If a worker is in service with annual contracts and retrenchment is being paid every year, will he be also eligible for Gratuity at 5 years? There had been no gaps in contracts and the contractor also is the same. Thanks and regards
From India
From India
The retrenchment compensation paid for the past year cannot be set off against gratuity. Once the employee is terminated from service and is eligible to receive gratuity, then only it is paid. Any payment made earlier while the employee continues to be in service cannot be adjusted against gratuity. Even otherwise also it is not to be adjusted, let us say that an employee with 10 years of service is suddenly terminated of service, he is to be paid retrenchment compensation and gratuity separately.
From India, Mumbai
1422From India, Mumbai
Dear Colleague,
The Word Retrenchment is something different and needs deeper understanding.
Industrial Disputes Act 1947: 2(oo) "retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include--
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
[(bb) termination of the service of the workman as a result of the non-renewal of the contract of
employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or]
(c) termination of the service of a workman on the ground of continued ill-health;]
Hence carefully adopt the word " Retrenchment" as you mentioned that it is being paid every year. The retrenchment compensation is payable upon termination of any employment as per Sec 2(oo) and not otherwise.
In case of continued contract every year and the contracts are kept on given every year to the examined properly as you mentioned " CONTRACTOR". In case of contract employees also if they completes 4 years and 240 days in the 5th year they become eligible for Gratuity.
In both cases the liability is on the Contractor hence please have a deeper understanding on this subjects as you know the facts better than us who are giving our views and then take call.
From India, Chennai
The Word Retrenchment is something different and needs deeper understanding.
Industrial Disputes Act 1947: 2(oo) "retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include--
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
[(bb) termination of the service of the workman as a result of the non-renewal of the contract of
employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or]
(c) termination of the service of a workman on the ground of continued ill-health;]
Hence carefully adopt the word " Retrenchment" as you mentioned that it is being paid every year. The retrenchment compensation is payable upon termination of any employment as per Sec 2(oo) and not otherwise.
In case of continued contract every year and the contracts are kept on given every year to the examined properly as you mentioned " CONTRACTOR". In case of contract employees also if they completes 4 years and 240 days in the 5th year they become eligible for Gratuity.
In both cases the liability is on the Contractor hence please have a deeper understanding on this subjects as you know the facts better than us who are giving our views and then take call.
From India, Chennai
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Gratuity Benefits-pOINTS TO BE NOTED.docx