If we have given an appointment to the employee and we give him a salary by voucher, deducting TDS, but his name is not on our salary sheet, his PF is not deducted. Is he entitled to gratuity?
From India, Ahmedabad
From India, Ahmedabad
payment of gratuity has nothing to do with ESI or PF and even if he is paid salary by cash, if he proves that he had worked for 5 years, he should be paid gratuity. Not including his name in the salary sheet/pay roll, not paying salary through Bank or not enrolling him under ESI/PF are non compliances for which the concerned officers can take action against you. That is different issue. If your concern is payment of gratuity, I would say that an employee who has not been served with an official appointment order or a casual employee should be paid gratuity if he has worked for the required 5 years with you. It is true that he has to establish his employment with you. The onus to prove is on the employee but if he files a compliant, a good officer who is the Controlling Authority under the Payment of Gratuity Act, will certainly help the employee to get the records to prove his employment with you.
You should understand that compliance or following the law will cost you but at the same time that will free up your mind and will give you time to spend time for your other priorities of business, ie, sales and operations. Therefore, follow the compliance part and OPEN the Doors of your Office always. No need to do the business with closed doors with a fear that any time a Labour Enforcement Officer may knock the door.
From India, Kannur
4193You should understand that compliance or following the law will cost you but at the same time that will free up your mind and will give you time to spend time for your other priorities of business, ie, sales and operations. Therefore, follow the compliance part and OPEN the Doors of your Office always. No need to do the business with closed doors with a fear that any time a Labour Enforcement Officer may knock the door.
From India, Kannur
Adding to what Madhu sir has mentioned about costs .... Many companies adopt the view that Costs have to be minimised and that includes compliance costs without realizing that Cost of Non-Compliance is often much more severe that Cost of Compliance. Same for cost of Quality too.
From India, Kochi
From India, Kochi
@ madhu sir.. thanks for clarity...
have few Q
Q1
can we consider This employee as consultant as per Contract act and designate him as consultant with same payment structure (TDS deduction)
Q2.
any better way to handle it to comply as per labour law
please do guide
thanks
From India, Mumbai
have few Q
Q1
can we consider This employee as consultant as per Contract act and designate him as consultant with same payment structure (TDS deduction)
Q2.
any better way to handle it to comply as per labour law
please do guide
thanks
From India, Mumbai
A consultant is a professional whose advise is taken as and when required. He will not be attending to your office every day from 9 am to 5 pm, from Monday to Friday, but he will be making his physical presence only if it is needed. He will not follow your leave rules and will not take permission from you if he wants to absent himself from his work, even if he is given a specific work. By putting an employee as a 'consultant', therefore, you will not gain anything. There are companies who reappoint employees who have been superannuated as consultant with a consolidated salary. If his assignment is regular and if it is established that he reports to a particular officer functionally and administratively (for leave and other matters) he is an employee only. His remuneration, if coming under taxable brackets, should be subjected to tax deduction under section 192 of the Income Tax Act and not u/s 194J (as applicable to professional fees)
A consultant as per a contract above referred working in the establishment like an employee will be eligible for ESI (if coming under ESI), PF, bonus, leave with wages and other benefits. If the period of such service extends beyond five years, certainly, he should be paid gratuity also. Therefore, if the objective is to reduce costs by way of ESI, PF, Bonus etc, appointing an employee as a consultant is not at all a good option.
Now a days fixed term employment is permitted across industries and establishments which do not have certified standing orders also give FTC to employ personnel. FTC does not mean that you need not comply with the legal side but all statutory contributions and payments due to an employee should be extended to an employee on Fixed Term Contract. However, it is more flexible that it is easy to adjust the manpower with the business requirements when you have a few employees on FTC. If you lose business, you need not renew the contract and without any legal complications the employee will leave the company. This is the attraction of employing persons under FTC and is fine in the present situation where the market is very unpredictable.
From India, Kannur
A consultant as per a contract above referred working in the establishment like an employee will be eligible for ESI (if coming under ESI), PF, bonus, leave with wages and other benefits. If the period of such service extends beyond five years, certainly, he should be paid gratuity also. Therefore, if the objective is to reduce costs by way of ESI, PF, Bonus etc, appointing an employee as a consultant is not at all a good option.
Now a days fixed term employment is permitted across industries and establishments which do not have certified standing orders also give FTC to employ personnel. FTC does not mean that you need not comply with the legal side but all statutory contributions and payments due to an employee should be extended to an employee on Fixed Term Contract. However, it is more flexible that it is easy to adjust the manpower with the business requirements when you have a few employees on FTC. If you lose business, you need not renew the contract and without any legal complications the employee will leave the company. This is the attraction of employing persons under FTC and is fine in the present situation where the market is very unpredictable.
From India, Kannur
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc