Gratuity not paid inspite of completing 5.7 yrs with a company

Hi everyone,

I have a situation where I was employed with a company for 4.2 years. Now, the company transferred me to their sister concern due to project issues, and I worked there for close to 1.5 years. Now I have quit the company and joined another group. However, while doing the full and final settlement, the company has not released gratuity, stating that I have not completed 5 years in a particular establishment.

Both group companies have the same holding company, but they are registered differently. Also, while generating Form 16, they have separate TANs. Can anyone please help me in this case as I am feeling perplexed about what to do in this situation?

Dear Niketan,

Inter-Company transfer of employees at the behest of employers among their group companies ("Group Company" itself is a misnomer for there is no such a term defined under the Companies Act for each and every company registered under the Act is a separate legal entity) is an issue warranting more vigilance on the part of the transferred employees. Such employees should ascertain before transfer whether they are transferred with continuity of service, pay protection, seniority, etc., and whether there is provision for such inter-company transfers in the standing orders or service regulations and whether the transfer is effected with the consent of the transferee company. If they get no answer in writing or the transfer order is devoid of such particulars, they should not accept the transfer.

In such a situation, one cannot say anything on the issue raised by you without going through the transfer orders, standing orders, or your letter of appointment issued originally by the transferor company. Still, you can do one thing. Send your notice of claim in form I to both the companies. If they fail to respond or disown the liability to gratuity on the grounds already indicated in your post, file a joint claim for gratuity against both the companies before the Controlling Authority for the area where you worked last.

Dear Colleague,

I was very well guided by our colleague Umakanthan Sir. This is a lesson on how an employer should provide clarity in the transfer letter to the employee and ensure that all benefits, including service continuity, are clearly spelled out. Employees trust the letter of the employer and work wherever they are posted, but they should receive all statutory benefits without any deprivation.

This serves as a learning opportunity for employees on how to seek clarity when such transfer letters are issued. It is important to carefully review the benefits that may be affected, the clarity provided in the transfer letter, and whether there is any mention of continuity of service despite the transfer from company A to B.

I encourage you to refer to your transfer letter and verify if there is a clause mentioning continuity of service upon transfer. If such a clause is present, you may proceed by sending your Gratuity claim notice to Company B. However, if there is no mention of continuity in the letter, please send your notice to both Company A and B jointly and raise a case before the Controlling Authority under the Payment of Gratuity Act for suitable remedy.

Take care,

Dr. P. Sivakumar
Doctor Siva Global HR
Tamil Nadu

Hi,

Thanks a lot for your help. The first company had given in writing that gratuity would be transferred to the second company. Also, the PF account number did not change during the transfer. Therefore, this case would be one of continued employment, and hence gratuity should be paid when 5 years are completed. Please provide your views on this matter.

Dear Colleague,

As per the given information, it is continuous service only. You may very well approach Company B for Gratuity. If denied, send a claim to both Company A and Company B and seek direct or legal remedy as suggested.

Take care,
Dr. P. Sivakumar
Doctor Siva Global HR
Tamil Nadu

If there is a writing from the 1st organization stating that your gratuity payment will be taken care of or paid by the 2nd company, then in my opinion, you are eligible for Gratuity. From your 1st post, it appears that the 2nd organization has refused to pay you gratuity. Please write an email to both organizations stating the fact and enclosing the letter issued by the 1st organization to pay your gratuity.

Even after the above, if gratuity is not paid, send the specific Form claiming gratuity to both organizations with a copy to the appropriate authority under the Payment of Gratuity Act to address your grievances.

S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To strive towards excellence with effort and integrity

(Note: I have corrected the spelling and grammar errors, adjusted the paragraph formatting, and maintained the original meaning and tone of the message.)