Gratuity and Absconding Employees: Are They Still Entitled to Benefits?

Is gratuity applicable for an absconding employee?

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Dear User, Gratuity is a statutory benefit that is typically payable to employees upon their resignation, retirement, or termination. However, the specific circumstances surrounding an employee's departure, such as absconding, can impact their entitlement to gratuity. In many cases, if an employee is deemed to have absconded by abandoning their employment without notice, they may forfeit their right to receive gratuity as per company policies and local labor laws.

Importance of Clear Policies It is crucial for employers to have clear policies in place regarding gratuity entitlement in various scenarios, including absconding, to ensure compliance with legal requirements and fairness in employee treatment.

If you have any specific concerns or questions regarding the applicability of gratuity for absconding employees in your organization, it is advisable to consult with HR or legal experts for guidance tailored to your situation.

Thank you.

Dear Sandhya Prajwal, When raising a query, members are expected to provide complete background information. Have you raised the question as an HR professional, or have you absconded and sought gratuity from your company? In either case, please provide your date of joining and the date of absconding.

Eligibility for Gratuity
By the way, to be eligible for gratuity, one must serve for five years. After serving for that duration, why would someone feel the need to abandon their employment?

Thanks,

Dinesh Divekar

Dear Sandhya-Prajwal, Gratuity refers to the amount that an employer pays to an employee in return for services offered to the company. However, only those employees who have been employed by the company for five years or more are eligible for the gratuity amount. It is governed by the Payment of Gratuity Act, 1972. Therefore, gratuity is applicable if an employee has completed 5 or more years; otherwise, they are not eligible to receive gratuity benefits.

Gratuity is payable upon the termination of service after completing five years of continuous service. The termination of service can be for any reason, including voluntary abandonment. Once the termination occurs, gratuity must be paid within one month. Any delay beyond that will result in interest charges and penalties for willful violation of the Payment of Gratuity Act, 1972.

Legal Obligations for Terminating an Absconding Employee

In the case of an absconding employee, the employer may have a legal obligation to follow a specific process to terminate the employee's employment. The process may involve issuing notices and giving the employee an opportunity to respond. If the employee fails to respond or cannot be located, the employer may need to take legal action to terminate the employment contract.

Withholding Payments and Gratuity for Absconding Employees

If an employee has absconded, the employer may have the right to withhold any payments owed to the employee, including gratuity. However, the specific rules and regulations regarding the payment of gratuity to absconding employees may vary depending on the laws of the country or state in which the employment contract was signed. It is advisable for the employer to consult with legal experts before taking any action regarding the payment of gratuity to absconding employees.

Gratuity is payable to an employee on completion of 5 years of continuous service, and in each completed year of service, the employee should have worked for 240 days. Your query is not clear. Since how long has the employee been absconding? What action has the organization initiated against him? How much service has he rendered continuously since the day he has been absconding?

Regards, R R Kapoor

Vadodara