Am I Really Ineligible for Gratuity After 9 Years of Service? Seeking Advice

I joined a private company on March 31, 2006, and resigned on August 31, 2015. When I asked for gratuity, the management informed me that I am not enrolled in the PF & ESI, and therefore, not eligible for gratuity. Is this correct? If I am eligible, what amount can I expect to receive considering my last salary was Rs. 15,000.00? Please assist me.

Kannan

Hi,

It is immaterial whether you were in PF or ESI or not. The Gratuity Act states that if an employee has completed 5 years of continuous service, he/she is eligible for gratuity, and there are no other conditions. Therefore, you will be eligible for gratuity. However, I cannot determine your gratuity amount because gratuity is calculated based on BASIC + DA, not the entire salary amount.

Gratuity Calculation: Last Drawn Basic + DA / 26 days * 15 days * Number of years of service.

With Regards,

Mr. Thumbs Up

Dear Kannan,

Sh. Kumaran has very rightly mentioned that there is no requirement of PF & ESI membership to become entitled to the payment of gratuity. As per Section 4 of the Payment of Gratuity Act, 1972, a person who resigns after completing FIVE years is eligible for the payment of gratuity. The formula for calculation has been provided by Sh. Kumaran; you can accordingly calculate the same.

BS Kalsi

Thank you to Mr. Kumaran and B.S. Kalsi for your guidance.

Sir,

Please let me know if they are denied. To whom should I approach for assistance - the labor commissioner, civil court, or any other authority?

Kannan

Hi,

Please visit the nearby regional labor office and submit your grievances in writing to the Assistant Labor Commissioner. Then, follow up on it continuously.

With Regards,
Mr. Thumbs Up

Dear Kannan,

Payment of Gratuity Rules

The Payment of Gratuity Rules clearly state that an employee who is eligible for payment of gratuity shall apply, ordinarily within thirty days from the date the gratuity became payable, in Form 'I' to the employer. Within fifteen days of receiving an application, the employer shall:

(i) Verify the claim for the payment of gratuity, and if found admissible upon verification, issue a notice in Form 'L' to the applicant employee specifying the amount of gratuity payable and fixing a date for payment within thirty days after the date of receipt of the application.

(ii) If the claim for gratuity is not found admissible, issue a notice in Form 'M' to the applicant employee specifying the reasons why the claim for gratuity is not considered admissible. In either case, a copy of the notice shall be endorsed to the controlling authority.

If an employer refuses to accept or entertain an application filed by an employee, the claimant employee may apply in Form 'N' to the controlling authority for issuing directions for the payment of gratuity within ninety days of the refusal or non-entertainment of the application submitted by an employee.

Form 'I' is attached herewith for your necessary action.

Regards,
BS Kalsi