Stuck Without Gratuity After Company Acquisition: How Can We Claim What's Owed?

Employment Transition and Gratuity Eligibility

Joining Date: 11/12/2014
Resignation Acceptance Date: 02/June/2019
Old Company Name: XXX (Pune) (Health Care SAP IT client based)
New Company Name: YYY (Navi Mumbai) (client based)

I'm working at a client location in Mumbai at Reliance Foundation Hospital. I worked in XXX Company for 4 years, 5 months, and 18 days. Suddenly, in May 2019, we received news that the company had been sold to YYY Pvt Ltd, and we were required to resign because the new company wouldn't accept us without a resignation. We were forced to resign in May 2019, but the company asked us to date the resignation for April.

The new company's HR, who has since left the organization, assured us that he would discuss the gratuity issue with the old company and resolve it. Currently, we are working at the same client location with the new company, YYY Pvt Ltd, but both the old and new companies are denying us gratuity. The old company has wound up its business in India but still exists in California. It seems they planned it this way to avoid paying us gratuity.

Are we eligible for gratuity now, and what steps can we take to obtain it?

Section 25-FF of the IDA, 1947

Section 25-FF of the IDA, 1947 lays down that in case of transfer of the ownership of an industrial undertaking by agreement or operations of any law, the employees shall be paid retrenchment compensation. If there is no specific clause about this in the transfer deed, the new employer, as successor-in-interest, would be liable to pay the same or take the previous service rendered for the purpose of continuity of service. In all probability, the employees would have no knowledge about such a specific clause nor have any access to the transfer deed.

Constructive Dismissal and Dispute Resolution

The alleged forceful and back-dated resignation amounts to "constructive dismissal" only. It is advisable to raise a collective dispute under Section 2(k) of the IDA, 1947 against both the companies.