Navigating Gratuity Claims After 15 Years of Service and a Company Transfer – What Are My Options?

I started my career in a two-wheeler automobile firm (partnership firm) and worked for 15 years under the same company. The founders closed the firm and transferred me to their different organization without taking any resignation or providing an offer letter from the new company. The only thing that changed is that I was receiving a salary from the new company's account. When I asked for gratuity, they said that since there was an organizational change, I am not eligible for gratuity. I am now 54 years old and have only been with the new organization for 4 years. What can I do to claim the gratuity?

Regards,
Vinod

Hi,

Applicability of the Gratuity Act

The Gratuity Act applies to all businesses, including partnerships, proprietorships, and limited companies. The Payment of Gratuity Act requires organizations with at least 10 employees to pay gratuity. Even if the number of employees drops below 10, the organization is still obligated to pay gratuity.

Employee Count and Gratuity Liability

So, what is the highest count of employees with the partnership firm? If gratuity is applicable, founders are liable to pay. However, if you raise litigation, your current employment may come under a cloud, so be prepared for that. You can submit Gratuity Form I, and if there is no response, you can appeal before the Assistant Commissioner of Labour of your firm's jurisdiction.

Consideration of Date of Joining (DOJ)

From another perspective, since you got transferred to the same group company (with the same management) for the purpose of gratuity, your Date of Joining (DOJ) should be considered as your initial DOJ with the partnership firm. At the time of separation from the new company, they can pay gratuity for the whole period of service, i.e., partnership firm work years + new company work years.

Mr. Vinod, are you still working with the same company or have you left? If you are still working there, there is no need to bring up the gratuity matter at this point as you are only 54 years old. You can continue in service until 58, 60, or even beyond as per your company's rules.

If you have left (resigned, been retrenched, or the contract has been terminated), then it's worth pursuing your case. It's important to ensure that there is no gap between your service in the partnership firm and your current service with this company. Continuity of employment is the criterion for determining gratuity, along with the number of employees in the company (which should be 10 or more at any time during the year).

You can reply to this post with your clarifications so that further action can be discussed.

Dear Mr. Vinod,

You can claim the gratuity from the first company where you worked for 15 years. You need to file a claim petition before the controlling authority because the entire amount is your right.

Auditors and Employee Status

Furthermore, auditors are not considered employees. However, conversely, an auditor in a company's roles is an employee. This much can be said in the absence of documentary evidence and other information. Still, you can consult a legal advisor or contact the District Labour Office with details to claim your demand.

Dear Mr. Vinod,

You can claim the gratuity from the first company where you worked for 15 years. You need to file a claim petition before the controlling authority because the entire amount is your right.

Auditors and Employment Status

Further, auditors are not considered employees. However, an auditor in a company's roles is an employee. This can be stated in the absence of documentary evidence and other information. Still, you can consult legal counsel or contact the District Labour Office with details regarding your demand. Upon the closure of the first company, you joined the new one, but your service period shall be considered from the day you joined the new company.