Am I Entitled to Gratuity After Being Asked to Resign and Join Another Company?

I've been working for an organization since 1st Aug 2016, and now they are planning to move the process along with some employees to another organization. Because of this, I have been asked to resign from the current organization and accept the offer letter from the second organization.

As I've already completed 4 years and 5 months, and the termination is being initiated by the employer, am I eligible to get gratuity? Is there a labor law that I can refer to?

Thanks in advance!

Clarification Needed for Proper Response

1. How is the move-in process being affected?
2. What did the employer write when they asked you to resign?
3. Any other communication between you and your employer.

Primarily, even if you are asked to resign, it should be considered a transfer with continuity of service, and you would be eligible for gratuity from the new employer.

Regards, S.K. Mittal

[Phone Number Removed For Privacy-Reasons]

Thank you, Shobhit, I would be doing the same work under the new employer. They have said I would receive a termination letter from my current employer and will be offered an offer letter effective from the next day by the new employer, so there won’t be any gap in my service period. There was no other communication apart from this. They are not ready to pay gratuity, nor do they say that the new employer will pay gratuity. They say this experience will not continue to be considered for gratuity. Please advise. Thanks!

Dear Amar, the entire information furnished by you regarding the proposed move of transferring a particular process/operation with the existing employees in the organization after their resignation, with the assurance of fresh appointment in another organization, should most probably be communicated by word of mouth and not by any written communication. If so, certainly, this is a sinister motive of your present organization to circumvent the provisions of section 25-FF of the Industrial Disputes Act, 1947, pertaining to compensation to workmen in case of transfer of undertakings.

The resignation from the present organization and fresh appointment in the other one, if any, based on the strength of such oral assurance, would nullify the resignees' claim for continuity of service before such resignation and any service benefit like gratuity accruing on the basis of a minimum qualifying period of service.

Therefore, do not accept the proposal and resign from your job. Unless you are formally transferred to the other organization with continuity of service and the latter's acceptance, your service in the transferred organization would be considered fresh only. When your service falls short of 4 years and 240 days in the fifth year on the very date of your resignation, you are not eligible to claim statutory gratuity from either of the organizations. It is better that all such employees jointly make a complaint to the local Deputy Labor Commissioner.

My current employer has asked me to sign a termination letter and has arranged an offer from the incoming employer. They have informed me that I will be starting fresh with the new employer.

Thank you.

So, that means there is no continuity in service, and for all intents and purposes, your employment with the new organization starts only from now. Are they allowing the transfer of leave, protection of pay, and other perks? You need to insist on the transfer of gratuity; it would be possible if there is a gratuity trust at both places.