Denied Gratuity After Company Transition: What Are My Options After 7 Years?

If I have worked at a company for 7 years, and the organization transitions from a partnership firm to a private limited company after 3.5 years while retaining the same management, but the company denied me gratuity, what should I do? I was working in a private limited company for only 3.5 years, but when the company transitioned from a partnership to a private limited, I didn't receive any letter regarding this, and my employee ID also did not change.

Hi, In such a scenario, the actual Date of Joining (DOJ) of the employee at the partnership firm should be taken into consideration for the purpose of gratuity calculation and not the commencement date of the private limited company. You are eligible for gratuity.

The company has refused to provide me with gratuity, stating that during my 3.5 years of employment, they transitioned from a partnership firm to a private limited company, but my total experience is 7 years. I never received any formal notification of this transition.

Steps to Take When Denied Gratuity

What steps can I take in this situation?

Understanding Liability in Company Transitions

This is a complicated question of facts and law. As per the Companies Act 2013, a company is entirely different from a partnership firm, although the persons involved in their management are the same. Legally speaking, the liability of the partnership cannot be vested in the company. It has to be critically examined from the Articles of Association and Memorandum of Association of the company as to whether there exists any provision regarding continuity of operations and liability arising therefrom, for which there is all the possibility. If there is a provision for it, then there is a possibility for upholding the gratuity claim in this regard.