Absconded Employees: Are They Still Eligible for Gratuity or Leave Encashment?

Can an absconded employee be eligible for gratuity or leave encashment?

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Hi there,

In cases where an employee absconds, it is essential to refer to the company's policies and local labor laws to determine their eligibility for gratuity or leave encashment. Generally, absconding refers to an employee who leaves their job without providing notice or obtaining approval.

Employers often have specific guidelines regarding the treatment of absconded employees, including whether they are entitled to certain benefits such as gratuity or leave encashment. These guidelines are typically outlined in the company's employee handbook or HR policies.

It is crucial for employers to handle absconding cases carefully and in accordance with legal regulations to ensure fair treatment of all employees and compliance with labor laws.

If you have a specific case or scenario in mind, it would be advisable to consult with HR professionals or legal experts for guidance tailored to your situation.

Best regards

If the continuous service criteria are met, gratuity will have to be paid.

In my opinion, leave encashment also will have to be paid if due after adjustment in F&F.

If you go through the Payment of Gratuity Act, it is clearly mentioned that as a rule, gratuity has to be paid if the employee has completed 5 years of continuous service. As most rules do have exceptions, so also here. You may go through Section 4 and subsection 6 to know the exception and when it is applicable. The burden is on the employer to show that the employee's act/omission falls under this exception, so the payment has been withheld. You may have to be prepared to wash the dirty linen in public, as it has to be proved with the Labor Department and the employee too will be given a chance to disprove you.

Dear Dipti,

Yes, the employee is eligible for both gratuity and leave encashment provided they comply with the norms.

Yes, he is eligible for both the gratuity and leave encashment if he continues to be in employment without any break in service. However, he is also liable for the recovery of notice pay.

Suresh

Thank you all for the kind response. Yes, we are running a private institute. We cannot put students' futures at stake by disrupting the classes.

Service Agreements

All employees are under a service agreement from:
- 01.08.2008 to 31.07.2009
- 01.08.2009 to 31.07.2010
- 01.08.2011 to 31.07.2012
- 01.08.2012 to 31.07.2013
- 13.03.2014 to 13.08.2014
- 15.11.2014 to 15.08.2015
- 01.11.2015 to 31.10.2016
- 01.12.2016 to 30.11.2017

We cannot disrupt the students' classes, so we were providing salary during the gap period without a bond. However, the employee has left the job without any notification or resignation. They have been absconding since then.

Kindly guide.

Hi Dipti, you have mentioned that you were giving a salary during the gap period. What exactly were you doing? From your post, it seems that the trainer was in your services from 1st August 2008 till 30th November 2017 but not in continued service.

01.08.2008 to 31.07.2009

01.08.2009 to 31.07.2010 (He was not there for 1 year. Had he resigned and gone? Was he offered a final settlement?)

01.08.2011 to 31.07.2012

01.08.2012 to 31.07.2013 (Again there was a gap for almost 7.5 months)

13.03.2014 to 13.08.2014 (Gap of 3 months)

15.11.2014 to 15.08.2015 (Gap of 2.5 months)

01.11.2015 to 31.10.2016

01.12.2016 to 30.11.2017

If he has not been paid any salary for the gap periods, then he is not eligible for any gratuity. He may claim continuity in services only from 13th March 2014, and thus he has not completed 5 years of continuous service.

The above statement is made based on the information submitted by you, which seems to be incomplete regarding the appointment letter, settlement of accounts, resignation, etc.

Regards, Suresh

Eligibility for Gratuity and Leave Encashment

My question is: was he paid a salary from 8/2008 to 11/2017 without a break? If so, he can be treated as having completed 5 years of continuous service. Eligibility for gratuity and leave encashment arises if the employee was paid a salary even during gap periods. However, if he is absconding, how will you get in touch with him? Probably write to his recorded permanent address and ask him to get in touch.

Exit Policy and Notice Period

What is the exit policy as per the appointment letter? How much notice was he supposed to give the organization? Any salary due can be adjusted against the notice period pay.

That's a private institute. The employee is absconding from 01 Dec. Since we cannot hamper the classes of students, we paid the old salary without the bond period as it was a mutual decision. The institute hired him as a fixed-term employee. He has not provided his resignation yet, I mean till date.

Send a letter to his registered address asking him to get in touch. The letter should be sent by registered post for proof. The institute pays salary even when classes are not in session, if I understand correctly. Ask him to report by a particular date, and if he does not report back, then steps to terminate his employment can be taken.

Three months' notice period, as per the appointment letter, is required to be served. However, he took his salary and immediately left the job without giving any prior intimation.

Sir, I am a Future Group employee. I have completed 9 years and 6 months of work, but I left the job without informing. Am I still eligible for my gratuity?

Gratuity Calculation for Absconded Employee

Our one employee served the company for more than 6 years, and he has been absconding for the last two years. Please suggest how to calculate gratuity based on 6 years or 8 years of service.

Dear Sirs,

If an employee is continuously absent from work for 2 years due to criminal cases, and after 2 years, he resumes his duty, is he eligible for gratuity for these years?

Please provide your opinion on this.

Regards

Hi, The important question here is whether the absence from duty for 2 years is an approved one or absence without information.

Section 2A of the Act

As per Section 2A of the Act, it is clear that in the event the employee is absent from duty due to sickness, accident, leave, or absence from duty without leave, he/she would be entitled to the benefit of gratuity unless the employer has passed an order treating such absence without leave as a break in service in accordance with the Standing Orders of Employment applicable to the employee.

Absconded Employee and Disciplinary Action

If the employee had absconded without information and disciplinary action is initiated, then it cannot be considered as continuous service.

Employee Resuming After Long Absence

An employee who remained absent from work for 2 years and is now being allowed to resume service is a wonder of wonders. Salute to HR and HR practices.

He will not be eligible for gratuity because the employee does not fulfill the criteria of five years of continuous service.

It's not a wonder. There are many reasons or situations involved in long absenteeism. Only knowledgeable HR and management can make this type of decision. By the way, he has been absent after completing 15+ years of service.

Thanks for the valuable inputs!

Hi, For 15 years of service, he is definitely eligible for gratuity. If, as you claim, he was involved in criminal cases, it would be better to remove the period of absence and consider the rest of the period for gratuity.

The employee is eligible for gratuity, as they have completed fifteen years of service. Furthermore, there are no allegations against the employee that would disqualify them from receiving gratuity. Absent years will not be included in the calculation.