Seeking Advice: Can I Still Claim Gratuity After 11 Years and Should I Involve Labor Authorities?

Sir, I worked for an IT multinational corporation until November 2008. I was with the same company for eleven years, spanning both the US and India. In India, I am eligible to claim gratuity for a continuous working period of 4 years and 10 months. During the recession in 2008, I was asked to submit a resignation letter so that I could receive payment for the 3-month notice period along with an ex-gratia amount. In my final statement upon relieving, it was mentioned that the payment in lieu of the notice period and the ex-gratia amount were shown and paid to me separately. If the gratuity payment had been included in the account final statement, I would have been eligible for a tax rebate as per the provisions of the income tax laws.

It has been almost 11 years now, and during a recent tax audit, I discovered that my offer letter had included gratuity in my Cost to Company (CTC) as per the Gratuity Act of 1972. However, I have not received any gratuity payment to date, and I was not even aware of it. Recently, I submitted a letter to the company inquiring about the gratuity payment, but I have not received any response. Even after one month, when I submitted FORM-I along with a copy of the offer letter and relieving statement requesting the release of gratuity as per the offer letter, there has been no response from the company's side.

Upon researching through various sites and court orders, I have found that it is the responsibility of the employer to make the gratuity payment or provide a valid reason for denial within the specified period.

Could you please advise me on whether this case holds merit, and should I approach the Deputy Commissioner of Labor with all the details for further assistance?

You may send a letter to the company by registered post acknowledgment due, stating that you are eligible for gratuity payment as per PGA, 1972, and that the same should be paid immediately. Failing to do so, you have no other option but to approach the CA (Controlling Authority) under PGA, 1972. Give your ex-employer 21 days' time, and then proceed.

The rules suggest that once an employee becomes eligible to receive gratuity, they can apply within 30 days from the date it becomes payable. However, for valid and justifiable reasons, the controlling authority under the Payment of Gratuity Act (PGA) can entertain an application for gratuity even after a few years, condoning the delay in the submission of the gratuity application.

Steps to Apply for Gratuity

As a prelude to this exercise, you need to write a formal letter to your employer along with Form I (See Sub-rule (1) of Rule 7) - Application of gratuity by an employee, mentioning, among other details, the following:

- Address in full
- Post held and name of the Office
- Date of appointment
- Date and cause of termination of service
- Amount of gratuity claimed

Action in Case of Non-Response

In the event of a reply negating your claim or the employer failing to respond to your claim within a reasonable period, say 15 days, you may submit a representation to the controlling authority in the prescribed Form (Form-N) under PGA for initiating necessary proceedings.

All the best,

Regards

Thank you for the suggestions. I submitted Form-N to ALC along with complete paperwork. However, now the respondent has come back stating that the gratuity was included in the ex-gratia payment that was paid in the F&F settlement. It seems that the respondent is now trying to adjust the ex-gratia paid to me, which also included the gratuity payment. I'm not convinced based on the original discussion and F&F settlement that took place. I shall wait for the ALC hearing and present the facts of the case to see what happens. Thanks for the suggestion.

Regards, Manjunatha

Dear Manjunatha, the amount not settled as gratuity under the Payment of Gratuity (POG) Act means you have a claim against your employer for this. Your company cannot settle your gratuity payment in any other account, such as Ex-gratia. The Ex-gratia payment you received is a voluntary payment from your employer. It is important for you to take this stand and make your representation.

Thank you.