I joined my company as a full time Consultant from Feb 2021 to Oct 2021 and was converted to a full time employee from Nov 1st 2021. Now my role has been impacted and last official working day will be on 20th Feb 2026. My tenure is exactly 5 years if we include my period as a Consultant. I requested the HR for the release of Gratuity for the "continuous service" within the same legal entity, function and team. However, the argument from HR is that I am not eligible for the Gratuity as they cannot consider the tenure period when I was a consultant. He pointed out as I was sending invoices as a consultant to the company for my salary, it is considered not as under the Company's payroll. However, TDS @10% was deducted by the company during my tenure as a Consultant. Can I claim for my gratuity and what are my options.
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The eligibility for gratuity in your case is a bit complex due to your transition from a consultant to a full-time employee.
Generally, under the Payment of Gratuity Act, 1972, an employee is eligible for gratuity after five years of continuous service. However, the term 'continuous service' is usually interpreted as being on the payroll of the company.
In your case, as a consultant, you were not technically on the company's payroll even though TDS was deducted. This might be the reason HR is not considering that period towards your gratuity eligibility.
However, considering you were working full-time and your role did not change significantly when you became an employee, you might have a case. Here's what you can do:
1. Consult a labor law expert: It would be beneficial to get professional advice on this matter. A labor law expert can help you understand your rights better and guide you on the best course of action.
2. Communicate with HR: Try to have a detailed discussion with your HR department. Explain your situation and ask them to reconsider their decision. They might be able to provide more clarity on their policies and how they interpret the law.
3. Legal recourse: If all else fails, you may consider taking legal action. However, this should be your last resort as it can be time-consuming and costly.
Remember, laws and company policies can vary, and interpretations can differ. Therefore, it's crucial to get professional advice to understand your specific situation better.
From India, Gurugram
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112Generally, under the Payment of Gratuity Act, 1972, an employee is eligible for gratuity after five years of continuous service. However, the term 'continuous service' is usually interpreted as being on the payroll of the company.
In your case, as a consultant, you were not technically on the company's payroll even though TDS was deducted. This might be the reason HR is not considering that period towards your gratuity eligibility.
However, considering you were working full-time and your role did not change significantly when you became an employee, you might have a case. Here's what you can do:
1. Consult a labor law expert: It would be beneficial to get professional advice on this matter. A labor law expert can help you understand your rights better and guide you on the best course of action.
2. Communicate with HR: Try to have a detailed discussion with your HR department. Explain your situation and ask them to reconsider their decision. They might be able to provide more clarity on their policies and how they interpret the law.
3. Legal recourse: If all else fails, you may consider taking legal action. However, this should be your last resort as it can be time-consuming and costly.
Remember, laws and company policies can vary, and interpretations can differ. Therefore, it's crucial to get professional advice to understand your specific situation better.
From India, Gurugram
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Dear Member,
In our opinion, if you have been working with the company as full time consultant for eight hours working & on the rolls of the company & getting salary from the employer then this period should be treated as period for getting gratuity. Now as you have been sending invoices as consultant against your consultancy charges you are not to be considered as employee but as you are saying that you are claiming your salary against invoices then situation become confusing in the eyes of law. For getting salary we are not to send any invoices to the company. Chances of getting gratuity are very low.
R N KHOLA
From India, Delhi
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In our opinion, if you have been working with the company as full time consultant for eight hours working & on the rolls of the company & getting salary from the employer then this period should be treated as period for getting gratuity. Now as you have been sending invoices as consultant against your consultancy charges you are not to be considered as employee but as you are saying that you are claiming your salary against invoices then situation become confusing in the eyes of law. For getting salary we are not to send any invoices to the company. Chances of getting gratuity are very low.
R N KHOLA
From India, Delhi
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In my knowledge and understanding, the crucial issue is whether you were, during the period of so-called consultant, had been on "contract of service" or 'contract for service". Facts posted suggest the latter scenario. As such, the period you had served as the consultant is to be counted towards qualifying period for grant of gratuity.
From India, Kochi
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From India, Kochi
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(Fact Checked)-Your understanding is correct. The distinction between "contract of service" and "contract for service" is key in determining eligibility for gratuity. (1 Acknowledge point)
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc
CiteHR.AI
(Fact Checked)-Your understanding is mostly correct. However, the determination of gratuity eligibility can be complex and may require legal advice. (1 Acknowledge point)