Is My Brother Entitled to Gratuity After 4 Years with His Previous Company? Seeking Advice

Dear Sir,

My brother worked in a reputed company for 4 years. He then left the job and joined another company as a purchase officer. While he was working with the old company, they were deducting a certain amount as Gratuity from his monthly salary. However, after leaving the job, they denied returning the gratuity amount to my brother.

Should he be entitled to receive the amount that was deducted by the company as Gratuity? Please advise.

Thank you.

He is not entitled to gratuity as per current rules.

If the company was cutting/deducting some amount as gratuity, it was an irregular act. Was the deduction shown on the payslip?

Gratuity Entitlement and Company Practices

Legally speaking, your brother is not entitled to gratuity as per the Act since he has not completed 5 years of continuous service. However, it is a common practice in many companies to include gratuity as part of the CTC, and the company does not pay out this amount if the employee leaves before completing 5 years, citing provisions of the Act. This practice is both inappropriate and illegal on the part of the management, yet it is still being followed.

It is suggested that your brother approach the top management, present the facts regarding the CTC where gratuity has been considered a part of it, and request them to reimburse the deducted amount from his salary.

Regards, R R Kapoor
Vadodara