Gratuity instead of ex gratia payment as part of severence pay

I have completed 5.5 years in the company (hence eligible for gratuity). I have recently been laid off. Now, as part of compensation, all employees are getting an ex-gratia amount equal to 15 days multiplied by the number of years in service. In my case, they are saying I will only receive gratuity instead of ex gratia.

I want to know your opinion on this. I feel gratuity was my right anyhow (by law), and I should also be getting ex-gratia. Otherwise, what benefit am I getting for working for more than 5 years compared to employees who have worked for less than 5 years?

You are eligible for gratuity if you worked for more than 5.5 years; in that case, your services would be counted for 6 years.

Regarding ex-gratia, it would depend on its terms and conditions, so the document or order regarding the same is to be considered, which may be provided. It is intriguing that only you are deprived of gratuity. Is it that ex-gratia is paid to those not eligible for gratuity?

It also needs to be clarified whether you fall within the definition of workmen as per the ID Act 1947. If so, it is possible that you may be eligible for retrenchment compensation (again 15 days' salary for every completed year of service). This requires a proper examination of both the facts and points of law.

My monthly salary is more than 2 lakh; hence, in my opinion, I will not fall under the workmen definition.

And yes, other laid-off employees (with less than 5 years' tenure in the company) are receiving ex-gratia (equal to 15 days multiplied by the number of years in service). However, in my case, HR is saying that since I will be receiving gratuity, I will not get ex-gratia.

The concept of ex gratia is that it's in addition to what is required by law. So you can't really force the employer to pay it. What they are required to pay is notice pay, gratuity, and any other terminal benefit stated in your appointment letter.

The only case you can insist on it is if this is a part of a scheme and you are included in the scheme.

Incidentally, everyone else is getting less than you, I hope you realize that.

By "lay off," I understand you mean termination or retrenchment of service. In this case, the ex gratia, I believe, is the retrenchment compensation as per Section 25F of the Industrial Disputes Act. This compensation is available only to employees who do not have any supervisory role. The retrenchment compensation amounts to 15 days' salary for every completed year of service, with qualifying service being just 240 days during the 12 months preceding the date of retrenchment.

Additionally, every employee will be eligible to receive gratuity equal to 15 days' pay for every completed year of service. Gratuity is available to all employees, including managers who have completed 5 years of service. As a manager, you will not receive the former but the latter only. Therefore, the company is right in their approach.

"Lay-off" (with its grammatical variations and cognate expressions) means the failure, refusal, or inability of an employer on account of a shortage of coal, power, or raw materials, or the accumulation of stocks, or the breakdown of machinery, or a natural calamity, or for any other connected reason, to give employment to a worker whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

Compensation for lay off to the workman whose name is borne on the muster roll of the industrial establishment and who has completed not less than one year of continuous service, he shall be paid by the employer for all days during which he has been laid off, except for the weekly holidays as may intervene, compensation which shall be equal to fifty percent of the total basic wages and dearness allowance that would have been payable to him had he not been laid off. It is payable for the first 45 days. If the employer is not in a position to resume the work, then he can retrench the workers by following the procedure as per Sec 25F of the ID Act by paying compensation of notice pay and retrenchment compensation. The poster might have denied compensation for layoff being in a managerial category.