Responsible for the losses created and my gratuity is forfeited. Is that correct?

Hi Everyone,

I worked in a private BPO company for 6 years and 8 months. I am eligible for gratuity, and I served a proper notice period of 2 months. After being relieved from the service, my company refuses to pay the gratuity. They conduct post-audits on the projects I worked on and claim that I am responsible for the errors made by my team members during my tenure.

They assert that as the manager, I am accountable for the losses incurred, and hence, my gratuity is being forfeited. Is this legally acceptable? Gratuity can only be forfeited if the employee is responsible for losses suffered by the employer and is terminated for the same reasons. However, in my case, I was not terminated but properly relieved from my duties. Can they legally forfeit my gratuity through a post-audit?

Please advise.

Hi,

As per the law, any employer can forfeit the gratuity of an employee if the employee is terminated for any act or omission or negligence causing any damage or loss to the property belonging to the employer. The forfeiture can only be to the extent of the damage or loss caused, and not beyond that.

So, does your employer have any proof that a loss is incurred due to your negligence at work? You can request gratuity in writing from your employer, and in case of no proper response, you may appeal before the Assistant Commissioner of Labor in your jurisdiction.

Yes, sir,

The company is reviewing the projects handled by my team and presenting the completed work. Even though I did not directly work on these projects, as the manager, I believe I am responsible for any losses incurred by my team members.

My question is, can they conduct a post-audit after I leave and place blame on me? Or can my gratuity be forfeited only if I am terminated due to the losses incurred?

Hi,

Yes, post-audit after relieving or errors found after relieving is normal. It depends on the gravity of the error or the volume of loss to the employer.

I will completely disagree with the contention of Mr. VM.

Gratuity is a protected payment. It cannot be forfeited or adjusted against any dues to the company. The only case where gratuity can be refused is in cases of Moral Turpitude, which is a specific type of fraudulent activity. In all other cases, the gratuity has to be paid.

You can approach the Authority Under Gratuity Act (usually the Chief Labour Commissioner of your district) and file a complaint. The officer will ensure that you are given gratuity. The so-called losses, if it is your responsibility, they will need to file a separate civil suit against you for recovery.

Gratuity of an employee could be forfeited only in terms of the provisions of Section 4(6) of the Payment of Gratuity Act, 1973.

Section 4 Payment of gratuity. (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, - (a) on his superannuation, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease:

(6) Notwithstanding anything contained in sub-section (1), - (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused. (b) the gratuity payable to an employee may be wholly or partially forfeited - (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

The provisions do not provide for forfeiture of gratuity in a case where the employee has left service. The alleged loss, if at all attributable to the employee, could only be recovered through a civil action.

The querist may take up the issue with the Controlling Authority.