there is prejudice or malevolent intent, complicating simple issues.

An impression has been created that the pregnant female employee has taken undue advantage of the Maternity Benefit Act. The intrusion of this fact, along with queries and doubts on the Maternity Benefit Act 1961, has clouded the real issue.

Secondly, you have stated at one place that:

"She is not covered under PF in her Salary."

Under what circumstances? When one lets their mind be occupied and clouded with extraneous factors and a hostile attitude towards employees, such issues crop up, complicating simple matters.

What is the basic issue here? It's about gratuity - and what should be the service period considered for the payment of gratuity?

Right? How is the service period taken into account? From the date of joining to the termination (or cessation) of service. She joined in Sep 2006 - so there is no dispute on that.

When did she leave the service? Is it not that it was upon her submitting her resignation? In that case, HOW CAN her service be considered to have ended on her LWD (Last Working Day)? Was she not granted Maternity Leave as per the provision of the Act? And was this leave after her "Last Working Day"? Did she not extend her leave subsequently?

Does a company extend leave to NON-EMPLOYEES? So was she not an employee post her Last Working Day?

When one thinks of the answers to these questions in a DISPASSIONATE way, i.e., without any prejudice or ill-feelings, the answers will come in a flash, and there will be no confusion or ambiguity.

The date of cessation of employment is to be considered as Dec. 2012 when the employee resigned (and hopefully acceptance and follow-up done by the company).

Moreover, since she had worked for more than 240 days in the year, it should be considered as a COMPLETED YEAR of service for the purpose of Gratuity. (See Sec. 2 A - Continuous Service of the Payment of Gratuity Act 1972)

It's unfortunate that such Social Security enactments are not being dealt with the sensitivity they deserve, especially when it's expected that there should be no gender bias from same-gender HR professionals. We should understand that, apart from Medical complications, in these days of the nuclear family, it's difficult for a working mother to re-join duties and leave her infant child. Moreover, availing Maternity Benefits as ensured by the Act should not be treated as misconduct or with any stigma; and the decision to resign should also be understood and respected.

Warm regards.

Hi Rucha,

If she had a high-risk pregnancy, surely she was advised to rest, right?

As mentioned earlier, let us consider each case separately. While there may be other cases, let us focus on this particular one.

A woman who is pregnant and experiencing a high-risk pregnancy may not be able to care for herself properly, as she may be on medication and physically weaker compared to other pregnant women. It's important to understand why the pregnancy was considered risky.

I still wonder if we can explore options to reduce resignations post-maternity leave for various reasons. In her case, I would suggest the following:

As the HR representative, request the woman to provide her gynecologist's certificate stating her condition and request the management to give her situation due consideration.

Additionally, it's important to note that during a high-risk pregnancy, the baby may also be at risk. Different medications during pregnancy can have side effects on the newborn. I mention this because I have closely observed a high-risk pregnancy in my family, and both the mother and child still experience some side effects.

Handle this case separately.

Furthermore, the duties of HR are never just black and white; they are often in a gray area. This is not because we want to show favoritism but because we must consider the emotions and feelings of each individual.

While we must adhere to rules and regulations, it is also our responsibility to ensure our colleagues are content and satisfied with the agreements they have made.

Best regards,
Rucha