Employer Refusing Gratuity After 6 Years of Service – How Should I Handle This?

My employer is refusing to pay me gratuity after my 6 years of service. They claim that my performance was unsatisfactory. I have sent them emails regarding my gratuity, but they have not responded. Instead, they are now pointing out the mistakes I made during my work. I submitted a proper resignation with one month's notice. I have also received my relieving and experience letters. Please advise.

Regards.

I am informing you that you have received the relieving letter. In that letter, they will mention the date of joining and the date of leaving. Based on that, you can mail the letter again as proof of your relieving letter, stating that you are proceeding legally. Even if there is no reply, send a notice through a lawyer, and then you will receive your gratuity.

Regards

Hi, you mentioned that you have received the relieving letter in which they will mention the Date of Joining and Date of Leaving. Based on that, you should email the letter as proof of the relieving letter, stating that you are proceeding legally. Even if there is no reply, send a notice through a lawyer, and you will receive your gratuity.

Thank you, sir, for your kind reply. I just want to confirm whether, based on non-satisfaction with my performance, they have the right to refuse my gratuity. Are the emails they are currently sending about my work relevant for the payment of gratuity?

Yes, sir, in my relieving letter, the date of joining and leaving is mentioned.

Regards

Reg: Non-payment of Gratuity

Employers can withhold gratuity from an employee in cases where a loss has occurred due to negligence or in the event of a moral turpitude act. Otherwise, the employer is obligated to pay the gratuity.

Regards,
Satish B

Eligibility for Gratuity Under the Payment of Gratuity Act, 1972

As per the Payment of Gratuity Act, 1972, you become eligible for the payment of gratuity. The Payment of Gratuity Act applies to companies or establishments where 10 or more persons are employed. Companies are required to provide gratuity to employees who complete 5 years of continuous service with the company.

Definition of Continuous Service

However, "Continuous Service" means uninterrupted service, which may be interrupted on account of sickness, accident, leave, absence from duty without being treated as a break in service, lay-off, strike, lock-out, or cessation of work not due to the fault of the employee (Sec 2A).

Conditions for Forfeiture of Gratuity

The employer can forfeit gratuity (Sec 4(6)) if an employee has been terminated for the following reasons:

(i) For any act, willful omission, or negligence causing any damage or loss to or destruction of any property belonging to the employer, to the extent of such loss or damage.

(ii) For riotous or disorderly conduct or any act of violence on the employee's part.

(iii) For any act that constitutes an offense involving moral turpitude, provided the offense has been committed by the employee in the course of his employment.

If you do not fall under the purview of these three points and you meet the eligibility criteria, you are advised to get in touch with a lawyer for assistance.

Just file an application with the controlling authority (that is, the Assistant Commissioner of Labour) of the state in which your unit/establishment is situated. Please mention in the application your date of joining (you may enclose a copy of the appointment letter also), date of relieving (attach a copy of the relieving letter), and request the authority for relief. The rest they will do. In case of failure at the ALC Office, you may approach the court of law (Labour Court).

In the calendar year, i.e., January to December, if you are present for more than 240 days, then you are eligible for gratuity. If your attendance is less than 240 days, then the employer has the right to deny the gratuity. It can be paid to the employee after the decision of the "Standing Committee" of the company.

Regards,
Rahul

You have asked a simple question—whether you are entitled to receive gratuity for the service of 6 years rendered before resignation/release.

The simple answer is—Yes. Your employer cannot deny payment of gratuity on fabricated grounds of unsatisfactory performance during the service period for which they have not charged you earlier or imposed a penalty for any misconduct, if any.

In case of denial of payment of gratuity, first of all, send your claim in the prescribed Form-I. The employer is liable to pay gratuity within 30 days of it being due, failing which interest is payable at the prescribed rate after the expiry of 30 days. For this, you may file your claim with the Controlling Authority under the PG Act, who is the ALC under whose jurisdiction your earlier establishment falls.

Hope and wish you early payment.

Regards,
AK Jain

Since your company doesn't have any separate terminal benefit scheme, naturally you are covered under the Payment of Gratuity Act, and you are eligible for the gratuity, provided you fulfill the eligibility norms under the Act. Non-performance or satisfactory performance is not at all a criterion to deny your benefits. For this act of non-performance, you have not been charged at all. It is only a frivolous charge. Please follow the method as advised by Mr. A. K. Jain; you will get your gratuity amount.

If you have completed five years of continuous service and have been relieved, you become eligible for the payment of gratuity.

Eligibility for Gratuity Payment

As per Section 7(1) of the PG Act: A person who is eligible for payment of gratuity under this Act [or any person authorized by him in writing, to act on his behalf] shall send a written application to the employer within such time and in such form under sub-rule 2 of Rule-7 as may be prescribed for payment of gratuity. The application can be made on plain paper giving relevant particulars.

The employer shall, whether an application referred to above for payment of gratuity is made or not, give notice to the persons to whom gratuity is payable, and also to the Controlling Authority specifying the amount of gratuity payable.

Steps to Take if Gratuity is Denied

If an employer refuses to receive the application or refuses to issue a notice under Rule 8, or having received an application, fails to issue notice as required under Rule 8 within the specified time, you may apply within 90 days of the occurrence of the cause. Apply in FORM-N to the controlling authority for issuing direction to the employer under subsection 4 of Section 7.

Regards,
RL Dhingra Advocate,
Labour Law Consultant, Delhi
[Phone Number Removed For Privacy Reasons] / Email: [Email Removed For Privacy Reasons]