Facing Gratuity Payment Delays: Should I Appeal or File with the State?

I filed my application dated 15.10.2012 in Form "I" Application for Gratuity (to the employer) and Form "N" Application for Direction with ALC (Central) Karnal for payment of Gratuity. The establishment M/S Alchem International, with a turnover of Rs 250 Crores, has factories in Faridabad (Haryana) and Neemrana (Rajasthan) with its headquarters in Delhi and a procurement office (for Glorosia leaves) in Mulanoor (Tamil Nadu). The company processes naturally occurring herbal plants, leaves, and roots, and exports high-value extracts and herbal drugs priced at a few lakhs per kg. I was AVP in the Faridabad factory and worked for 6 years. Due to the unfortunate sudden and successive demise of my mother and two brothers during 2006 and 2008, I was in deep shock and distress. Coupled with this was my wife's ailment of arthritis. In such a situation, I decided to leave the company, explained to the promoters, and submitted my resignation on 22.8.2009 with a one-month notice period as per the terms of the appointment letter. However, the company relieved me immediately on 24.8.2009 without settling my salary, gratuity, leave pay, etc. I approached the management with 10 reminders for payment of gratuity, but the company did nothing to hear, arrange, or deny payment for 3 years. As a well-wisher and friend, one JLC, retired from the TN government, advised me to file Form N with ALC (Central) since the establishment has factories and offices in multiple states. ALC (Central) Karnal took about a year to decide the jurisdiction issue and passed an order in favor of the company. In his order, ALC recorded my background details as aforesaid but rejected my filing and informed me that being a factory, the appropriate authority is the state government, not the central.

Next Steps: Appeal or Accept?

1. Shall I go ahead with an appeal?

2. Shall I accept the order and file with the state? If so, please send relevant forms under the Haryana state Gratuity rule (instead of Form "I" and "N" as in the case of central) as I belong to Tamil Nadu.

Regards.

You should file the same claim before the Controlling Authority under the Payment of Gratuity Act in Faridabad (Labour Officer, Faridabad) where you served. Management always tries to take advantage of jurisdiction, as in your case. Your stance should be that you were appointed and last worked in Faridabad. One should stand up for their rights.

Thanks and all the best,

V K Gupta

I have gone through the details of your post. The jurisdictional issue needs to be decided with reference to the question as to who is the appropriate government for your factory. The appropriate government has been defined by Sec. 2(a) of the Payment of Gratuity Act 1972 as follows:

Appropriate Government means

(i) In relation to an establishment:

a) Belonging to or under the control of the Central Government,
b) Having branches in more than one State,
c) Of a factory belonging to or under the control of the Central Government,
d) Of a major port, mine, oil field, or railway company, the Central Government.

(ii) In any other case, the State Government.

From the above definition, it is clear that the Central Government can be the appropriate government only in the case of establishments (not factories) having branches in more than one State. In the case of a factory, the Central Government will be the appropriate government only when it belongs to the Central Government. In your case, Alchem International, I presume, neither belongs to nor runs under the control of the Central Government, and therefore the appropriate government for the above factory is the State Government even though it has units in more than one state. The ALC (Central) has rightly decided the jurisdictional issue. You may, therefore, have to file your application afresh before the Assistant Labour Commissioner (State) under which jurisdiction Faridabad falls. Please note to claim interest for the period of delay since it is not due to any fault of yours. Please procure the relevant forms under Haryana State Rules as I do not have them or members can respond to your request.

Hope this helps.

Regards,
B. Saikumar