Gratuity Confusion: Does My 6-Year Tenure at a 60-Employee Firm Qualify?

I worked with a partnership firm for 6 years, which employs about 60 people. I recently resigned from the company after 6 years. When I approached them for gratuity, they said the company doesn't fall under the Gratuity Act. Can anyone clarify this?

It seems that they are avoiding paying you gratuity. You should approach the nearest labor office for this matter.

Regards,
R N KHOLA

Yes, I agree with Mr. Khola because, as per the act, every shop or establishment with 10 or more persons employed is covered under the Gratuity Act. I hope you are eligible for the gratuity. Please approach the labor office immediately.

Regards,
Suneel Pepakayala, HR Executive.

You should write a letter to the company, mentioning your designation, duration, and general duties, stating that you have worked with them for more than five years and politely request them to pay you the gratuity amount. Most probably, they will not reply. Wait for about two weeks and send them another letter politely reminding them about your gratuity payment; do mention or reference your first request as well.

Both letters should be sent by registered post acknowledgment due (registered AD). When the letter is delivered, the postman will take an acknowledgment from your company that they received your letter, and this acknowledgment will be delivered back to you by the post office. Keep both the acknowledgments and photocopies of the letters with you; you will require these later on.

Scenario 1

If the company does not respond to you, then take your appointment letter, pay-slips, copies of the letters, and AD receipt and go to the labor officer and register a complaint.

Scenario 2

If the company responds to you in writing that they are not covered under the Gratuity Act and refuse to pay gratuity, then take the company's reply, your appointment letter, pay-slips, copies of the letters, and AD receipt and go to the labor officer and register a complaint.

As per law, if you are eligible for gratuity, the company has to pay gratuity to you automatically, i.e., you do not need to make any request or application for it. However, to make your case stronger, you should show that you made polite requests, but still, the company is not paying you gratuity in violation of the Gratuity Act.

Non-payment of gratuity is a serious offense; the labor officer will take strict action, but you need to be a little patient and calm as these matters take time.

In my experience, some companies do take advantage of naive/unsuspecting employees, but once they get a notice from the labor office, they immediately clean up their act and settle all claims/dues as per law.

Hope this helps.

Best Regards,

Ritesh Shah

Authority Under the Payment of Gratuity Act

The authority under the Payment of Gratuity Act is the Assistant Commissioner of Labour. You shall prepare a petition providing the details of your date of joining and date of relieving, and the proposed Gratuity Amount claim. The authority will issue a notice to the respondent and deal with the matter accordingly.

Regards,
Sasikumar.R

What was your position and nature of work in the company? If you have worked for more than 5 years, you are entitled to gratuity. You should approach the concerned Labour office.

Thanks & Regards,
Sanjeev Baliyan
Sr. Consultant (Labour Laws)
Clairvoyant Management Solutions
Noida
[Phone Number Removed For Privacy Reasons]
www.clairvoyants.co.in

Dear Nick_07, Without going into much complexity, I would suggest the following:

1. Any establishment/company/shop registered under the Companies Act or Shops & Estb. Act has to pay gratuity as per the provisions of the PG Act, without a doubt.

2. If your HR department has denied this, provide them with a claim in Form-I (Application for Gratuity by an Employee) and obtain a receipt. Wait for 30 days. The employer is liable to pay gratuity within 30 days of separation. If they fail to do so, they are liable to pay interest on the amount due after the 30-day period.

3. If you have not received your gratuity within 30 days, lodge a complaint with the ALC of your region, who is the Payment Authority under the Act. They will address the matter appropriately.

Best wishes,

AK Jain
HR Personnel
NCL, CIL

It is as simple as that which has been suggested by others. If you still have difficulty, use these forms and submit them to your employer: one personally, one by ordinary post, one by speed post or RPAD, and one copy to the designated authorized officer for your office. Make sure you have a copy of this claim form duly acknowledged by your employer. Wait for some time, then send a reminder quoting your original claim form, giving them a 15-day period. If nothing happens immediately, file a petition to the Authorized Officer (you can also meet them personally). In your reminder, mention that your employer is liable to pay overdue interest as per the law until the date they make the gratuity payment. You can make use of the attached forms as deemed necessary.

All the best.

We all understand that your ex-employer is making attempts to avoid paying your gratuity. Communicate once again and demand what is due. If the stalemate persists, take up the issue with the concerned ALC and follow up regularly to get what you are owed.

Best wishes,
Sourav Mukherjee

Eligibility for Gratuity under the Payment of Gratuity Act

Regarding your query, you are eligible for Gratuity under Section 4 of the Payment of Gratuity Act - 1972 Rules.

Regards,
V R RAO PULIPAKA

Politely approach your ex-organization's HR head or authority to explain the Payment of Gratuity (PG) Act. If an employee is terminated by the company due to fraud or theft after more than 5 years, then only is the employee not eligible to receive gratuity. As per the act, if any employee has worked for 4.8 years, they will be eligible for gratuity.

Gratuity Calculation

Under Section 2(s) of the PG Act, your gratuity is calculated as: (Basic + DA) / 26 * 15 * 6.

Penalties

- Rule-9
- Imprisonment for 6 months or a fine up to Rs. 10,000 for avoiding payment by making false statements or representations.
- Imprisonment not less than 3 months and up to one year with a fine for default in complying with the provisions of the Act or Rules.

Regards,
Sathish

Sr. Executive
HR Dept,
Kobelco Cranes India Pvt Ltd,
350, DR13 SOUTH, SriCity DTZ.