Mr.X worked in a private sector company ( A & Co Pvt Ltd) for 30 years and finally got retired from service on 30.06.2000 on attaining the age of superannuation.( ie 58 yeas) and got his terminal statutory dues like pf and gratuity settled in good time . Mr.X had received a gratuity of Rs 9 Lakhs .
My.X approached another private sector company ( B & Co Pvt Ltd) and requested for a job( on post retirement from A & Co Pvt Ltd ) whilst B & Co Pvt Ltd , acceded to his X's request and offered him employment on fixed term basis as per details below
Mr.X was given an appointment in on fixed term contract basis for a period of one year from 01.01.2001 to 31.12.2001 by means of a letter on a consolidated Basis salary of Rs 1,00,000
Mr.X was given another letter dated 31.12.2001 appointing him for yet another period of one year from 01.01.2002 ( stand alone appointment) on a consolidated basic salary of Rs 1,00,000 per month
Mr. X was given another letter dated 31.12.2002 appointing him for yet another period of one year from 01.01.2003 ( stand alone appointment) on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000 per month.
He had been given another letter dated 31.12.2003 appointing him for yet another period of one year from 01.01.2004( stand alone appointment) on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000/ per month.
Mr.X was given given another letter dated 31.12.2004 appointing him for yet another period of one year from 01.01.2005 ( stand alone appointment'on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000 / per month.
Mr.X was given another letter dated 31.12.2005 appointing him for yet another period of one year from 01.01.2006 ( satnd alone appointment) on fixed term basis contract basis a consolidated basic salary of Rs 1,00,000 / per month.
Mr.X was given given another letter dated 31.12.2006 appointing him for yet another period of one year from 01.01.2007 ( stand alone appointment)on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000 / per month
Mr.X was relieved from the services of B * Co Pvt Ltd from close of working hours on 31.12.2007 ( ie on expiry of pen year fixed terms contract ) as the company had decided not give any more extensions extension
The company had not given any break-in-service during the entire period of 7 years however with the issuance of stand alone letters of appointment ( totally 7 letters)
The following questions are raised for your answer:
Whether Mr.X is eligible for gratuity i being paid by B & Co Pvt Ltd as per payment gratuity act 1972.
Whether age and gratuity already settled consequent upon retirement in the previous company ( i.e A & Co Pvt Ltd) is a restraint for claiming gratuity in B & Co Pvt Ltd
If your answer is in the affirmative, Mr.X will be getting a gratuity of Rs 4,03,846.15 as per gratuity formula ( i.e 1,00,00/26X15X7)
please let me know further
Since Mr.X had already received a gratuity amount of Rs 9,00,00 ( Rupees Nine Lakhs only) from A & CO Pvt Ltd , whether
Mr.X could get the full gratuity ( i.e Rs 4,03,846) from B & Co pvt Ltd ) considering the position that X would be receiving a combined gratuity of Rs 13,03,846 which exceeds the ceiling of 10 Lakhs fixed under the statute ?
whether Mr.X could make a belated claim for gratuity from B & Co Pvt Ltd after a gap of 9 years " is there any deadline for gratuity claim ? please elucidate?
Thanks & regards
Senprithvib6
From India, Chennai
49My.X approached another private sector company ( B & Co Pvt Ltd) and requested for a job( on post retirement from A & Co Pvt Ltd ) whilst B & Co Pvt Ltd , acceded to his X's request and offered him employment on fixed term basis as per details below
Mr.X was given an appointment in on fixed term contract basis for a period of one year from 01.01.2001 to 31.12.2001 by means of a letter on a consolidated Basis salary of Rs 1,00,000
Mr.X was given another letter dated 31.12.2001 appointing him for yet another period of one year from 01.01.2002 ( stand alone appointment) on a consolidated basic salary of Rs 1,00,000 per month
Mr. X was given another letter dated 31.12.2002 appointing him for yet another period of one year from 01.01.2003 ( stand alone appointment) on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000 per month.
He had been given another letter dated 31.12.2003 appointing him for yet another period of one year from 01.01.2004( stand alone appointment) on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000/ per month.
Mr.X was given given another letter dated 31.12.2004 appointing him for yet another period of one year from 01.01.2005 ( stand alone appointment'on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000 / per month.
Mr.X was given another letter dated 31.12.2005 appointing him for yet another period of one year from 01.01.2006 ( satnd alone appointment) on fixed term basis contract basis a consolidated basic salary of Rs 1,00,000 / per month.
Mr.X was given given another letter dated 31.12.2006 appointing him for yet another period of one year from 01.01.2007 ( stand alone appointment)on fixed term basis contract basis on a consolidated basic salary of Rs 1,00,000 / per month
Mr.X was relieved from the services of B * Co Pvt Ltd from close of working hours on 31.12.2007 ( ie on expiry of pen year fixed terms contract ) as the company had decided not give any more extensions extension
The company had not given any break-in-service during the entire period of 7 years however with the issuance of stand alone letters of appointment ( totally 7 letters)
The following questions are raised for your answer:
Whether Mr.X is eligible for gratuity i being paid by B & Co Pvt Ltd as per payment gratuity act 1972.
Whether age and gratuity already settled consequent upon retirement in the previous company ( i.e A & Co Pvt Ltd) is a restraint for claiming gratuity in B & Co Pvt Ltd
If your answer is in the affirmative, Mr.X will be getting a gratuity of Rs 4,03,846.15 as per gratuity formula ( i.e 1,00,00/26X15X7)
please let me know further
Since Mr.X had already received a gratuity amount of Rs 9,00,00 ( Rupees Nine Lakhs only) from A & CO Pvt Ltd , whether
Mr.X could get the full gratuity ( i.e Rs 4,03,846) from B & Co pvt Ltd ) considering the position that X would be receiving a combined gratuity of Rs 13,03,846 which exceeds the ceiling of 10 Lakhs fixed under the statute ?
whether Mr.X could make a belated claim for gratuity from B & Co Pvt Ltd after a gap of 9 years " is there any deadline for gratuity claim ? please elucidate?
Thanks & regards
Senprithvib6
From India, Chennai
The whole question of the gratuity entitlement of Mr. X depends on the definition of the term 'continuous service'
[2A. Continuous service.- For the purposes of this Act,-
(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 2[***] treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
Now the question is, can it be considered as 'break in service'. Fixed tenure appointment has a built in termination of service and it has been observed every year continuously for the six years. Each appointment can be viewed as separate and independent of the previous one. That means every year there is a fresh service without consideration of the past service. The fact that the appointment was on a fixed pay of Rs. 1,00,000/- every time corroborates this point. So the conclusion can be drawn that there was no continuous service and accordingly the gratuity eligibility is not there.
The rest of the questions are academic but the position is clarified as follows:
The age and gratuity already settled, consequent upon retirement in the previous company is not a restraint for claiming gratuity in B & Co Pvt Ltd
Though Mr.X had already received a gratuity amount of Rs 9,00,00 ( Rupees Nine Lakhs only) from A & CO Pvt Ltd , yet Mr.X could get the full gratuity ( i.e Rs 4,03,846) from B & Co pvt Ltd, although X would be receiving a combined gratuity of Rs 13,03,846 which exceeds the ceiling of 10 Lakhs fixed under the statute.
Mr.X could make a belated claim for gratuity from B & Co Pvt Ltd even after a gap of 9 years . There is no deadline set for making gratuity claim as the PGA casts responsibility on the employer to pay gratuity irrespective of whether gratuity is claimed by the employee or not.
From India, Mumbai
[2A. Continuous service.- For the purposes of this Act,-
(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 2[***] treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
Now the question is, can it be considered as 'break in service'. Fixed tenure appointment has a built in termination of service and it has been observed every year continuously for the six years. Each appointment can be viewed as separate and independent of the previous one. That means every year there is a fresh service without consideration of the past service. The fact that the appointment was on a fixed pay of Rs. 1,00,000/- every time corroborates this point. So the conclusion can be drawn that there was no continuous service and accordingly the gratuity eligibility is not there.
The rest of the questions are academic but the position is clarified as follows:
The age and gratuity already settled, consequent upon retirement in the previous company is not a restraint for claiming gratuity in B & Co Pvt Ltd
Though Mr.X had already received a gratuity amount of Rs 9,00,00 ( Rupees Nine Lakhs only) from A & CO Pvt Ltd , yet Mr.X could get the full gratuity ( i.e Rs 4,03,846) from B & Co pvt Ltd, although X would be receiving a combined gratuity of Rs 13,03,846 which exceeds the ceiling of 10 Lakhs fixed under the statute.
Mr.X could make a belated claim for gratuity from B & Co Pvt Ltd even after a gap of 9 years . There is no deadline set for making gratuity claim as the PGA casts responsibility on the employer to pay gratuity irrespective of whether gratuity is claimed by the employee or not.
From India, Mumbai
Dear Senprithvi,
Gratuity is a statutory terminal benefit in the form of one-time lump sum payment to be given by an employer of an industrial establishment to which the Payment of Gratuity Act,1972 applies to his employee on termination of his/her employment on account of the reasons of resignation, retirement on reaching the age of superannuation fixed in the contract of employment, retrenchment, dismissal after rendering a continuous service of 5 years under the same employer or on account of death, disablement due to accident or disease without reference to any minimum length of service. The Payment of Gratuity Act,1972 is the complete Code in itself in this regard.
What is important is the length of continuous service under the same employer and not the nature of service like permanent, temporary, contractual, casual etc.
Since gratuity is tied up to the particular spell of continuous service rendered by the employee under the same employer, the instance of gratuity received from another employer or the same employer in respect of a spell of previous service by the employee or likely to be received in respect of any later service under another employer or the same employer under a fresh contract of employment would not have any bearing including the ceiling on the amount of gratuity receivable for every such independent spell of service.
Though there is statutory minimum age for employment, no statutory restriction on the maximum age.
Normally the employer has to arrange to pay the amount of gratuity within 30 days from the date of termination or if it is disputed by the employee, he has to deposit the amount with the Controlling Authority. Similarly if the amount is not paid within the time limit above, the employee has to file a claim before the C.A within 90 days. However, his belated claim can be accepted by the C.A after condoning such delay upon showing acceptable reasons. Since the employer has the statutory liability to pay the gratuity within 30 days it becomes payable or deposit the same with the C.A in case of failure to receive by the employee or of a dispute in this regard, any claim by the employee for gratuity can not be extinguished on the ground of delay alone.
From India, Salem
Gratuity is a statutory terminal benefit in the form of one-time lump sum payment to be given by an employer of an industrial establishment to which the Payment of Gratuity Act,1972 applies to his employee on termination of his/her employment on account of the reasons of resignation, retirement on reaching the age of superannuation fixed in the contract of employment, retrenchment, dismissal after rendering a continuous service of 5 years under the same employer or on account of death, disablement due to accident or disease without reference to any minimum length of service. The Payment of Gratuity Act,1972 is the complete Code in itself in this regard.
What is important is the length of continuous service under the same employer and not the nature of service like permanent, temporary, contractual, casual etc.
Since gratuity is tied up to the particular spell of continuous service rendered by the employee under the same employer, the instance of gratuity received from another employer or the same employer in respect of a spell of previous service by the employee or likely to be received in respect of any later service under another employer or the same employer under a fresh contract of employment would not have any bearing including the ceiling on the amount of gratuity receivable for every such independent spell of service.
Though there is statutory minimum age for employment, no statutory restriction on the maximum age.
Normally the employer has to arrange to pay the amount of gratuity within 30 days from the date of termination or if it is disputed by the employee, he has to deposit the amount with the Controlling Authority. Similarly if the amount is not paid within the time limit above, the employee has to file a claim before the C.A within 90 days. However, his belated claim can be accepted by the C.A after condoning such delay upon showing acceptable reasons. Since the employer has the statutory liability to pay the gratuity within 30 days it becomes payable or deposit the same with the C.A in case of failure to receive by the employee or of a dispute in this regard, any claim by the employee for gratuity can not be extinguished on the ground of delay alone.
From India, Salem
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