Dear Seniors,
Today my query is regarding the payment of gratuity. One employee in our organization was initially appointed through a third-party contract for 3 years. After the completion of the contract, he was appointed on our company's fixed-term contract for 2.5 years. Subsequently, the employee resigned from his job and unfortunately passed away due to illness after resigning.
Now, his wife is claiming gratuity for the period he served in our company. Is the company responsible for the gratuity payment?
The total period of five years includes the time under the third-party contract and the company's fixed-term contract. Please provide guidance on the above issue.
With warm regards,
Sdd.
From India, Thana
Acknowledge(0)
Amend(0)
3Today my query is regarding the payment of gratuity. One employee in our organization was initially appointed through a third-party contract for 3 years. After the completion of the contract, he was appointed on our company's fixed-term contract for 2.5 years. Subsequently, the employee resigned from his job and unfortunately passed away due to illness after resigning.
Now, his wife is claiming gratuity for the period he served in our company. Is the company responsible for the gratuity payment?
The total period of five years includes the time under the third-party contract and the company's fixed-term contract. Please provide guidance on the above issue.
With warm regards,
Sdd.
From India, Thana
Acknowledge(0)Amend(0)
Gratuity Payment Obligation
The Gratuity Act states that "the completion of continuous service of five years shall not be necessary where the termination of the employment of an employee is due to death or disablement." Hence, you would have to pay gratuity to the employee even if they had not completed five years of service continuously while in your payroll. However, since you mentioned that the employee passed away after resigning, I believe you are not liable to pay gratuity.
Regards,
Aparajita
From Canada, Yellowknife
Acknowledge(0)Amend(0)
The Gratuity Act states that "the completion of continuous service of five years shall not be necessary where the termination of the employment of an employee is due to death or disablement." Hence, you would have to pay gratuity to the employee even if they had not completed five years of service continuously while in your payroll. However, since you mentioned that the employee passed away after resigning, I believe you are not liable to pay gratuity.
Regards,
Aparajita
From Canada, Yellowknife
Acknowledge(0)Amend(0)
Thank you, Aparajita. But my question is, that employee was appointed through a third-party contract for 2.5 years, and then 2 years through the company's fixed-term contract for 2.3 years. Is this period to be combined and considered as his continuous service?
Again, the employee was working in a worker category, i.e., in the production department.
Waiting for a reply.
Regards,
Sdd.
From India, Thana
Acknowledge(0)Amend(0)
Again, the employee was working in a worker category, i.e., in the production department.
Waiting for a reply.
Regards,
Sdd.
From India, Thana
Acknowledge(0)Amend(0)
When considering your company's situation, it is important to focus on the time period during which the employee was on your payroll, specifically 2.3 years. The 2.5-year period when the employee was under a third-party contract should not be included in this calculation.
Regards,
Aparajita
From Canada, Yellowknife
Acknowledge(0)Amend(0)
Regards,
Aparajita
From Canada, Yellowknife
Acknowledge(0)Amend(0)
Gratuity Payment Upon Employee's Death
The gratuity becomes payable upon the death of the employee, provided the employee is still employed by the organization. If the employee has left the organization by resigning, then in such a case, the company is not liable for gratuity payment.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
The gratuity becomes payable upon the death of the employee, provided the employee is still employed by the organization. If the employee has left the organization by resigning, then in such a case, the company is not liable for gratuity payment.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Less than 5 years service - Eligibility for payment of gratuity.pdf
Payment of Gratuity Act, 1972 & The Rules.ppt