Dear All,
How Can I Claim Gratuity Amount?
I had served in a private limited organization in the Industrial Area of Chandigarh for more than 11 years with zero benefits (no PF/Leave encashment/bonus/no increment for the last 3 years). In addition to this, I received an appointment letter by email (no hard copy).
I resigned from that organization on the 6th of May with a notice period of 30 days (from 6th April to 6th May). Now, I want to claim the Gratuity amount. Please specify if I am eligible to claim that benefit.
About the Company
The registered office is in Chandigarh with approximately 8-10 staff members and a manufacturing unit in Baddi with more than 40 employees.
Please guide accordingly on the procedure of filing and the required days.
Thank you.
From India, Chandigarh
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How Can I Claim Gratuity Amount?
I had served in a private limited organization in the Industrial Area of Chandigarh for more than 11 years with zero benefits (no PF/Leave encashment/bonus/no increment for the last 3 years). In addition to this, I received an appointment letter by email (no hard copy).
I resigned from that organization on the 6th of May with a notice period of 30 days (from 6th April to 6th May). Now, I want to claim the Gratuity amount. Please specify if I am eligible to claim that benefit.
About the Company
The registered office is in Chandigarh with approximately 8-10 staff members and a manufacturing unit in Baddi with more than 40 employees.
Please guide accordingly on the procedure of filing and the required days.
Thank you.
From India, Chandigarh
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Gratuity Eligibility and Application Process
Gratuity is applicable to any factory, shop, and establishment where 10 or more employees are employed on any day of the preceding 12 months. Any employee (other than an apprentice) who is employed on wages and has rendered continuous service for not less than five years is eligible (in the case of death or disablement, continuous service shall not be applicable). Since you have been employed there for about 11 years, you are certainly eligible for gratuity. You may apply using Form No. I for gratuity. If your employer does not show any interest, you may consult the Labour Commissioner for assistance.
Thanks,
S. Kumar
From India, New Delhi
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6Gratuity is applicable to any factory, shop, and establishment where 10 or more employees are employed on any day of the preceding 12 months. Any employee (other than an apprentice) who is employed on wages and has rendered continuous service for not less than five years is eligible (in the case of death or disablement, continuous service shall not be applicable). Since you have been employed there for about 11 years, you are certainly eligible for gratuity. You may apply using Form No. I for gratuity. If your employer does not show any interest, you may consult the Labour Commissioner for assistance.
Thanks,
S. Kumar
From India, New Delhi
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Application of the Payment of Gratuity Act 1972
The Payment of Gratuity Act 1972 applies to:
(a) ...
(b) ...
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months...
Presuming that the Chandigarh Office had 10 or more employees, the Act would apply. The employer is required to pay you gratuity; you are not required to take any action for this as per the Payment of Gratuity Act 1972. If they do not pay you, you can send a letter demanding its payment and endorse a copy thereof to the Labour Department (The Controlling authority as per PGA). It is surprising as to how the employer could successfully evade PF all along for more than 11 years.
From India, Mumbai
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The Payment of Gratuity Act 1972 applies to:
(a) ...
(b) ...
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months...
Presuming that the Chandigarh Office had 10 or more employees, the Act would apply. The employer is required to pay you gratuity; you are not required to take any action for this as per the Payment of Gratuity Act 1972. If they do not pay you, you can send a letter demanding its payment and endorse a copy thereof to the Labour Department (The Controlling authority as per PGA). It is surprising as to how the employer could successfully evade PF all along for more than 11 years.
From India, Mumbai
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Notice of Claim for Gratuity
First, the poster has to send a notice of claim for gratuity in the prescribed format to the employer by registered post.
Filing a Claim with the Controlling Authority
Secondly, if no reply is received from the employer, or the claim is rejected for any reason, or the amount of gratuity mentioned in the reply is disputable on grounds like last drawn salary, length of qualifying service, etc., the poster should file his claim for gratuity with the copy of the claim submitted to the employer, his acknowledgment, reply if any received, etc., to the Controlling Authority for the area where he worked last.
Formats and Rules
The formats of the forms mentioned above should be as per the Central or State Gratuity Rules as applicable to the establishment.
Other Grievances
Other grievances like non-inclusion in EPF, non-payment of bonus, leave encashment, non-sanction of increments, etc., have to be dealt with separately.
Engaging Legal Services
Ideally, the poster should engage the services of an advocate.
From India, Salem
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First, the poster has to send a notice of claim for gratuity in the prescribed format to the employer by registered post.
Filing a Claim with the Controlling Authority
Secondly, if no reply is received from the employer, or the claim is rejected for any reason, or the amount of gratuity mentioned in the reply is disputable on grounds like last drawn salary, length of qualifying service, etc., the poster should file his claim for gratuity with the copy of the claim submitted to the employer, his acknowledgment, reply if any received, etc., to the Controlling Authority for the area where he worked last.
Formats and Rules
The formats of the forms mentioned above should be as per the Central or State Gratuity Rules as applicable to the establishment.
Other Grievances
Other grievances like non-inclusion in EPF, non-payment of bonus, leave encashment, non-sanction of increments, etc., have to be dealt with separately.
Engaging Legal Services
Ideally, the poster should engage the services of an advocate.
From India, Salem
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Interesting point here.
The office where he is working has fewer than 10 employees (as it appears from the post above). In that case, will the employer be free to deny gratuity to him, even though the establishment in total has more than 10 employees?
Because the section says "Establishment," not company.
From India, Mumbai
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The office where he is working has fewer than 10 employees (as it appears from the post above). In that case, will the employer be free to deny gratuity to him, even though the establishment in total has more than 10 employees?
Because the section says "Establishment," not company.
From India, Mumbai
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Yes, Mr. Saswata, I noticed and observed.
But on the same point, a member has mentioned "mfg. unit in Baddi with more than 40+ employees." This indicates that the total number of the establishment is more than 10, meaning the establishment is covered under the POG Act, 1972.
Because the establishment is controlling the manufacturing unit (being HO/Corporate Office) and the revenue source is the same, hence I assumed both are with the same name. Otherwise, what is the earning source for the establishment where 8-10 people are working?
Dear Mr. Pharmadesigner,
Before experts give different opinions, please clarify some basic doubts.
1. Whether both establishments are working with the same name or a different name.
2. Even if they are working with a different name, please confirm whether at any point in time there were 10 or more employees engaged in your company. If this is proved, your establishment is still liable to pay Gratuity.
3. Whether, as per the Act, your establishment has paid Gratuity to any previous employee?
Hope the answers to the above doubts will have a major impact on the opinions.
From India, Delhi
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But on the same point, a member has mentioned "mfg. unit in Baddi with more than 40+ employees." This indicates that the total number of the establishment is more than 10, meaning the establishment is covered under the POG Act, 1972.
Because the establishment is controlling the manufacturing unit (being HO/Corporate Office) and the revenue source is the same, hence I assumed both are with the same name. Otherwise, what is the earning source for the establishment where 8-10 people are working?
Dear Mr. Pharmadesigner,
Before experts give different opinions, please clarify some basic doubts.
1. Whether both establishments are working with the same name or a different name.
2. Even if they are working with a different name, please confirm whether at any point in time there were 10 or more employees engaged in your company. If this is proved, your establishment is still liable to pay Gratuity.
3. Whether, as per the Act, your establishment has paid Gratuity to any previous employee?
Hope the answers to the above doubts will have a major impact on the opinions.
From India, Delhi
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Dear Saswata, I fully agree with Umakanthan, sir.
Legal entity considerations for establishments
The legal entity of any establishment can't be treated as "separate" merely on the basis of establishing different units/offices at different places/states for different work. If the legal status and other registrations of all branches/offices are operating with the same name, then employees of all places would be counted as single establishment employees.
Accordingly, Gratuity will also be equally applicable for all.
From India, Delhi
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Legal entity considerations for establishments
The legal entity of any establishment can't be treated as "separate" merely on the basis of establishing different units/offices at different places/states for different work. If the legal status and other registrations of all branches/offices are operating with the same name, then employees of all places would be counted as single establishment employees.
Accordingly, Gratuity will also be equally applicable for all.
From India, Delhi
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Thank you Umakanthan sir for the clarification. Would you by any chance know of any court cases on this matter?
From India, Mumbai
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From India, Mumbai
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In the post, it is mentioned that the company has another unit in Baddi with 20+ employees, but at the present location, it did not exceed 10. It is assumed that the company has escaped the Shop and Establishment Act for the branch, but how can they escape the ESIC and EPF, which become applicable at 10 and 20 manpower strength? These two acts cover all the units under the same management or, to be precise, under the same PAN card automatically.
Now, coming to the working area, why are the employees denied PF/ESI benefits when they know that the manpower is more than the applicable limit? Was this not discussed in past years?
Either there are two separate units by constitution, or the company is using some franchise unit for manufacturing activity.
Now, to claim the benefits of gratuity, the employee has to make sure that his establishment is covered or coverable under the Shops and Establishment Act and has had more than 10 employees in the past year(s).
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Now, coming to the working area, why are the employees denied PF/ESI benefits when they know that the manpower is more than the applicable limit? Was this not discussed in past years?
Either there are two separate units by constitution, or the company is using some franchise unit for manufacturing activity.
Now, to claim the benefits of gratuity, the employee has to make sure that his establishment is covered or coverable under the Shops and Establishment Act and has had more than 10 employees in the past year(s).
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I'm looking for other options for obtaining an experience/service letter that I received yesterday, which mentioned both the address of the Registered office (Chandigarh) and the Manufacturing Unit (Baddi). I think it will work.
I also want to know the maximum time limit to apply for gratuity.
From India, Chandigarh
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I also want to know the maximum time limit to apply for gratuity.
From India, Chandigarh
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Address on Letterhead and Ownership
Having an address on the letterhead does not confirm ownership. Many companies with registered offices in India print their overseas address or liaison office address, but it cannot prove that the unit belongs to the Indian employer.
Also, on the websites of many companies, we find multiple addresses, almost in every state, but this also does not confirm that the individuals serving or working there fulfill the criteria of being an "employee" for the parent company.
Discuss the issue with the management/HR of your establishment. Clear your doubts through discussion first, and if the facts align, they will surely guide you on how to claim the benefit.
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Having an address on the letterhead does not confirm ownership. Many companies with registered offices in India print their overseas address or liaison office address, but it cannot prove that the unit belongs to the Indian employer.
Also, on the websites of many companies, we find multiple addresses, almost in every state, but this also does not confirm that the individuals serving or working there fulfill the criteria of being an "employee" for the parent company.
Discuss the issue with the management/HR of your establishment. Clear your doubts through discussion first, and if the facts align, they will surely guide you on how to claim the benefit.
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