If an employee works for a particular company of a group for 8 years and then after the complete shutdown of that company, he joins another company under the same group for which he worked earlier and works for 4 years. Please let me know if he is eligible for gratuity in the second company as he has worked in the earlier sister concern for 8 years, or if he does not fulfill the eligibility criteria for gratuity. If the employer wants to pay him gratuity money, then how will it be calculated, and after paying before 4 years in the present company, will the employer break the rule of gratuity?
From India
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From India
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There is no such classification of companies incorporated under the Companies Act, 1956 or Act of 2013, such as group company, sister company, etc. These are common or colloquial names used only informally within the circles. Every company incorporated under the Act is a distinct and separate legal entity unless there is a common balance sheet with reciprocity of operations.
Therefore, it is for the employees whose services are shuffled among such "group companies" or "sister concerns" to be aware of the subsistence of any contract facilitating inter-company transfers and whether such contract has provisions for transfer with continuity of previous service rendered in the transferor company and the liability to pay the whole terminal benefits by the transferee company.
From India, Salem
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6108Therefore, it is for the employees whose services are shuffled among such "group companies" or "sister concerns" to be aware of the subsistence of any contract facilitating inter-company transfers and whether such contract has provisions for transfer with continuity of previous service rendered in the transferor company and the liability to pay the whole terminal benefits by the transferee company.
From India, Salem
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Less than 5 years service - Eligibility for payment of gratuity.pdf
Company Profile - Service Segment.doc