Employee transfer within group company- Compulsory documentation required to be done to ensure Gratuity benefits from date of joining at first location

Transfer of Employee and Gratuity Continuity

An employee is being transferred from one location to another within the same group organization. He is covered under the Group Gratuity Scheme from LIC. Could you please assist me with the formalities that need to be completed at the employer's/LIC end to ensure the continuity of his eligibility for Gratuity benefits from the date of his joining at the first location?

Thanks,

Rakesh Shinde

Dear Rakesh,

Despite the colloquial nomenclature of group organization or group company or commonality of ownership, each organization is an independent legal entity depending on its constitution. Therefore, when the services of the employees are transferred among the entities in the group, whether by agreement or by common standing orders, the services of the transferred employees have to be treated as continuous service from entity number one to the last, where the termination of services happens at the end.

To ensure the above position, the orders of transfers should mention the continuity of services for all employment benefits, including terminal benefits like gratuity. I have no idea about the availability of a single Gratuity Policy in respect of more than one employer getting clubbed together for this purpose. Better, you should consult your insurer in this regard.

Dear Umakanthan ji, thank you for your remarks. In this particular case, the Group Gratuity Scheme Policy differs state-wise; however, it is with the same service provider (LIC of India). I would like to request other members also to please share their experiences in similar cases.

Thanks,

Rakesh Shinde

It will be possible if the new entity has a group gratuity scheme with LIC as well. The scheme may differ, but the service provider is the same (LIC). As Mr. Umakanthan has already explained about the order of transfer, the terms and conditions are very important. It is the responsibility of the old employer to take care of the same with the new employer and to inform you about the status. It would be better to have one confirmation letter from the new employer stating the continuity of your gratuity from your actual date of joining with your old employer.

Regards, S K Bandyopadhyay

CEO - USD HR Solutions

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