Gratuity Denied After 20 Years of Service: How Can I Respond to My Employer's Claim?

My employer denies paying gratuity, stating that the required number of employees coming under the purview of the Payment of Gratuity Act 1972 is much below the necessary threshold. I have completed 20 years of service. I submitted a form to the Labour Commissioner, but during the hearing today, my employer presented the aforementioned response to the Labour Commissioner. Although my offer letter mentioned that I would be entitled to gratuity.

Now, what should I do or reply? Kindly suggest.

Hi, if you have completed the qualifying continuous service period under the Act, then you will get a verdict in your favor. As the case is before the ACL Chamber, please wait for the final verdict.

What type of establishment did you work in - a factory, shop, or any other type of establishment? If it was a factory, mine, oilfield, or a railway company, there is no necessity for a minimum number of employees. The number comes into play when it is a shop or other type of establishment only. Even in such a case, it is sufficient that the number was 10 or more. You had a continuous service of 20 years in the establishment. Have you ever noticed when the establishment had 10 or more employees? If so, ask the CA to direct the employer to produce documents such as the attendance register and wages register of employees pertaining to that particular year. Otherwise, you have to argue your case as the liability to pay becomes a contractual obligation based on the conditions mentioned in the offer/appointment letter only.

Thank you for the advice. My previous company falls under the Shop and Establishment Act. To the best of my knowledge, it used to maintain the necessary notices and renewals. However, for the last 10 to 12 years, it has not been maintained, as far as I know. The company is involved in wholesaling Foreign Liquors across all parts of West Bengal. I am unsure whether my previous company is categorized under the Shop and Establishment Act.

Regarding the employees, they always numbered below 10 because they were divided among various non-operating companies. At any given time, the total staff count exceeded 50, including daily loaders (whose payments were settled in cash as delivery charges) and other personnel such as sales, administration, and accounts, who were divided among different companies.

While my previous employer did provide gratuity to other staff members based on their tenure of service, they recently shut down the core business due to government policies. Consequently, the employer is now refusing to pay gratuity.

Regards,
SUBRATA BHOWMIK