Gratuity Eligibility Dilemma: How to Handle an Employer-Created Service Gap?

Dear Team, I'm here to get clarification regarding my eligibility for gratuity. I'm an Assistant Professor of English who worked for 4.8 years in the same institution. However, the employer is refusing to settle the gratuity by creating an intentional artificial gap in my service. That is, I was on a contract period from 22/07/2019 to 21/01/2020 bearing the employee ID no. AI0001712, and then they put me on a consultancy period to break my service - 22/01/2020 to 29/02/2020. I worked from 9 am to 4:45 pm, engaged in all the classes, and completed all the allotted work as usual. Finally, they gave me a new employee ID (AI001859), PF account number, and ERP credentials on 02/03/2020. Now, I have been relieved from the institution on 30/03/2024 with the same employee ID (AI001859).

The HR is convincing me that I'm not eligible for gratuity as I was not in continuous service as per the gratuity act and denied processing for the gratuity amount by showing this gap in my service. Also, he has given me two experience letters instead of one. I request your suggestions and solutions. It will be of great help to me.

The break is artificial only. The period of service as a consultant should be treated as a service period only. However, they can deny gratuity on the grounds that your service does not account for five years.

Furthermore, the interpretation of section 2A of the Payment of Gratuity Act, which supports a service of 240 days in the fifth year, shall help you to receive gratuity provided the fifth year accounts for 240 days or 190 days (if your college works for 5 days only), including paid holidays and leave days.

You must ensure that in the year 2020, during which you had a break of around 38 days, the total days in that 12 months do not fall below 240/190 days, as the case may be.

You can approach the Controlling Authority for intervention. Before doing so, please submit an official request in Form I (attached).

Thank you very much for the suggestion! Should my FTE period be considered along with the consultation period?

Fixed-Term Employment and Consultancy

Fixed-term employment is part of your service. The "consultation period" is just a technical term used, whereas you were not actually engaged as a consultant. You have to establish that during that "consultancy" period, you were following all the HR protocols with regard to office timing, holidays, taking approvals for leave, attending training, reporting, etc. Then your position will automatically become that of an employee, and the consultancy will become a designation only. Please remember that it is not a "consultant" but a Teacher (lecturer, Tutor, Professor by designation) who will teach students. A Consultant will not evaluate the answer sheets of the students. You should mention this also in your complaint.

Dear Sir,

Kindly check the 1st offer letter, TDS document, and 2nd offer letter. TDS is the only proof that I have served the same institute. I have mailed the MD to resolve the issue on 18/4/24 but received no response. Should I send Form L and a lawyer's notice to the college?

Legal Considerations Under the Gratuity Act

Under the Gratuity Act of 1972, section 9 states, 'False statement and false representation to avoid payment of Gratuity is a punishable offence.' Can I mention section 9 and 2A in the legal notice? I need your suggestion.

Timing for Legal Actions

As I mentioned earlier, my last working day was 30/3/24. Is it mandatory that my Form L and legal notice reach them within 30 days after relieving?

Thank you.

Also, the head of HR replied rudely whenever I mentioned the Gratuity law. Should I include that in the complaint too?

You may just send Form I to HR. Once they reject the claim, you can raise the matter before the Controlling Authority under the Payment of Gratuity Act, i.e., the Assistant Labour Commissioner. The employer is supposed to disburse the gratuity within 30 days of your relieving. We will wait until then, and after that, we will send a complaint in Form N in which we will narrate the facts one by one. In that, you can mention that HR used to harass you by using rude words, etc., and that could be taken as one of the reasons for the delay in submitting the complaint.

TDS Deduction Issue

The TDS made is also wrong because it is deducted as per Section 194J instead of Section 192 of the Income Tax Act. You were paid a salary. Both appointment letters clearly establish that you were offered 'employment,' not 'consultancy.' It also states that your employment is governed by the HR policies. FTE only means that you are appointed for a fixed term, which is why it is called fixed-term employment (FTE), and the TDS shows that you are paid professional charges. The percentage is a flat 10%. You have been supplied with Form 16A as opposed to Form 16. It is true that in respect of highly paid professionals, it may be acceptable because they can consider expenses like staff salaries, depreciation, etc. However, for a person who has no such arrangements, such as an office, staff, or marketing support, it is not fair.

Gratuity Claim Defense

When they reject the gratuity claim, this reason may be cited. Still, you should defend yourself by asking if there is any proof to show that you were appointed as a Consultant when the appointment order clearly states that you were appointed as an Assistant Professor.

Good evening, Sir,

I have not received my gratuity yet. I sent them Form I along with a request letter to process the delayed gratuity, and it was delivered yesterday, but they didn't even reply. I think they don't want to give the gratuity. So now, should I send a legal notice or directly complain about it to the Controlling Authority, Sir?

Filing a Complaint for Gratuity Payment

Now you can file a complaint to the Controlling Authority (under the Payment of Gratuity Act) using Form N, requesting intervention and directing the employer to pay the gratuity. If your establishment has branches in different states, the Assistant Labour Commissioner (Central) will serve as the Controlling Authority. Conversely, if your establishment does not have branches outside the state but operates as a single office or has branches solely within the state, the Officer of the labor department of the State will act as the Controlling Authority. It is advisable to attach relevant documents along with the complaint. The complaint should be submitted in duplicate, with one copy for the Controlling Authority and the other for the Respondents.