Dear friends,
As all of us are aware the terminal benefits include the following (other than EPF) -
1.Gratuity (in full, accrued & due)
2.Statutory bonus (if applicable, entitled to either while in service or after leaving)
3.Leave encashment (if eligible as per HR policy)
4.Retrenchment benefit (subject to service conditions and/or legally eligible)
5.Other benefits, if any
We see many of these now being quoted as part of CTC. And employees take decisions of a switch over considering the size of their CTC. To my knowledge the quantum of Gratuity more or less remain the same whether it’s nonCTC or CTC employment. It’s also true many employer even offer higher gratuity purse even beyond the statutory limits which are welcomed by employees.
Other than gratuity, many of these benefits are governed by different rules/regulations and not commonly applied.
My point here is employers’ contribution towards EPF is remitted either to the EPF Trust or to the EPFO and once remitted employees are within their right to eiter transfer or encash. And ‘gratuity’ also more or less similar payout to employers, except when comes to disbursement employees concerned who didn’t complete the qualifying service are denied. Ofcourse it’s not a violation of law.
And many courts have upheld the concept of ‘gratuity’ is not an ‘alms’ but a “reward” for the service rendered, a right of employees.
No issue every penny traced to employee is/may be part of CTC.
But the fact remains as this specific contribution for the benefit was made by the employer, like EPF, attributable to the concerned employee accounted as such and updated every year, which had a major impact in decision making of choosing the job ultimately results in a duck is a big loss/disappointment. And indeed is very harsh, if continues for the full length of one’s service, is a huge one more or less amounting in the order of 10,15,20 lakhs. And nobody can be vary of the fact that ‘gratuity’, apart from EPF, is the major source of a kitty which will be the livelihood for a retiring person to fend for him/herself for the rest of their life time. This is so especially when they have no effective pension scheme covered. That’s my point.