Am I Eligible for Gratuity After Moving from Group to Parent Company? Seeking Advice

I joined X Company on 06-09-2009 and resigned (not voluntarily) to join the Parent Company on 01-07-2012. I left the parent company on 14-03-2016. The earlier company was a group company; hence, the above decisions were made as per management's direction.

In my X (Group) Company offer letter, it clearly states that I have been posted at the parent company's location. In my Y (Group Parent Company) documentation, it is mentioned that since I was hired from the group company, the date of joining would be confirmed.

I would like to inquire about my eligibility for gratuity for the period from 06-09-2009 to 30-06-2012. If yes, please share the relevant section or reference.

Thank you.

Dear friend,

If your narration is factually correct, you are eligible for gratuity for the period from 06-09-2009 to 14-03-2016.

Clarification on "Group Company" and Gratuity Eligibility

One important correction to my previous reply due to my excess of enthusiasm caused by the usage of the term "group company" in the original post. In fact, there is no such term in a legal sense referred to as "group company" in any of the laws relating to the constitution of legal entities. Rather, it has gained currency in its colloquial usage while referring to more than one business entity owned by the same individuals or business houses with the flexibility of informal transactions among the units when situations demand.

Coming to the post again, the poster's services at X came to an end upon his resignation, whether it was voluntary or otherwise, within a period of three years. Though the actual purpose of resignation seems to be joining Y in the same group, legally it is a voluntary shift of employment from one employer to another. One of the basic parameters for gratuity under the Payment of Gratuity Act, 1972, is the completion of a certain number of years of continuous service under the same employer. If the services of the employee are transferred between the employers under an agreement, it is different. Here in this case, the resignation effective from 30-06-2012 puts an end to the services under X.

Confirmation of the services of an employee and its effective date, whether actual or notional, do not have any bearing on the right to gratuity. From the above perspective, the poster's claim for gratuity for the services rendered under X from 06-09-2009 to 30-06-2012 may not be maintainable.

Regards

There is one litmus test to determine when gratuity should start in the event of a transfer or relocation from one company to an associate company. This depends on the terms of the transfer. Some "transfers" are considered new appointments, and the employee is then deemed to have left the service of the former company. Therefore, it is essential to carefully review the terms before transitioning to another associate company.

If the continuity of the service remains, you are entitled to gratuity for the entire period (2006-2016).

Check my blog at www.labourlawhub.com

Dear Sirs,

Views of the experts are differing on the above matter; therefore, if I want to claim it, how can I proceed? Please guide.

Alternatively, it would be highly appreciated if anybody can share recent case law.

If you want to claim gratuity, you have to first apply before the company in FORM I. If the company fails to pay within a month from the receipt of such application, then you have to apply in FORM N before the controlling authority under the Payment of Gratuity Act.

Check my blog at www.labourlawhub.com