Am I Eligible for Gratuity? Seeking Guidance on Application and Eligibility Dates

I submit a few lines for your kind consideration and early attention.

Background Information

I am an employee of a manpower supply agency that is in a contract with the State Government Department. I have been working in the State Government Department since November 2003 up to the present date, i.e., 18.12.2014. Since 2003, there have been changes in manpower supply agencies, and from January 2010, the same manpower supply agency has continued by renewing the contract with the State Government Department annually. My current salary is Rs. 9,500/-, and after deductions for EPF, ESI, etc., my take-home salary is Rs. 8,000/- (Rupees Eight Thousand Only).

Inquiry About Gratuity

I would like to inquire about the following:

1. Am I eligible to receive Gratuity under the Payment of Gratuity Act, 1972?
2. To whom should I submit the application form for Gratuity and from which year should I apply?
3. Where can I obtain the application form to apply for Gratuity?
4. Since which year am I eligible to receive Gratuity?
5. Approximately, how much Gratuity amount do I deserve and can claim?
6. Could you please suggest any references if someone has successfully claimed Gratuity?

Your suggestions will be invaluable to me. Kindly reply as soon as possible to the email address [Email Removed For Privacy Reasons].

With regards,

SKumar

It is difficult to give an answer when lots of information is missing. What position you hold and what work you are doing makes a difference. But most important is how the handover happened from one contractor to the other. Based on that, we can give a better answer.

Gratuity Claim Process

The gratuity is to be claimed from the establishment or employer that has employed the person. The calculation is based on the formula: (Basic + DA) / 26 * 15 * Number of years. If in a year a person has worked for more than 6 months, it may be counted as a whole year. Form I can be obtained from the office of the labor commissioner or the website and may be submitted under proper acknowledgment.

Regards

You have been working with the same Principal Employer (PE) for the past 11 years continuously but under different agencies. In my opinion, the contracts that your PE enters into with various contractors every year or periodically, while keeping the same employees throughout the years under all those contractors, can be declared as a sham.

In the case of the Supreme Court in RK Panda (1994 LLR634), it was held that the PE should absorb the Contract Laborers (CLs) engaged under different contractors with him for the past 10 years.

My advice to you is to make your case and apply for Gratuity from 2003 onwards in the prescribed form to your PE. If the PE rejects your application or does not take any action, go through the legal process. Hire a good lawyer.

Wishing you good luck.

Regards

Eligibility for Gratuity

If the service is regular with a record, i.e., with an appointment order and payment details for 5 years from the employer, you can claim gratuity. Gratuity can be claimed by submitting a simple letter to your employer stating the date of joining, date of leaving, and the last drawn salary.

Regards,
D. Gurumurthy

Neither Kumar nor Mahem has stated whether there is a termination of employment for the persons concerned as of today. Gratuity can be claimed only upon termination of employment.

Kumar's Case

In the case of Kumar, if the allegation about the change of the actual contractor is true, I would also view the arrangement as a "sham," as opined by Mr. KorGaOnkar. However, since the contract is still in the name of the initial manpower supplier, Kumar can stake his claim for gratuity against both the Principal Employer (PE) and the de jure contractor.

Gratuity and Principal Employer Responsibilities

Gratuity is not listed among the responsibilities of the principal employer in the act. What is listed are wages and statutory dues of PF and ESI. So, can he actually claim gratuity against the principal employer?

Dear Saswata ji,

What you said is correct. However, I would like to draw your kind attention to High Court Madras W.P. 6633/2008 and MP Nos. 1/2008 & 1/2009 decided on 18.07.2012: Mettur Thermal Power Station Vs. Appellate Authority - Jt. Commissioner of Labour, Coimbatore. In this case, the contractor's liability to pay gratuity is fastened on the principal employer.