Gratuity Calculation Dilemma: Should Partnership Years Count After Converting to LLP?

Gratuity applicability if a partnership firm (run for 3 years) is converted to an LLP (running for the last two years) and shifted to a new working place. There was no written understanding with employees. Should we consider the 3 years of working in the partnership while calculating Gratuity for employees leaving the LLP.

If only the form and type of organization has changed, liability for gratuity will remain. Otherwise, some wise employers may see it as a way to escape welfare liabilities.

Hi,

Payment of Gratuity should be applicable from day one as long as there are a minimum of 10 employees in the company. If the above condition is met, the gratuity period has to start from day one at a Partnership Firm. No other agreement to this effect is ever required for this Act.

Thanks and Regards

Gratuity is applicable to both types of firms (partnership firm and LLP). There is a possibility of the dissolution of employment tenure in a partnership firm without an understanding with employees.

One should check the records of the LLP to see the date (DOJ) they maintained for each employee who worked in that partnership firm.