Applicability Of Payment Of Gratuity Act To Contract Labor

Dear R.N.Khola,
Is Training period of service is count under the gratuity ??
Like Training 1 year + service 4 year = 5 year (is eligible for gratuity )
regards,
ashish

Re: Applicability of Payment of Gratuity Act to Contract Labor
Dear R.N.Khola,
Is Training period of service is count under the gratuity ??
Like Training 1 year + service 4 year = 5 year (is eligible for gratuity )
regards,
ashish

Dear Ashish,

Before giving any opinion we should go through the definition of the employee which may be read as under:
Sec 2 (e) "employee" means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.
After going through the definition it is clear that apprentice is not covered under this Act but it seems to me that we are not to consider the length of service of a trainee also if he does not do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work. If a person is appointed as trainee under the I E (S O) Act, 1946 / CSO & do some work of any of the nature as detail out above as part of the training scheme then in my opinion this period of service should not be treated as service rendered for counting the service period for payment of gratuity. In general, management after the completion of trainee period if there happens to be a vacancy then they re-employ them after clearing the F&F & adopting the procedure for interview etc. After adopting this procedure we are not to apply our mind for consideration of this service period. In this way if a person is appointed as trainee & doing any of the work as mentioned above then his service should be considered in the length of service for consideration of period of service under this Act. Rest this all depend upon the Authorities under the Act that how they interpret the matter in question but even then the situation is more favouable for a person who has worked ad trainee & is in continuity of service
Opinion/ comments submitted as requested.

Regards,
R.N.Khola

Labour Law Consultants (m)

Sir i have problem would be glad if you could help me solve is part time( permant) employee covered under the defination of empolyee u/s 2(e) payment of gratuity Act 1972. If possible please cite a supreme court judgement in the matter .
Thanks n Regards

Gratuity is payable by his employer, and in case his employer fails to do so the principle employer has to pay the Gratuity to the Conntract Labour upon completion of the contract with the contractor.
Shrikant

Respected Sir,
My name is Sunil Khandelwal. i am residing at scheme no. 78, Indore. I worked with Reliance Telecom, Indore on contract in with Balaji Group in the period - Oct-2002 to March 2009.
I am eligible for gratuity but Balaji Group denied to pay gratuity. I file the case in 2010 in labor court but decision still pending. please give me your most help full suggestions .

Respected Sir,
My name is Sunil Khandelwal. i am residing at scheme no. 78, Indore. I worked with Reliance Telecom, Indore on contract in with Balaji Group in the period - Oct-2002 to March 2009.
I am eligible for gratuity but Balaji Group denied to pay gratuity. I file the case in 2010 in labor court but decision still pending. please give me your most help full suggestions .

I am not an HR expert but my observation is whether PE has to pay Gratuity to Contract Labourers depends on the Jurisdiction...if you are in kerala or Bengal you dont have to pay if you are in TN you have to pay...and every where else you can pay or abstain from paying ..... As a lawyer I think the correct position of law is you dont have to pay

The distinction between an employer and a principal employer has not been recognized anywhere in the Payment of Gratuity Act 1972. As per Sec 2 (f)(iii) of the Act, employer means any person who has ultimate authority over the affairs of the establishment...

The Act does not define establishment and this has created some confusion........In the case of Sailen Seth vs Deputy Labour Commissioner ...Calcutta HC referred to the definition of establishment in Shops and Establishment Act and observed that ..contractor being a registered under the S and E Act...it has the responsibility to pay gratuity to its contract labourer. Similar decisions had been rendered by Kerala HC in few decisions......Contrary view has been taken by the TN HC ....by observing, gratuity is wages as per Clause 2(d) of the Payment of Wages Act .....Sec 2(d) opens with the words 'any sum which by reason of the termination of employment of the person employed is payable under any law....but since neither the gratuity act or any other law prescribes payment of gratuity to the contract labourer... it is not wages ......and more fundementally To constitute a payment under Sec 2(d) of the Payment of Wages Act, there needs to be termination of employment. There is no employer-employee relationship between the contract labourer and the principle employer even after the contract labourer stops redenring his service in the premises of the Principle Employer, he continues to be in the employment of the contractor and the contractor has the discretion of deploying him elsewhere so there is no termination of employment of a contract labourer even if he is not being deployed in the premises of the Principle Employer.

Hoping I have not confused the HR folks

Arun Sasi

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Gratuity is payable even to a causal or temporary employee.
Baban Vs The Estate Manager, Maharashtra State Farming corporation Ltd 2016, LLR 1140 (Bom. HC)

Composite claims forms have introduced by EPFO by notification on 20/02/2017. notification and forms are attached.