Gratuity Liability - Demand On Rent From Old Employee

Hi All,
One of my relative was working in a socks manufacturing unit where he was shown on roll as a manager for last 17 years. The company has provided free accomodation to him with family on the top floor. He was getting a salary of Rs. 6000/ per month only. The company closed in April and now they are demanding the rent from him for whole 17 years.
Can you suggest that is he liable for gratuity? If yes then what terms or plz. help me in sorting out this situation.
Daisy Singh
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Dear Mr. Daisy Singh
From the post, it appears that company is demanding rent just to avoid liability of Gratuity. For rent claim, rent agreement or some proof is required. You were residing on the Top of factory premises which cannot be termed as residential premises. Moreover, you were employed there for the last 17 years and an employee in the factory cannot be tenant. In the nutshell, in rent claim, relationship of tenant and landlord is to be established first and then question of payment of rent arises just like for claim of salary, relationship of employee & employer is necessary. Further back payment can be claimed only for 3 years.
Hence, don't fear and file claim for gratuity.
Thanks
V K Gupta

Dear Mr. Gupta,
Thanks for your early reply. The company is not registered in any labour law act. But it is registered in sales tax. Can he get gratuity yet & how it will be calculated?
Awaiting for early response.
Daisy Singh

Dear Mr. Singh,
Matter is already discussed on this forum and you can search. If you are not much aware, plz engage professional to do so. Because for further examining the matter in view of your query, more information is required no. of persons employed year-wise to check applicability etc.
Thanks
V K. Gupta

The Hon Supreme court in the case Jaswant singh Gill v.Bharat Coking Coal Ltd (2007) has held that internal rules of the Co providing for deduction of dues to employer from the gratuity payable to employees is against sec(6) of the POG Act.
But now there are some HC decisions holding that the recoveries for which the employees have agreed in writing can be made from gratuity.
Varghese Mathew

Dear Mr. Singh,

I agree with Sh V K. Gupta that for further examining the matter many more information shall be required pertaining to the socks manufacturing unit as to the no. of persons employed year-wise to check applicability, its location etc., as such it is better to engage a professional to help you in getting the claim for your gratuity.As you have mentioned that the company is not registered in any labour law/Act. But never mind, merely because the employer has not registered under any labour law will not come to his help rather he will get into more trouble.

Since you are member of Cite Hr from Delhi, thus I presume that the location of the socks manufacturing unit must have been in Delhi as the employer should have taken registration under Delhi Shop & Establishment Rules. All the shops & establishments are covered under the purview of the Payment of Gratuity Act,1972.The same analogy shall apply in your case even if the location of socks manufacturing unit is different.Both the issues (i) claim of payment of gratuity and (ii) recovery of the rent are different matters as such the jurisdiction and dealing authorities shall be different.

If your relative is in possession of the documentary proof of his employment,salary details etc.,it will facilitate for an early settlement of the claim, on the other hand it will be difficult of the employer to prove the tenancy of the house,which was given to your relative without any pre-condition and in his own interest.



BS Kalsi

Member since Aug 2011