How Should Gratuity Be Calculated for Long-Term Onsite Employees? Seeking Advice on My Situation

I am in a complex situation where I worked for a company for 7 years in India, and then they sent me onsite for 5 years with the condition that gratuity will continue in India. They transferred my payroll to its UK branch. They kept issuing me increment letters about an increase in the basic rate in India with the condition that if I join back in India, it will be based on the increased basic.

I worked for 5 years in the UK and resigned there without returning to India. Now the company wants to give me gratuity for 12 years (7 in India and 5 for onsite deputation) with the calculation based on my basic salary from 5 years ago and not the incremented basic. They claim that since I never rejoined in India, they are using my 5-year-old basic salary. However, I believe they should have considered the payable basic, even if it was the last paid basic in the UK. (Although there is no basic component in the UK payroll, only Gross).

Regards,
Sannu

Dear Sannu, this is a typical case. You need to go into the details of what the terms and conditions were. As you have mentioned being transferred to the UK company's payroll, was it considered a new joining or a fresh joining, or was the company different (it must be different)?

It is also surprising that the company is considering 12 years, including your UK stint. Was any amount towards gratuity being deducted from your salary?

Please seek clarification on the rationale behind this and take a pragmatic view.

Shailesh Parikh
[Phone Number Removed For Privacy-Reasons]
Vadodara

Hi Sailesh,

Thanks for responding to the message. I was deputed to the UK with continuation of my employment in India. My company is considering 12 years for that. There was no amount deducted during my UK deputation for Gratuity as there is the company's deputation policy for the UK that the gratuity will continue in India along with other benefits in India like insurance for dependents, etc., for the deputed employees.

Regards,
Sannu

Hi Sannu, Greetings!! Don't worry!! It's so simple to ascertain the same. Ask your parent company to bifurcate your UK gross salary as per the HO of the Indian sub-continent salary structure. So, your last basic will be there as of today. Afterwards, you can calculate as per the stipulated standard calculation for Gratuity. Thanks & Regards