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Pavi Jana
Hi all, I would like more information about the gratuity act. One of our employees has threatened to file a lawsuit against me if I don't give a gratuity. He has worked for exactly five years, but there has been a gap period in between during the coronavirus period. When he first joined the firm, he was a trainee, and after just two years, he was on role.

Since I am a new employee, I have given a five-year relieving letter without consulting the management. I am being reprimanded by management without any thought. Does he need to be given a gratuity? How do I get out of this dilemma? My error has caused the company to face this problem as well. We have not provided any ESI or PF for him still his employee Code at Trainee only.

From India, Chennai
vmlakshminarayanan
922

Hi,

If the employee continued for 5 years then he/she is applicable for Gratuity irrespective of Trainee /on rolls. Whether ESI/PF is deducted or not is nothing to do with Gratuity.

Referring to the gap period in between during corona period as mentioned in your post what is it - the employee left without information and joined back again or you are referring to the lockdown period ?

From India, Madras
Pavi Jana
I'm referring for Lock down period, and we have not deducted any gratuity amount from his salary. I have done my formalities by giving relieving letter, is it my fault to provide relieving letter? Now i'm blamed for providing the relieving letter.
From India, Chennai
vmlakshminarayanan
922

Hi,

If the employee completes proper notice period as per the terms and conditions of employment then relieving letter should be given. It is not your fault. Even if if relieving was not provided employee have the option of appealing before Assistant Commissioner of Labour for Gratuity.

Gratuity is to be paid by the Employer which is statutory and the same should not be deducted from the salary of the employee.

From India, Madras
Pavi Jana
Since he voluntarily relieved, the management is hesitant to provide gratuity, how to handle the situation. The employee has threatened to bring a lawsuit against the company in my name. Any other way to refuse gratuity. Kindly help me to get an solution on this.
From India, Chennai
Madhu.T.K
4201

The Payment of Gratuity Act only says that if the employee has been in continuous "service" of not less than 5 years, the employer should pay gratuity. The word used is 'service' and not "employed". An employee on leave is still in service though he is not employed. During the Covid 19 period, even if he has not worked, he should be in service. You have not given him fresh Employee Number when his training period ended and he was taken as a confirmed status. This establishes that he has been in continuous service. Even otherwise, the period other than apprenticeship period ( period of training as per Apprentice Act 1961) should be considered as period of service for entitlement and calculation of gratuity.

In order to be treated as interrupted service, there should be specific communication that the period of absence should be treated as service break. If you have not given him any warning letter, not taken any disciplinary action and so, the service would become continuous and he would become eligible for gratuity. However, if he is still short of 240 days (inclusive of paid weekly off, holidays and leaves) in 12 months period, then that year shall be ignored for gratuity. at the same time, if your establishment work for less than 6 days in a week, say 5 days, then it is 190 days for every 12 months.

If the above are favourable, you may settle his gratuity.

From India, Kannur
vmlakshminarayanan
922

Hi,

I would suggest you to release the Gratuity as per the entitlement. You may educate your Management issue of relieving letter has nothing to do with Gratuity and even if relieving /experience certificate was not provided employee have the right to place appeal for Gratuity. Also for Gratuity no need to deduct money from the salary of the employee.

From India, Madras
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