Hi,
You cannot withhold PF and employee have the option of either transfer or withdrawal through UAN Portal and as a Employer you need to approve through Employer Login.
Whether the employee sold local spares with your brand name or he/she had diverted your Client for their business.
What was the quantum of loss?
What disciplinary / legal action initiated by you as an Employer?
Any show cause notice issued to him ?
As per your statement employee has resigned. So with no proper legal documentation in place how will you justify the withhold of Gratuity if the employee approaches legal forum ?
As per Gratuity Act
"The gratuity of an employee whose services are being considered to be terminated on the accountability of an act of wilful omission/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/vandalisation so caused
The Gratuity Payable to an Employee May Be Wholly or Partially Forfeited
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
if the services of such employee have been terminated for any act which constitutes an offence involving debauchery/ turpitude/ degeneracy or lewdness, provided that the offence taken in regard has been committed during the tenure of his employment.
Pre-requisite for Forfeiture of Gratuity of an Employee by an Employer
the damages suffered by the employer should be quantified
principles of natural justice must be adhered to, and the concerned employee must be given an opportunity to being
the employer must pass an order to forfeit the gratuity, whole or partial, following law and its legal proceedings.
So without any legal proceeding it is not advisable to hold the Gratuity as the employee may file a case with Assistant Commissioner of Labour of your office jurisdiction.