Dear all, I have a query where i need to know the following Whether MD, Director & partners of the company are entitled for the Gratuity ? Plz reply on above Regards, Mahesh Patel
From India, Ahmadabad
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From India, Ahmadabad
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They are entiled to get gratuity provided they have been on muster rolls of the company and have been getting salary (NOT FEES) for the last 5 years. Regards, Madhu.T.K
From India, Kannur
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4526From India, Kannur
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Dear Madhu T.K.,
Thank you for your response.
I received the answer through LLR.
The definition of 'Employee' under section 2(e) of the Payment of Gratuity Act, 1972 does not specify whether a director is considered an employee. It depends on the functions or duties performed by the director. It is clarified that if a company's director is actively involved in duties and working for the company, then they fall under the definition of an 'employee' according to the act.
However, a question arises if the individual is a director for more than one company.
Mahesh Patel
From India, Ahmadabad
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Thank you for your response.
I received the answer through LLR.
The definition of 'Employee' under section 2(e) of the Payment of Gratuity Act, 1972 does not specify whether a director is considered an employee. It depends on the functions or duties performed by the director. It is clarified that if a company's director is actively involved in duties and working for the company, then they fall under the definition of an 'employee' according to the act.
However, a question arises if the individual is a director for more than one company.
Mahesh Patel
From India, Ahmadabad
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Mahesh,
It is certainly the duties and responsibilities that decide, but one more thing is that gratuity is calculated on salary and not on any fees or share of profit. If a person is employed as a director in more than one company, he will get gratuity from each company upon leaving each of the companies after 5 years of continuous service.
Regards,
Madhu.T.K
From India, Kannur
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It is certainly the duties and responsibilities that decide, but one more thing is that gratuity is calculated on salary and not on any fees or share of profit. If a person is employed as a director in more than one company, he will get gratuity from each company upon leaving each of the companies after 5 years of continuous service.
Regards,
Madhu.T.K
From India, Kannur
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