Addressing Delay in Gratuity Claim Processing and Employer Responsibilities

Hi all,

I worked with a company for 5 years 2 months, and my last working day was 19th Dec 2014. I have applied for Gratuity Claim and am still waiting to receive the claim amount. I was informed by my former HR that they have processed my Gratuity Claim to LIC, and the delay is on LIC's end, not the company's. For the past 3 months, I have been in touch with this HR person, urging her to resolve the matter for me, but I have not received any updates yet. Is there a way I can file a complaint about this? Or is there a way to expedite the processing of the Gratuity claim amount? Please advise.

With Warm Regards,
Vinay

Dear Vinay,

It is an employer's liability to pay the gratuity within one month of submitting the gratuity claim form. They cannot delay it due to LIC not being paid or for any other reason. I believe LIC will only pay the gratuity if an employee dies while on duty. Therefore, I think it is a waste of time to wait for LIC to pay the employee's gratuity.

You can send another letter immediately along with a copy of the gratuity claim form that you have previously submitted, requesting settlement within 14 days of receiving this letter. Otherwise, you may be forced to proceed through legal channels. If they have not settled it within that timeframe, file a complaint with the Deputy Commissioner of Labour in your area. They will recover the amount from the employer with interest and pay it to you.

Thanks and all the best.

Dear Mr. Vinay, I appreciate your answer. But "...........only when an employee died while on duty." seems not true if the organisation has opted for the Gratuity Scheme Policy of LICI.

Dear Vinay,

Some companies have a scheme with LIC where they pay insurance to LIC, and in turn, LIC pays the eligible employee. However, LIC cannot take four months for payment. Ask your employer for proof that they have submitted your claim request to LIC. If they do not share that with you, you can escalate the matter.

Employers must pay gratuity to eligible employees within 30 days of a written application. So, write an application to them through registered AD.

Company should have paid you without any delay.

You may submit Form I to the employer under acknowledgment with a copy to the Controlling Authority, under acknowledgment at your location, which may be ALC. You may write to LIC and obtain in writing the status of disbursement to the company or peruse the RTI route. If you submitted notice of resignation, say of a month, you have notified your last day in office/effective date of resignation/date of retirement to the employer, and the employer should have paid gratuity on the last day in the office or computed it in the FNF statement and paid with FNF settlement, along with superannuation payment if your company had any superannuation scheme as well. The employer can make the payment of superannuation on the date of retirement as described in standing orders or before. You could have stated in the notice of resignation to disburse gratuity and superannuation on the last day in the office and could have submitted Form I a month before the last day in the office.

Dear Vinay,

The company should have paid you without any delay. You may submit Form 1 to the employer with an acknowledgment copy to the Controlling Authority at your location, which may be ALC. Write to LIC to obtain in writing the status of disbursement to the company or pursue the RTI route.

If you submitted a notice of resignation, say, for a month, you have notified your last day in the office, effective date of resignation, or date of retirement to the employer. The employer should have paid gratuity on the last day in the office or computed it in the FNF statement and paid via FNF settlement, along with superannuation payment if your company had any superannuation scheme. The employer can make the payment of superannuation on the date of retirement as described in the standing orders or before.

You could have stated in the notice of resignation to disburse gratuity and superannuation on the last day in the office and could have submitted Form I a month before the last day in the office.

Company should have paid you without any delay.

You may submit Form 1 to the employer under acknowledgment with a copy to the Controlling Authority, under acknowledgment at your location, which may be ALC. You may write to LIC and obtain in writing the status of disbursement to the company or peruse the RTI route. If you submitted a notice of resignation, say of a month, you have notified your last day in the office/effective date of resignation/date of retirement to the employer, and the employer should have paid gratuity on the last day in the office or computed it in the FNF statement and paid with the FNF settlement, along with superannuation payment if your company had any superannuation scheme as well. The employer can make the payment of superannuation on the date of retirement as described in standing orders or before. You could have stated in the notice of resignation to disburse gratuity and superannuation on the last day in the office and could have submitted Form I a month before the last day in the office.

Dear Vinay,

Please inform your employer that you are eligible to receive the Gratuity amount within 30 days from the date of your release/submission of Form 1, whichever is earlier. If not, then request a 10% interest as a fine on the gratuity amount.

Kindly submit an application to the Labour Commissioner of your area and provide him with the necessary details. This action will prompt both LIC and your organization to promptly pay the gratuity amount.

Regards,
Pranab Chakraborty
9404384433

Dear Vinay,

My experience is that LIC takes a maximum of 3 working days, from the date of receipt of the claim form duly completed in all respects, to settle the Gratuity Claim. Please check whether the HR Office has actually submitted Form 1 to the LIC office. If the LIC office is far away, you can talk to them over the phone or depute a local person from the LIC office location.

Madan

Dear all,

Please guide me. I was working with The Times of India as a 3rd party employee through Lobo Staffing Solutions. I worked at Times from 21st May 2009 to 31st May 2014. I resigned on 31st May, and they paid me PF, but I am still waiting for my gratuity. When I contacted Lobo Staffing, they mentioned that they have sent the application to Times, but Times is delaying the process. Upon contacting Times, they informed me that it would take an additional 3 months. It has been over a year now, and they have not yet paid the gratuity. Please guide me on what to do.

Thanks and regards,
Mayur Panchmukh

Subject: Complaint Regarding Delay in Gratuity Payment

Dear Labour Commissioner,

I am writing to bring to your attention an issue regarding the delayed payment of gratuity in our region. As per regulations, there is a stipulated time limit of 30 days from the date of application within which gratuity should be disbursed to eligible employees. However, we have experienced significant delays in receiving these payments, causing undue financial strain on the affected individuals.

It is worth noting that the Life Insurance Corporation (LIC) has been efficient in processing payments promptly, provided the necessary arrangements have been made with them. Therefore, the delay seems to stem from internal processes within the office responsible for gratuity disbursements.

I kindly request your immediate intervention to address this matter and ensure that the rightful gratuity payments are made within the designated time frame. Timely disbursement of gratuity is crucial for the financial well-being of employees post-retirement, and any delays only serve to exacerbate their concerns.

Thank you for your attention to this pressing issue. I trust that prompt action will be taken to rectify the situation and prevent future delays in gratuity payments.

Sincerely,

[Your Name]
[Your Position]
[Company Name]

Dear Mayur ji,

You are requested to go through the link provided below, which will be useful to you: https://www.google.com/url?q=https:/...y1rwdRTpLJ45Zg

Please also note that according to the 1987 amendment, if the amount of gratuity due to any person is not paid by the employer within 30 days, the employer is required to pay simple interest until the date of payment. The Central Government has fixed the rate of simple interest at 10% per annum.

In the case of Ramakant Manjrekar Vs. NTC Ltd. 2004 III CLR 626 (MUM HC), it was held that the petitioner is entitled to simple interest at the rate of 10% per annum.

I believe in providing correct answers to the point rather than increasing the number of posts.

Dear sir,

Under normal circumstances, if the company does not provide you with your gratuity for more than two years, this is in spite of continuous reminders. How much damages can be claimed?

I am sorry I have not gone through your research section as I am in a great hurry. Pardon me.

Dear sir,

Under normal circumstances, if the company does not provide you with your gratuity for more than two years, this is in spite of continuous reminders. How much damages can be claimed? I have worked with them for about 10 years.

I am sorry I have not gone through your research section as I am in a great hurry. Pardon me for the direct approach.

First of all, it is the employer's responsibility to pay gratuity to the employee within 30 days of the employee leaving if the employee is eligible for gratuity. If not, then the employee should claim the same from the employer within a reasonable period. It is important to note that the Limitation Act does not apply to gratuity. Many high courts have clarified that there is no limitation for claiming gratuity by an employee as it is the employer's responsibility to give notice to the employee mentioning the amount of gratuity and pay within 30 days. BHL follows this term by claiming gratuity within the stipulated time for the employee.

Regards,
Anju Gupta
Bajaj Healthcare Ltd.