I have received my Resignation Acceptance, Full and Final Statement (no dues) and Experience Letter from my previous Employer in India. I was relived from my services and now after 2 months I received an e-mail from Payroll team that they have paid me excess gratuity due to some computation error and asking me to return the money as soon as possible and in case I do not obey then they will take legal action. Amount is approximately 50k (Indian Rupees). Do they really have right to recover this money which they paid because of their system problem and can they threat me like this. I worked with company for 10 years 5 months and 21 days and they paid for 11 years in their calculations.
From Austria, Vienna
2From Austria, Vienna
Hi,
First please check with them what was the error. If really calculation was occurred and if they had paid you excess money then you are bound to return back the excess money to your ex-employer. However in case of wrong calculation of Gratuity you can fight back.
From India, Madras
First please check with them what was the error. If really calculation was occurred and if they had paid you excess money then you are bound to return back the excess money to your ex-employer. However in case of wrong calculation of Gratuity you can fight back.
From India, Madras
According to my opinion, company can not take a legal action for recovery of dues - which may be resultant action due to their own wrong computation.
The Gratuity amount paid to you for the services rendered by you with your company in India, was not the result of any fraud or any other mal practice. At the time of receiving money,you were not knowing that the amount was in excess of your entitlement.
.
In this connection I am attaching herewith a Judgement by Gujarat High Court - about a similar case like yours.
From India, Aizawl
The Gratuity amount paid to you for the services rendered by you with your company in India, was not the result of any fraud or any other mal practice. At the time of receiving money,you were not knowing that the amount was in excess of your entitlement.
.
In this connection I am attaching herewith a Judgement by Gujarat High Court - about a similar case like yours.
From India, Aizawl
As per the PGA 1972, you are entitled to gratuity limited to 10 years of continuous service as you are falling short of the 11th year of service by about 11 days. So the employer seeking return of the excess paid on this account is justified unless there is a specific provision to the contrary in the Gratuity Rules of your establishment.
There is no provision in the Act regarding recovery of excess amount paid as gratuity. Use of any legal means to recover the amount is time-consuming and uncertain. However, the question remains whether it is morally and ethically correct to retain a wrongly paid amount.
From India, Mumbai
There is no provision in the Act regarding recovery of excess amount paid as gratuity. Use of any legal means to recover the amount is time-consuming and uncertain. However, the question remains whether it is morally and ethically correct to retain a wrongly paid amount.
From India, Mumbai
gratuity payment
while working out gratuity entitlement
Pl see the number of months in the last year of employment, anything above 6 months is rounded off to the next number while anything below 6 months in the last year of employment is rounded off to the previous lower number.
Here in your case, you fall shor to 6 months by a few days, hence 10 year period was to be used for working out your entitlement.I would advice please return the excess amount.
You will be setting highest standards by not taking advantage of an inadvertent error on part of ex compnay.
From India, Pune
while working out gratuity entitlement
Pl see the number of months in the last year of employment, anything above 6 months is rounded off to the next number while anything below 6 months in the last year of employment is rounded off to the previous lower number.
Here in your case, you fall shor to 6 months by a few days, hence 10 year period was to be used for working out your entitlement.I would advice please return the excess amount.
You will be setting highest standards by not taking advantage of an inadvertent error on part of ex compnay.
From India, Pune
From your own message you have not completed either 11 years in full or 10 years and more than 6 months to compute and consider it as 11 years. Because if the person worked in excess of 6 months is to be considered as one year and added to the full years of service.
Please be gracious to return the money without any demur. But seek the old calculations if you have already signed with parallelly between the company, gratuity trustees and employee. Then get a proper letter addressed to you informing you the error in calculation of a year which by virtue of less than 6 (six months) is not to be added but erroneously added in calculation by a year.
By acknowledging the letter to the company, demand from them for the actual calculation that is entitled to you and your revised rectification of error and revised Final Settlement of Gratuity entitled to you Rs.0000000.00 less already paid on dated by cheque/transfer or other mode with date of payment Rs.00000000000, the amount due or paid in excess. Then a written demand down below for the refund of excess amount to the company.
Here you have to check all the calculations except the no of years are in order, and there is no circumventing the rules and try to make you pay back differently.
Official proof of refund of the amount is absolutely necessary to be obtained by the gratuity treasurer.
Normally Gratuity will be paid from the Gratuity Fund account and not from the Company's official account.
Therefore care is to be taken to get the Gratuity Fund account is confirming you the return and refund of excess by you.
Some times when an employee resigns and they have to settle the Gratuity from the Gratuity Fund. But as the year has not ended to provide and transfer funds, and secondly all the funds are invested as per criteria there may be no liquidity in the Gratuity Fund Bank Account. Then either the company transfer the equal amount to the Fund account thereby the Gratuity Fund settle the account directly, OR the Gratuity Fund is worked out by the Gratuity Fund Trustees and under their letter head they will workout the amount due to the employee. Then down below the settlement of amount due to the Employee is mentioned the method by the company's bank account and full settlement.
Because every year actuarial valuation is done by providing a long list of employees in the company every year. The details Date of Joining, present Salary/Wages, Date of Birth of the Employee is provided to the Actuarial Valuer at the year end. He prepares the list and provision required for each employee is mentioned and total liability of the company as on that year end.
Then the Company deduct the amount in the Fund after payout of to the employees. Reconciliation is done as to Opening Balance, add amount received from the company. Total Rs. 000000 deduct amount settled to employee by payment. The net fund amount is further reconciled by mentioning all the invested amount and accrued interest, interest received, current bank balance. Then this is compared again the Actuarial Valuer report. The short fall is provided by the Company and taken into account in the P/L & B/S.
Please do accordingly. Because there is always E.&.O.E in everything so better settle the liability.
From Saudi Arabia
Please be gracious to return the money without any demur. But seek the old calculations if you have already signed with parallelly between the company, gratuity trustees and employee. Then get a proper letter addressed to you informing you the error in calculation of a year which by virtue of less than 6 (six months) is not to be added but erroneously added in calculation by a year.
By acknowledging the letter to the company, demand from them for the actual calculation that is entitled to you and your revised rectification of error and revised Final Settlement of Gratuity entitled to you Rs.0000000.00 less already paid on dated by cheque/transfer or other mode with date of payment Rs.00000000000, the amount due or paid in excess. Then a written demand down below for the refund of excess amount to the company.
Here you have to check all the calculations except the no of years are in order, and there is no circumventing the rules and try to make you pay back differently.
Official proof of refund of the amount is absolutely necessary to be obtained by the gratuity treasurer.
Normally Gratuity will be paid from the Gratuity Fund account and not from the Company's official account.
Therefore care is to be taken to get the Gratuity Fund account is confirming you the return and refund of excess by you.
Some times when an employee resigns and they have to settle the Gratuity from the Gratuity Fund. But as the year has not ended to provide and transfer funds, and secondly all the funds are invested as per criteria there may be no liquidity in the Gratuity Fund Bank Account. Then either the company transfer the equal amount to the Fund account thereby the Gratuity Fund settle the account directly, OR the Gratuity Fund is worked out by the Gratuity Fund Trustees and under their letter head they will workout the amount due to the employee. Then down below the settlement of amount due to the Employee is mentioned the method by the company's bank account and full settlement.
Because every year actuarial valuation is done by providing a long list of employees in the company every year. The details Date of Joining, present Salary/Wages, Date of Birth of the Employee is provided to the Actuarial Valuer at the year end. He prepares the list and provision required for each employee is mentioned and total liability of the company as on that year end.
Then the Company deduct the amount in the Fund after payout of to the employees. Reconciliation is done as to Opening Balance, add amount received from the company. Total Rs. 000000 deduct amount settled to employee by payment. The net fund amount is further reconciled by mentioning all the invested amount and accrued interest, interest received, current bank balance. Then this is compared again the Actuarial Valuer report. The short fall is provided by the Company and taken into account in the P/L & B/S.
Please do accordingly. Because there is always E.&.O.E in everything so better settle the liability.
From Saudi Arabia
The employee should return back the extra amount received on account of wrong calculation or any commission of mistakes. The employee and employer can take legal course for anything less received or excess paid by the either party.
The employer is free to take legal action to recover excess money paid due to the system problem.
From India, Mumbai
The employer is free to take legal action to recover excess money paid due to the system problem.
From India, Mumbai
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Gratuity Form T- recovery.pdf