Sir, i have heard that finance team is responsible to pay gratuity, then why it comes under an HR.
From India, Delhi
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1From India, Delhi
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Gratuity act is social legislation .... all social act /legislation comes under HR. Finance/accounts department responsibility to arrange respective amount and pay.
From India, undefined
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Role of HR and Finance in Gratuity Payment
Computation has to be done by the HR department, and payment has to be made by the Finance department. HR is responsible for maintaining employee details like the date of joining, pay, number of years of service, and date of leaving. This gives authenticity to the details, and Finance clears the same upon verification. As rightly suggested by Mr. R K Singh, it is a part of statutory payment relating to employee compensation benefits. HR has to calculate the same and ensure management complies with it.
From India, Hyderabad
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Computation has to be done by the HR department, and payment has to be made by the Finance department. HR is responsible for maintaining employee details like the date of joining, pay, number of years of service, and date of leaving. This gives authenticity to the details, and Finance clears the same upon verification. As rightly suggested by Mr. R K Singh, it is a part of statutory payment relating to employee compensation benefits. HR has to calculate the same and ensure management complies with it.
From India, Hyderabad
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Gratuity payment by Accounts Department: Why HR should deal with it?
=============================================
The HR Department manages the complete personal details of every employee from recruitment to separation. HR is the custodian of personal files and information, including service details like the date of joining (DOJ), date of leaving (DOL), salary details, appointment, and final settlement. The implementation of all statutory acts like PF, ESI, Bonus, Gratuity, etc., is the responsibility of HR. Therefore, HR works out the salary (based on attendance, which is an HR duty), overtime (OT), PF, ESI, Bonus, Gratuity, etc., gets it approved by management, and then sends it to the Accounts Department for payment. Accounts will cross-check with the management's approval and make the payment.
HR also has added responsibilities like controlling absenteeism, deducting for absenteeism, and taking disciplinary action, including suspending from duty, which means HR must deduct salary for suspended days. Hence, HR plays a major role in certifying payments for salary, PF, ESI, Bonus, Gratuity, etc. In many companies, HR and Accounts work as checks and balances; while HR initiates all proposals and gets them approved by management, the Accounts Department makes payments after verifying management approval.
Introduction
===========
I am an ex-AGM-HR & Adm. with 40+ years of experience in HR, IR, legal, and administration, having worked in seven manufacturing companies, including steel plants, power, chemical, electronics plants, and mines. I provide consultancy on all aspects of HR, company, mines, statutory obligations, leave, PF, ESI management (in hard/soft copy, PPT for easy presentation, understanding, and adoption).
Solutions to some personnel and administration problems
As these are important rules, you may print and read them leisurely. I hope they will be informative and useful for your personnel and administration works.
1. Dussehra, Diwali holidays - Optional holidays
==========================================
Some companies face manpower shortages during festivals like Dussehra, Diwali, etc., when 3-4 days of holidays come at a time. This problem can be reduced by providing optional holidays, i.e., Republic Day, Independence Day, Gandhi Jayanti, Karnataka Rajyotsava Day, and May Day are fixed. Whereas employees can be given the option to take festival holidays (6 as per company rule) in a staggered way, depending upon the urgency of work to be regulated by HODs. This will help in the continuous working of the companies (like manufacturing, production, etc., for uninterrupted works) and ensures minimum manpower to manage essential services like production, operations & maintenance, accounts, HR, etc., as most employees don't observe all festivals at one time. When one set of employees takes a holiday, another set can work and vice versa. Thus, HODs can plan minimum manpower for shift duty/maintain essential services by adjusting manpower to suit their needs and avoid work stoppage due to holidays (without increasing declared holidays or violating the National & Festival Holidays Act).
To control and keep track of optional holidays, you have to adopt a leave card system. Otherwise, where will you enter holidays availed by the employees, and how will you keep track to ensure that employees take only 6 out of 20 festivals? The government declared 25 holidays for 2018, including the 5 above. Though biometric and online systems exist, the leave card is useful for personnel and administration managers for various purposes. As January 2018 is fast approaching, please go through my HR systems and rules so that you can discuss adoption from the new year 2018.
2. Leave card/record (L.C) form
=============================
Some companies still use loose leave application (LA) forms to take leave every time. As LA is loose, it is difficult to check, account, store, and keep track to make monthly salary besides paper and printing cost/waste where hundreds of employees work. You can print and use the leave card (LC) record and stop using LA. LC is handy; seniors can always check and find the number of times and days leave taken to calculate monthly CL, SL, PL/EL, OH, LWOP to make salary. LC is a record and statutory and cannot be manipulated like loose LA. One card for one employee for one year. You can introduce LC from January 1, 2018. After one year, keep the old LC in the personnel file as a record to verify in the future. It is easy for personnel and administration to work out entitlement, balance leave management, and salary preparation. It is cheap and easy to maintain. Employees will know how often they are taking leave, and HOD can caution misuse/approve on a need basis. Custody is with the personnel and administration department. Each HOD should keep the LC to facilitate their employees to take leave. HR should call the LC when required to update the leave register, make salary at month-end, and in December to work out leave earned, availed, and balance, post in LC of all employees, and update the leave register.
Final settlement
As the LC is frequently checked by HRM, HODs, auditors, and employees, GM/MD can rely on LC as an accepted record to cross-check leave, DOJ, and approve final settlement, avoiding employee disputes while making the final settlement.
3. Absent notification form (A.N.F.)
===============================
Absenteeism is becoming a serious problem in some companies. The HR manager is blamed for laxity. It can be controlled by using the above form. HRM should take action against erring employees or when a HOD sends an A.N.F. to them. Proper disciplinary procedure should be followed for AOS; otherwise, the court may nullify termination as void.
=============================================
As per new PF & ESI notifications (PF Form-11 to replace earlier Form 2 & Form 13), companies have to collect and provide all employees' personal details plus their family, dependents, nominee, Aadhar, PAN card, bank details, etc., and keep them in personnel files to show officials to get benefits to employees in critical times.
1. Appointment order, which binds employer-employee relation, does not contain essential terms and conditions of service (minimum terms and conditions - 30 points). Please check the number of points in your appointment order. If not issued, please issue now to regulate/regularize the employment relation as required under labor acts.
2. Existing company application/bio-data form not providing important details of all employees, family, dependents, nominee, person to contact in emergency to update/furnish details in statutory returns to FI, LI, PFI, ESI, gratuity, HRIS, etc. (My new bio-data form will help collect all such information, 50 points. Some companies adopted them as their company application had less than 20 points. Please check the number of points in your company application form).
3. Personal information change notification (P.I.C.N.) form
=================================================
Where company application/biodata was already collected while joining, subsequent changes in personal information should be collected from all employees using the P.I.C.N. form. However, many personnel and administration managers don’t have this form and face problems collecting/giving personal details to GM/MD, government officers, etc., as the following current information is missing:
1. No present address to send notice to X,
2. Mobile number changed and unable to contact X,
3. No nominee's details or details of a person to contact in an emergency to notify an accident, etc.,
4. No nominee's details to send payment of deceased X,
5. No details of marriage/family, children, dependents,
6. No details of Aadhar, PAN card for PF, ESI, I.Tax, etc.,
7. No details of latest additional qualifications, etc., to review career growth, special increment, etc.
As the above information has changed after joining/giving the first bio-data, and if personal information has not been collected for 3-4 years, please make all employees fill and submit P.I.C.N. now so that you will have all employees' details in one form (instead of piecemeal) to update statutory returns, PF, ESI, HRIS, personnel files, etc. My new P.I.C.N. form will help you collect all such information in one form.
I have developed 100+ important HR systems and rules with my experience in seven different manufacturing and mining companies in Bellary, Chitradurga, Bengaluru, Chennai, Hyderabad, and as Secretary for ISO Certification. You may adopt them to improve your personnel and administration works, preserve them as statutory records to comply with labor acts, and reduce legal costs. I can provide soft and hard copies of basic rules, forms to professionally manage all personnel and administration works, and procedures for adopting:
- PA, OD, OP, GP, VP, TA, LTA, Resignation, Exit Interview, Clearance Certificate, F & F.S.
- Short & long leave rules, register, PL rules - encash, application form, MB rules, application form, company off rules + register, application form, clubbing, W-Off., L.W.O.P.
- S.O. certification procedures, letters/forms to labor commissioner, list of duties, misconducts, essential services, all service rules, forms, bonds, deeds, contracts, agreements, etc.
Provided to group companies to set up HR departments where no personnel and administration department, personnel files existed, no company application, appointment order, S.O., leave and service rules, ISO forms existed to regularize services of employees working for many years. Most companies hire experts to train existing officers to improve the working of the company's most valuable asset: the human resources and to solve HR problems.
=================
Thanks. Please discuss with your concerned and reply to share more or recommend to your friends in other companies by forwarding this mail.
With kind regards,
C. Neyimkhan, HR & Management Consultant & Advocate, (Ex-AGM-HR & A) 40 years of experience.
[Phone Number Removed For Privacy-Reasons]
[Email Removed For Privacy Reasons]
# ISR-CHITWADGI P.O. 583 211, HOSPET, BENGALURU
Ex-Member, NIPM, Calcutta, Ex-Tr.-Member, IIM, Bengaluru.
Languages known: Kannada, Tamil, Telugu, Malayalam + Hindi & English
From India, Mumbai
Acknowledge(1)Amend(0)
=============================================
The HR Department manages the complete personal details of every employee from recruitment to separation. HR is the custodian of personal files and information, including service details like the date of joining (DOJ), date of leaving (DOL), salary details, appointment, and final settlement. The implementation of all statutory acts like PF, ESI, Bonus, Gratuity, etc., is the responsibility of HR. Therefore, HR works out the salary (based on attendance, which is an HR duty), overtime (OT), PF, ESI, Bonus, Gratuity, etc., gets it approved by management, and then sends it to the Accounts Department for payment. Accounts will cross-check with the management's approval and make the payment.
HR also has added responsibilities like controlling absenteeism, deducting for absenteeism, and taking disciplinary action, including suspending from duty, which means HR must deduct salary for suspended days. Hence, HR plays a major role in certifying payments for salary, PF, ESI, Bonus, Gratuity, etc. In many companies, HR and Accounts work as checks and balances; while HR initiates all proposals and gets them approved by management, the Accounts Department makes payments after verifying management approval.
Introduction
===========
I am an ex-AGM-HR & Adm. with 40+ years of experience in HR, IR, legal, and administration, having worked in seven manufacturing companies, including steel plants, power, chemical, electronics plants, and mines. I provide consultancy on all aspects of HR, company, mines, statutory obligations, leave, PF, ESI management (in hard/soft copy, PPT for easy presentation, understanding, and adoption).
Solutions to some personnel and administration problems
As these are important rules, you may print and read them leisurely. I hope they will be informative and useful for your personnel and administration works.
1. Dussehra, Diwali holidays - Optional holidays
==========================================
Some companies face manpower shortages during festivals like Dussehra, Diwali, etc., when 3-4 days of holidays come at a time. This problem can be reduced by providing optional holidays, i.e., Republic Day, Independence Day, Gandhi Jayanti, Karnataka Rajyotsava Day, and May Day are fixed. Whereas employees can be given the option to take festival holidays (6 as per company rule) in a staggered way, depending upon the urgency of work to be regulated by HODs. This will help in the continuous working of the companies (like manufacturing, production, etc., for uninterrupted works) and ensures minimum manpower to manage essential services like production, operations & maintenance, accounts, HR, etc., as most employees don't observe all festivals at one time. When one set of employees takes a holiday, another set can work and vice versa. Thus, HODs can plan minimum manpower for shift duty/maintain essential services by adjusting manpower to suit their needs and avoid work stoppage due to holidays (without increasing declared holidays or violating the National & Festival Holidays Act).
To control and keep track of optional holidays, you have to adopt a leave card system. Otherwise, where will you enter holidays availed by the employees, and how will you keep track to ensure that employees take only 6 out of 20 festivals? The government declared 25 holidays for 2018, including the 5 above. Though biometric and online systems exist, the leave card is useful for personnel and administration managers for various purposes. As January 2018 is fast approaching, please go through my HR systems and rules so that you can discuss adoption from the new year 2018.
2. Leave card/record (L.C) form
=============================
Some companies still use loose leave application (LA) forms to take leave every time. As LA is loose, it is difficult to check, account, store, and keep track to make monthly salary besides paper and printing cost/waste where hundreds of employees work. You can print and use the leave card (LC) record and stop using LA. LC is handy; seniors can always check and find the number of times and days leave taken to calculate monthly CL, SL, PL/EL, OH, LWOP to make salary. LC is a record and statutory and cannot be manipulated like loose LA. One card for one employee for one year. You can introduce LC from January 1, 2018. After one year, keep the old LC in the personnel file as a record to verify in the future. It is easy for personnel and administration to work out entitlement, balance leave management, and salary preparation. It is cheap and easy to maintain. Employees will know how often they are taking leave, and HOD can caution misuse/approve on a need basis. Custody is with the personnel and administration department. Each HOD should keep the LC to facilitate their employees to take leave. HR should call the LC when required to update the leave register, make salary at month-end, and in December to work out leave earned, availed, and balance, post in LC of all employees, and update the leave register.
Final settlement
As the LC is frequently checked by HRM, HODs, auditors, and employees, GM/MD can rely on LC as an accepted record to cross-check leave, DOJ, and approve final settlement, avoiding employee disputes while making the final settlement.
3. Absent notification form (A.N.F.)
===============================
Absenteeism is becoming a serious problem in some companies. The HR manager is blamed for laxity. It can be controlled by using the above form. HRM should take action against erring employees or when a HOD sends an A.N.F. to them. Proper disciplinary procedure should be followed for AOS; otherwise, the court may nullify termination as void.
=============================================
As per new PF & ESI notifications (PF Form-11 to replace earlier Form 2 & Form 13), companies have to collect and provide all employees' personal details plus their family, dependents, nominee, Aadhar, PAN card, bank details, etc., and keep them in personnel files to show officials to get benefits to employees in critical times.
1. Appointment order, which binds employer-employee relation, does not contain essential terms and conditions of service (minimum terms and conditions - 30 points). Please check the number of points in your appointment order. If not issued, please issue now to regulate/regularize the employment relation as required under labor acts.
2. Existing company application/bio-data form not providing important details of all employees, family, dependents, nominee, person to contact in emergency to update/furnish details in statutory returns to FI, LI, PFI, ESI, gratuity, HRIS, etc. (My new bio-data form will help collect all such information, 50 points. Some companies adopted them as their company application had less than 20 points. Please check the number of points in your company application form).
3. Personal information change notification (P.I.C.N.) form
=================================================
Where company application/biodata was already collected while joining, subsequent changes in personal information should be collected from all employees using the P.I.C.N. form. However, many personnel and administration managers don’t have this form and face problems collecting/giving personal details to GM/MD, government officers, etc., as the following current information is missing:
1. No present address to send notice to X,
2. Mobile number changed and unable to contact X,
3. No nominee's details or details of a person to contact in an emergency to notify an accident, etc.,
4. No nominee's details to send payment of deceased X,
5. No details of marriage/family, children, dependents,
6. No details of Aadhar, PAN card for PF, ESI, I.Tax, etc.,
7. No details of latest additional qualifications, etc., to review career growth, special increment, etc.
As the above information has changed after joining/giving the first bio-data, and if personal information has not been collected for 3-4 years, please make all employees fill and submit P.I.C.N. now so that you will have all employees' details in one form (instead of piecemeal) to update statutory returns, PF, ESI, HRIS, personnel files, etc. My new P.I.C.N. form will help you collect all such information in one form.
I have developed 100+ important HR systems and rules with my experience in seven different manufacturing and mining companies in Bellary, Chitradurga, Bengaluru, Chennai, Hyderabad, and as Secretary for ISO Certification. You may adopt them to improve your personnel and administration works, preserve them as statutory records to comply with labor acts, and reduce legal costs. I can provide soft and hard copies of basic rules, forms to professionally manage all personnel and administration works, and procedures for adopting:
- PA, OD, OP, GP, VP, TA, LTA, Resignation, Exit Interview, Clearance Certificate, F & F.S.
- Short & long leave rules, register, PL rules - encash, application form, MB rules, application form, company off rules + register, application form, clubbing, W-Off., L.W.O.P.
- S.O. certification procedures, letters/forms to labor commissioner, list of duties, misconducts, essential services, all service rules, forms, bonds, deeds, contracts, agreements, etc.
Provided to group companies to set up HR departments where no personnel and administration department, personnel files existed, no company application, appointment order, S.O., leave and service rules, ISO forms existed to regularize services of employees working for many years. Most companies hire experts to train existing officers to improve the working of the company's most valuable asset: the human resources and to solve HR problems.
=================
Thanks. Please discuss with your concerned and reply to share more or recommend to your friends in other companies by forwarding this mail.
With kind regards,
C. Neyimkhan, HR & Management Consultant & Advocate, (Ex-AGM-HR & A) 40 years of experience.
[Phone Number Removed For Privacy-Reasons]
[Email Removed For Privacy Reasons]
# ISR-CHITWADGI P.O. 583 211, HOSPET, BENGALURU
Ex-Member, NIPM, Calcutta, Ex-Tr.-Member, IIM, Bengaluru.
Languages known: Kannada, Tamil, Telugu, Malayalam + Hindi & English
From India, Mumbai
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HR Manual (Employee Hand Book).doc