Is It Too Late for My Colleague to Claim Gratuity from LIC? Seeking Advice on Company Policy

Hi seniors, one of my colleagues retired in April 2014 after working for more than 10 years, but unfortunately, his gratuity claim was not processed during that time. Now, he is claiming his gratuity, but the company has informed him that since his claim was not submitted within the specified period, his gratuity will not be available from LIC. The company has a Group Gratuity Scheme with LIC, and his name was removed from the last yearly list of employees submitted to LIC, leading to the late information.

My question is whether the company's stance is accurate. If it is true, is there any solution to ensure he receives his gratuity from LIC?

Thank you.

Understanding Employer Obligations Under the Payment of Gratuity Act

Sec. 7(2) of the Payment of Gratuity Act, 1972 clearly states that the employer must determine the amount of gratuity payable even if no notice of claim is made by the employee and send a notice to the employee, with a copy to the Controlling Authority under the Act. Section 7(3) of the Act requires the employer to arrange to pay the amount of gratuity within 30 days when it becomes payable.

Since your colleague retired in April 2014, it is the employer's responsibility to arrange for the disbursement of the gratuity amount from the insurer directly or through themselves within 30 days from the actual date of retirement. If the insurer is unable to pay the gratuity due to non-remittance of the premium, it is the employer's duty to make the payment with interest for the delay under Section 4A(5).

Therefore, the contention of the management is totally wrong and untenable. Let your friend file a claim against both the employer and the LIC with the assistance of an advocate.

Regards

Employer is expected to make payment within 30 days of retirement.

Do not worry, the employer will have to pay the gratuity amount.

You have to fight. Write and keep reminding, collect denials also from your employer, and build up a case to file a claim of gratuity.

Regds,
RDS Yadav
Labour Law Advisor

Filing a Gratuity Claim After Retirement

Your friend retired in April 2014, and now in June 2016, he wants to file a claim for gratuity. To proceed with this, you will first need to make a separate delay condonation application to the Controlling Authority under the Payment of Gratuity Act (PGA). This application should state the reasons for the delay. Along with the delay condonation application, you will also need to file your gratuity claim with interest from the due date.

Both the delay application and the gratuity claim should be made against both the employer and the GG Insurance Company. In other words, both parties should be included in the proceedings.

It is advisable to file your claim as early as possible since any undue delay in claiming can further delay the matter.

Thank you.

Gratuity Claim Process

You can claim gratuity using FORM I after your last working day with the employer. If they do not pay, you must claim the gratuity using FORM N within three months before the Controlling Authority under the Act. If this time period is exceeded, you will need to file a separate petition for delay condonation while filing FORM N. Gratuity can be withheld only if the employee's service is terminated on grounds related to moral turpitude.

Please follow the procedure below to apply for gratuity. You do not have to worry about the LIC part.