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Hi,
Gratuity Forfeiture Conditions
Gratuity can be forfeited partially or fully only on the following grounds:
The gratuity of an employee whose services are being considered for termination due to an act of willful omission or negligence causing damage, loss, or destruction of property belonging to the employer shall be forfeited to the extent of the damage or loss caused.
From India, Madras
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Gratuity Forfeiture Conditions
Gratuity can be forfeited partially or fully only on the following grounds:
The gratuity of an employee whose services are being considered for termination due to an act of willful omission or negligence causing damage, loss, or destruction of property belonging to the employer shall be forfeited to the extent of the damage or loss caused.
From India, Madras
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Since any amount due from an employee would cause a loss to the company and cannot be recovered once the employee is relieved, you can issue an order to recover the same from the gratuity amount payable following the usual procedures. This includes issuing a show cause notice asking the employee to explain why the amount due could not be recovered from gratuity. If the employee gives consent to the employer to deduct the amount payable from the gratuity, the employer can proceed accordingly. However, unilateral deduction is not permitted and would be against section 4(6)(a) of the Act.
From India, Kannur
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From India, Kannur
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Dear Colleague,
Forfeit does not mean adjustment
In a very recent judgment, an employee took a loan from the petitioner Bank by executing a loan agreement with a clause that the loan amount can be adjusted against the gratuity amount. He was discharged from the services due to disciplinary proceedings. His gratuity was adjusted against the loan amount. He claimed gratuity by filing an application before the controlling authority. His application was allowed. An appeal was filed against the order of the controlling authority, but it was dismissed. The Bank filed a writ before the Allahabad HC. It was held that the amount of gratuity has been adjusted towards the housing loan. It has neither been forfeited nor withheld. Adjustment can be made against the loan if the loan agreement so provides. It is not barred by the provisions of Section 4(6) of the Payment of Gratuity Act, 1972. State Bank of Bikaner & Jaipur Vs Appellate Authority & Others, 2013 LLR 637 (Allahabad HC).
From India, Delhi
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Forfeit does not mean adjustment
In a very recent judgment, an employee took a loan from the petitioner Bank by executing a loan agreement with a clause that the loan amount can be adjusted against the gratuity amount. He was discharged from the services due to disciplinary proceedings. His gratuity was adjusted against the loan amount. He claimed gratuity by filing an application before the controlling authority. His application was allowed. An appeal was filed against the order of the controlling authority, but it was dismissed. The Bank filed a writ before the Allahabad HC. It was held that the amount of gratuity has been adjusted towards the housing loan. It has neither been forfeited nor withheld. Adjustment can be made against the loan if the loan agreement so provides. It is not barred by the provisions of Section 4(6) of the Payment of Gratuity Act, 1972. State Bank of Bikaner & Jaipur Vs Appellate Authority & Others, 2013 LLR 637 (Allahabad HC).
From India, Delhi
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SBT Vs Asst. Labour Commissioner- Gratuity dismissed employee-LTS.PD F
FORM I(Application for Gratuity by an employee).doc