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DR.VEDULA GOPINATH (ADVOCATE AND CORPORAE ADVISOR)     11 November 2023

Gratuity act 1972

In the guise of CTC (cost to the company) few companies are reportedly deducting gratuity amount

or appropriating some amount from the monthly payment of salaries to the employees. 

Yet some companies are saying that the amount is paid to LIC. 

The spirit of gratuity is the amount is paid to the employee at the cessation of employment subject to relevant rules. The payment is required to be paid by the employer (not a contribution by an employee like P.F. contribution). 

Any legal precedents exist regarding irregularity or delay in payment of gratuity.

Learned colleagues may kindly enlighten me on this issue. thanks

dr vedula gopianath vgnath@gmail.com 



Learning

 9 Replies

T. Kalaiselvan, Advocate (Advocate)     11 November 2023

Sir, you are absolutely right in this view. 

The employer cannot deduct any amount from the employee 's salary towards gratuity payment. 

The affected persons can approach court under the provisions of gratuity Act 

DR.VEDULA GOPINATH (ADVOCATE AND CORPORAE ADVISOR)     12 November 2023

Bro Kalaiselvan 

Thanks. If possible and your time permits,  kindly favour me with any precedent.  vgnath@gmail.com

Sudhir Kumar, Advocate (Advocate)     12 November 2023

in the garb of CTC many employers also deduct employer share to be deposited in EPFO/ESI

Dr. J C Vashista (Advocate )     12 November 2023

No deduction or contribution can be made by employer on account of gratuity, however, undoubtly it is part of CTC since employer has to pay on ceasation of employment, if eligible / qualified.  

T. Kalaiselvan, Advocate (Advocate)     13 November 2023

@Dr. V opinath Sir, 

I will certainly look for any judgment in this regard and send it to your personal email id as and when I lay my hand to one

P. Venu (Advocate)     17 November 2023

CTC is rather an invented term; it has no nexus to norms regulating pay/salary.

The issue could be posted in citehr.com for more informed response.

DR.VEDULA GOPINATH (ADVOCATE AND CORPORAE ADVISOR)     18 November 2023

Hi Learned Colleagues

Greetings of the day.

 

I shall be highly obliged if any legal precedent is made av ailable to me as a favour.

thanks n regards

cs dr vedula gopinath

Ritesh Maity (Labour Law Advocate)     19 November 2023

Deduction of any amount in the name of gratutiy is not allowed under the Payment of Gratuity Act unlike ESI and PF.

Even if any amount is deducted, it is illegal and the employee can demand the illegally deducted amount. 

P. Venu (Advocate)     20 November 2023

The fact of the matter is that every component of CTC need necessarily be a deduction. Its legal status vis-a-vis salary is  vague.


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