Gratuity Non Payment

Dear Client,
An organization/establishment with a workforce of 10 individuals and above is liable to pay gratuity under the Payment of Gratuity Act 1972. According to Section 4(1) of the Payment of Gratuity Act of 1972, a gratuity shall be paid to an employee upon cessation of employment regardless of reasons, if he or she has rendered continuous service for five years or more in the establishment. Section 4(2) of the Act provides that for every completed year of service or part thereof in excess of 6 months, the employer shall pay gratuity to an employee at the prescribed rates. So, for serving a period for 6 years, you are entitled to gratuity for 6 years and accordingly, for non-payment of gratuity, you can escalate your claim following the provision of sub-section 3A of Section 7 of the Payment of Gratuity Act, 1972 before the concerned Labour Commissioner and the Controlling Authority under the Act. Under Sub-Sec. 5 of Section 7 of the Act, the Controlling Authority is empowered under the Code of Civil Procedure, 1908, to try the claim of the applicant and pass an order on the claim petition directing the employer/company for payment of gratuity to an eligible employee. Further, be informed that the division bench of the Hon'ble Calcutta High Court passed on 29 September, 2016 in the case of Uco Bank & Ors vs Nityananda Paul & Anr the Court held that even retirement benefits like pension and gratuity cannot be attached by the authorities/court for recovery of debt or dues. The Hon'ble Supreme Court in the case of Radhey Shyam Gupta v. Punjab National Bank & anr reported in (2009) 1 SCC 376 ruled that proviso (g) of Section 60(1) of the Civil Procedure Code, 1908 precluded the authorities from attaching retirement benefits of a person. Hence, it is recommended to consult with an Advocate experienced in service and social security laws for tailored advice to understand your rights and remedies to navigate the matters correctly and legally.