Employee Not Collecting His Gratuity Cheque - How To Proceed?

Dear Seniors,

We have dismissed an employee on the grounds of habitual absenteeism. He has collected his notice pay salary but refuses to receive his gratuity payment. We have intimated to collect his gratuity cheque through RPAD, but he never turned up. Please suggest to us how to proceed further in this case.

Regards,

Madhan S.

Since you have intimated the employee through RPAD to collect the cheque for gratuity, you have fulfilled your obligation to a great extent. However, as an abundance of caution, you may also send the cheque to his address under RPAD too.

Dear Madan,

As per the Act, you can deposit the gratuity amount with the controlling authority appointed under this Act, which is normally declared by way of a notification in the Official Gazette. You can find details and a draft for the application in the bare Act. The acknowledgment of such a deposit will safeguard your interest as an employer in case of any legal suits made for the non-payment of gratuity.

Thank you.

Fully agree with Shailendra Deshpande. You can deposit the cheque with the competent authority as per the Act.

Dear All,

Thank you all for your valuable inputs.

Regards,
Madhan S.

Hi friends,

May I know who is the competent authority to determine the Gratuity amount in this case? Is it the Labour Department?

Regards,
Mahesh

So far, in most cases, Deputy Labour Commissioner of your area, please get this examined and arrange to deposit the Gratuity Cheque.

Regards,

Dear all,

It is true that the unpaid gratuity is surrendered to the designated Controlling Authority of the area under the Payment of Gratuity Act. However, in this case, the query, [Login to view], has not attempted to send the payable gratuity to the recipient through a cheque or demand draft. They have only informed to collect the cheque.

If the amount sent through demand draft or cheque under registered cover is received undelivered, only then should it be surrendered to the Controlling Authority.

Dear Madhan,

Please prepare his full and final settlement of accounts. Send a copy to his residential address along with a covering letter and a photocopy of the cheque by Registered Post with Acknowledgment Copy. Inform him in writing that you are remitting his settlement of dues into his bank account, which is available with you.

You may also mention to him that if he has any objections to depositing the money into his bank account, he should reply to you within a week from the date of receipt of your letter. Failure to do so will result in the amount being considered as "Unclaimed Amount" for 3 years, after which it will be sent to the Welfare Commissioner.

It is not clear from your post how old this matter is and whether the dismissal was with or without a domestic enquiry. The employee may want to challenge the dismissal through the labor department/court and may not be accepting the Gratuity amount.

Suresh

Dear Sir,

We dismissed him on the 2nd of December 2016. The dismissal was carried out following a proper domestic inquiry conducted by a neutral third party (enquiry officer). The findings clearly state that he is guilty of the charges. Prior to this, he had been advised, warned, and suspended several times for the same reason - habitual absenteeism.

Regards,
Madhan.S

Since you have dismissed him even after a domestic enquiry, I guess he is planning to challenge the dismissal before the court; hence, he is not showing any interest in receiving gratuity.

In this case, please follow the above-mentioned steps as advised for the payment of gratuity.

Dear Madhan,

You have a strong case, so no worry. Now you can send the Gratuity amount cheque to his residential address with Registered A.D. In case he returns the envelope without acceptance, keep the returned envelope as it is in his personal file without opening. This can be produced as evidence in the future, if required.

Regards,
Suresh