Delay In Gratuity Payment By Employeer - PDF Download

Hi,

I worked in a public limited company for a period of 12 and a half years. I resigned from the company in the month of December 2012, and till date, the company has not paid:
1. Gratuity
2. Full and final settlement, including arrears such as the notice period, etc.

The reason for the delay, as mentioned by the company, is "financial/cash flow issues."

My specific query is regarding the gratuity payment - what should be the next action, and what legal recourse is suggested?

Regards,
Neeraj

Gratuity is expected to be paid to the employee within 30 days of his leaving the service. It is mandatory even if the employee does not apply for it. In your case, it has already been a year since the amount became due. The time set for recovering gratuity from the employer with the intervention of the Controlling Authority, i.e., the Labour Officer, is 90 days which has also ended. However, if you submit to the Labour Officer that the delay was caused due to faith in the employer that they will pay it once their financial crunch is over, then the Officer can entertain your application for the recovery of gratuity. The application shall be submitted in Form N. Upon receipt of the application in Form N, the Controlling Authority (Labour Officer, Asst. Labour Commissioner, as the case may be) will issue directions to the employer to appear before him and sort out the issue.

Attached are Form I (the original one to be submitted to the employer for claiming gratuity) and Form N to be submitted to the Controlling Authority.

Regards,

Madhu.T.K

Can I apply for gratuity payment 5 years after leaving the organization? I have not received the gratuity payment yet. I did not take any action earlier. Can I fill out form I now and send?

I think you have not read what I have written. Though there is a time within which your gratuity claim should be submitted, you can still have the right to claim it if the reasons for the delay are justifiable.

In your case, if there has been no initiative from the employer to pay the gratuity, you can claim it on your own. Please note that the obligation to find out the left employee and pay the gratuity lies with the employer and not the employee. Therefore, if you state that there has been no intimation of payment of gratuity from the employer, the delay has occurred, and since the employer has failed to pay it, you are approaching the Labour department.

Madhu.T.K

You can still claim your gratuity provided you are able to explain the reason for the delay.

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You can still claim your gratuity as long as you can provide a valid explanation for the delay.

Can a contract employee claim the gratuity?

The issue of contract labor demanding gratuity is to be viewed with reference to the contract itself. If the contract is genuine, then the workers engaged through a contractor cannot claim any gratuity from the principal employer but can demand it from their employer, i.e., the contractor. But if it is a camouflage arrangement or the contract is sham, then they can claim it from the principal employer. Not only gratuity, workers engaged by such a contractor can even demand that they should be regularized as employees of the principal employer. Therefore, what is important is the genuineness of the contract.