Gratuity to contract labour
R.MALLIKARJUN
(Querist) 26 December 2013
This query is : Resolved
Sir, Please answer my doubt, sir is a contract labour is eligible for gratuity after completing 5 years of continues service, If contractor and principal employer made an agreement of not paying gratuity then is it ok as per labour act in andhrapradesh or is it compulsory to pay gratuity ?
thanks in advance
Kumar Doab
(Expert) 26 December 2013
Refer: Payment of Gratuity Act, 1972
Sec: 1(3) (3A),
2: (b) [2] [(c), (e), (f)
2A:1,2,
4A: Compulsory Insurance
If the contract labor has completed 5Y of uninterrupted service (190/240 days in 5th year) it is eligible for Gratuity.
The properly informed employees may demand to provide the copy of payment certificate issued by LIC and whole payment employer has received from LIC.
Even if the amount payable as per formula of calculation of Gratuity is less than amount received from LIC, employer should pay whole amount accrued in Gratuity a/c of employee.
If the contractor does not pay the Gratuity the contract labor may raise demand before principle employer.
Usually the Principle Employers keep arrangement in contract to defend itself.
Isaac Gabriel
(Expert) 27 December 2013
If at all there is agreement with the LIC the above mentioned procedure could be availed of.As section 4 A is yet to be notified under the Act,you are entitled for gratuity by the contractor or Principal employer irrespective of any agreement with them for the payment of gratuity,since it ia a central legislation and anyother legislation cannot supercede it.
Kumar Doab
(Expert) 27 December 2013
Mr. Gabriel has given valuable advice. Kindly follow it.
Payment of Gratuity Act, 1972 is a statue and no private agreement between contractor and principle employer shall provide any escape route.
Sec. 9 provides for penalty, punishment along with imprisonment.
YOU can very well point at it.
If you are apprehensive that these two entities shall delay and dump you, then you may obtain copy of the agreement cited by you and declinature if any (even if verbal) and approach Controlling Authority of Gratuity and Labor Commissioner (in writing under acknowledgment) and request them to proceed for recovery.
Trade Unions are sensitive in such issues. You can approach them.
As envisaged in the Act many states have issued notifications for ‘Compulsory Insurance for Gratuity’ however you may check the status in your state.
Even if the notification is issued due to lackluster approach in implementation many of employees are affected.
Without any delay before this contractor vanishes submit FormI and also a copy to principle employer, along with covering letter under proper acknowledgment (preferably by redg. post) that no notice on determination of Gratuity has been supplied and payment of Gratuity and any communication should be supplied by redg. post only and that a postage prepaid self addressed envelope is attached for sending redg. Post to you.
>>> THE GRATUITY ACT, 1972
The Payment of Gratuity (Maharashtra) Rules, 1972.
5) Compulsory insurance of the employees is to be obtained
http://esipf.com/labour-law/The%20Gratuity%20Act.pdf
>>>
--GOVERNMENT OF ANDHRA PRADESH
ABSTRACT
ACTs – Payment of Gratuity Act, 1972 (Act No.39 of 1972) – Andhra Pradesh compulsory Gratuity Insurance Rules, 2011 – Notification – Issued.
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LABOUR EMPLOYMENT TRAINING AND FACTORIES (LAB.IV) DEPARTMENT G.O.Ms.No. 11 Dated:04.03.2011
Read:
Lr.No.M1/8842/2010, dated: 04.12.2010 from the Commissioner of Labour, Andhra Pradesh.
***
ORDER: The following notification will be published in the Andhra Pradesh Gazette.
NOTIFICATION
1. (i) These rules may be called the Andhra Pradesh Compulsory Gratuity Insurance Rules, 2011.
(ii) They shall come into force at once.
{{{{ Obtaining Insurance for payment of Gratuity:-}}}}}
2. Every employer other than an employer of an establishment belonging to, or under the control of, the Central Government
or a State Government, shall subject to provisions of sub section (2) under section 4A of the Act, obtain an insurance
in the manner prescribed under sub-section (4) of section 4A of the Act for his liability for payment towards the gratuity
under this Act, from the Life Insurance Corporation of India or any other Insurance Company incorporated under the Company’s Act, 1950.
http://www.scribd.com/doc/61106679/Insurance-Rules-Andhra-Pradesh-4-March-2011
--You may also go thru interesting publication highlighting the apathy of labor Dept. in implementation at;
http://www.thehindu.com/todays-paper/tp-national/tp-andhrapradesh/many-workers-face-risk-of-losing-gratuity/article3680943.ece
“Over 400 workers of the Yemmiganur Spinning Mills in Kurnool district losing their entire gratuity due to the company’s insolvency, is a case in point.”
>>> In the state of Kerala even the courts acknowledged the provision and had to alert the government for Compulsory Insurance for Gratuity.
Kerala High Court
Retnavalli vs Ambalapadu Service Co-Operative ... on 16 May, 2005
http://legalplug.in/doc/1593942/
Before parting with this case, I would like to express a fervent hope that the Government of Kerala will, at least now, wake up from slumber and consider the question of notifying the coming into effect of Section 4A of the Payment of Gratuity Act, 1972, in the State of Kerala, without further delay. To alert the Government in this regard, a copy of this judgment will be forwarded to the Chief Secretary to Government.
Kerala High Court
K.P.Varghese, Kallarackal House vs Lic Of India on 27 July, 2010
http://legalplug.in/doc/1739149/?type=print
10. 1. Sum Assured: Since the policy is admittedly for payment of gratuity to the employees of the bank, for which provision is made in Section 4A of the Payment of Gratuity Act,
It shall be appropriate to approach a competent and experienced labor consultant/service lawyer as ap and proceed under expert guidance and counsel of your lawyer.
Rajendra K Goyal
(Expert) 29 December 2013
Agree with the experts, write to contractor and the principal employer for payment of Gratuity. If not paid, raise Industrial Dispute.
T. Kalaiselvan, Advocate
(Expert) 26 December 2013
