Gratuity and PF Confusion: Can Employees Claim from Joining Date or Scheme Start?

Kindly, I need some information about gratuity and PF. Please help me. One of the employees' gratuity and PF have started from June 2013. However, he joined the company in 2000. Can that employee claim gratuity from the joining date or from the date the gratuity and PF scheme was introduced?

Hi Sujatha, Gratuity is applicable from the date of joining. If the company was not registered with PF at the time the employee joined, and it is effective from the date of registration with EPF.

Gratuity Eligibility and Considerations

First of all, for gratuity, 5 years of continuous service is required. If you have taken any policy (like LIC) for gratuity and you have registered that employee in June 2013, then for gratuity calculation, you have to consider June 2013 as the joining date. If you haven't taken any policy for gratuity and are managing the gratuity part at your company level, and on paper, you have a record that the concerned employee actually joined in 2000, and your management has approved this, then you can provide him/her with gratuity benefits from 2000.

Difference Between PF and Gratuity Registrations

PF and gratuity registrations are different as PF requires a minimum of 20 employees, while gratuity requires 10 employees. Therefore, there is no direct relation between gratuity and PF. Finally, if the management knows the actual date of joining of that employee and genuinely wants to provide him/her with benefits, then it can pay that amount as an incentive.

I hope this information is helpful to you.

Regards,
Mahesh

If management creates circumstances and asks an employee to resign just a few months prior to completion of the minimum period required for the maturity of gratuity, can the employee claim gratuity in such a case? If yes, how?

Management Practices and Gratuity Concerns

If management creates circumstances and asks an employee to resign just a few months prior to the completion of the minimum period required for the maturity of gratuity, this is a very wrong practice and should not happen to anyone.

In some cases, management has the right to cease gratuity for employees due to misconduct in the organization, fraud, intentional behavior against management's policies, etc.

In a situation where management is forcing an employee to leave the company before completing the gratuity eligibility period, morally, the employee has the right to ask management for the reasons behind the forced resignation. If the reason provided by management is valid, the employee can seek assistance from the labor office.

Thank you.

Gratuity Act is applicable to an establishment from the date it employs ten or more persons. Any employee who completes five years of service on that date or later is eligible for gratuity. The taking of a policy from LIC or PF registration is irrelevant.