Query on gratuity and continuity of service
Querist :
Anonymous
(Querist) 23 December 2011
This query is : Resolved
Dear legal Experts,
Please give your advise on the following query
Facts of the case
----------------------
An employee worked in 4 different delhi based companies of a large group having five different companies (manufacturing
and marketing same product) for 10 years as a clerk in corporate Income tax department looking after and assisting CA's in
Income tax work of all 5 companies.He also have appointment letters having 100% identical terms and conditions of all 4
different companies.
During his 10 year of tenure he worked for 2 years in first company, 2 years in second company, 3 years in third company
and 3 year in fourth company since the group companies keep on closing their manufacturing operations regularly as a
result of cost cutting and competetion from MNC but as old income tax work was going on for all the companies he was
needed and shifted regularly in the running manufacturing company.In the eleventh year of his service he was shifted to the
fifth company with a new appointment letter having same languages as earlier ones to do the same job profile but this time
he was given gratuity and full and final settlement of 10 year of service as per decision of management with a verbal
assurance from HR Manager of fifth company (who was also shifted from 4th company along with the workman) that since
your services are needed further your continuity of service is not broken.
The workman never applied for this 10 year of gratuity (from 4 companies) on Form I but his gratuity payment cheque of 10
year service was given to him after 3 months of his date of exit from the account of 4th company where he served only 3 years
and although he was not interested to accept, the HR Manager advice him not to ignore it as it will make management
angry with him and he may loose his job.Unwillingly under fear of losing job he accepted and encashed the cheque.In the 11th year one of his colleague who also received the gratuity from 4th company before joining fifth company resigned and at that time he was given gratuity amount as per formula of gratuity of 1 year of service from fifth company under Ex-Gratia head but not under gratuity head on his F/F payment.
Later on after passing of two more years the fifth company got merged in a large company who started retrenching old
employees under garb of economic recession and reorganisation of various department by giving retrenchment
compensation as per ID Act.This company also retrenched the workman by giving him only compensation from his date of
joining in the fifth company i.e. only for 2 years.
Now my questions to labour case experts is as follows :
Can the workman file a case in labour court and claim retrenchment compensation of total 12 year of service on the grounds
that his service was continuous because at that time gratuity payment was just a formality by management (controlling five
companies having synergy in business and mutual understanding among themselves so far as the employee services are
concerned) because it fails to justify the following important points
a) The gratuity paid was of 10 years from 4th company whereas the workman served this 4th company only for 3 years (as
per appointment letter)
b) The workman never claimed gratuity on his own by applying on Form 'I' as per gratuity act or never given resignation to
4th company
c) The gratuity payment on Form L given by 4th company was not within 30 days but after 90 days and is also without
interest of delayed days.
d) Form L do not have Name, Description or rubber stamp of 4th company ( but only have signatures of then HR Manager who advised him)
e) His colleague was given 1 year of gratuity as exgratia keeping in mind the continuity of his service
Please cite some court cases favoring my right.
Querist :
Anonymous
(Querist) 26 December 2011
Dear legal experts
Eagerly waiting for your response before approaching court
Guest
(Expert) 26 December 2011
All companies, may be of the same group of companies, have their individual identity as an artificial person/ employer. It seems the companies' tactics to transfer the employees from one company to another before completion of 5 years of service in any one company is just to evade from the liability of payment of gratuity to their employees.
You may however need to check the language of your orders for transfer from one to another company. If that is a type of deputation and you used to draw salary from your parent company only then you would be able to succeed in your efforts.
Ex-gratia gratuity is not a type of regular gratuity admissible under the provisions of Payment of Gratuity Act.
If the companies have used such type of tactics, you must drag the companies to labour court by attracting the retrenchment provisions.
Querist :
Anonymous
(Querist) 27 December 2011
Dear Dhingra Sir,
Atleast out of so many legal experts you have responded to my query since I am of the opinion that such type of practices are followed in many companies of same group and no employee have taken up this type of case ever in our courts so legal experts are in a state of dilemma how to answer this query.
Any how I have mentioned specific grounds from point 'a' to 'e' on which I would request your valuable advise. Note that since gratuity is applicable only after completion of 5 years on roll of a single company how the 4th company where the employee served only for 3 years was paid 10 year of gratuity mentioning 10 years as service period on its Form L. Is it not interpreting that there must be some mutual understanding among group companies so far as the continuity of service was concerned.
Also the amount calculated using gratuity calculation formula and paid to his colleague for 1 year as Ex-gratia itself proves that this amount being calculated on gratuity calculation formula depicts that fifth company was also under some agreement with other four companies so far as continuity of service is concerned which finally implies that as per amalgamation/merger scheme under which undertaking of fifth company (transferor company) was taken by the big company (transferee company), the big company is bound to pay compensation of 12 years
please post your reply after deeply scrutinizing the facts 'a' to 'e'.
