End of Service Benifit - Gratuity Calculations
I'm repeating the question here raised by Neha Jay on 07-01-10 as below:
"It was informed that this rule came into existence in 2005. So my question is if an employee is working in the organization say from 2000 and he is quiting in 2009. So the end of service benefit is calculated from 2000 or from 2005 as the law came into existence only in that year (2005).......
also i was told that, the law has given option for the companies to choose in the above case whether to give from 2000 or from 2005. now that doesnt make sense for me.....because if its an end of service benefit he should get benefit from the date of joining, even though the law came into existence in 2005......
kindly correct me if am wrong/......also do let me know the source of the law articles if possible....am in search for the same..................
NehaJay"
As far as my view in the recent labor law, the article(54)stating as "In addition to any sums to which the worker is entitled to upon the expiry of his service, the employer shall pay the end of service gratuity to the worker who has completed employment of one year or more. This gratuity shall be agreed upon by the two parties, provided that it is not less
than a three-week wage for every year of employment. The worker shall be entitled to gratuity for the fractions of the year in proportion to the duration of employment.
The worker's service shall be considered continuous if it is terminated in cases other than those stipulated in article (61) of this Law and is returned to service within two months of its termination.
The last basic wage shall be the base for the calculation of the gratuity.
The employer is entitled to deduct from the service gratuity the amount due to him by the worker"
And the article(3)stating as "The Laws Nos. (3) for the Year 1962, (14) for the Year 1992 and 23 for the Year 1994 referred to together with any provision contradicting with the provisions of the accompanying this Law are hereby repealed"
Now,from the above, how we can come into the conclusion for the answer of the above Neha's Question which is the same is my question too?
End of service was not strictly applied before 2005 and paying ESB before this period is up to the Employer, but after 2005 you have to get the gratuity.
End of service was not strictly applied before 2005 and paying ESB before this period is up to the Employer, but after 2005 you have to get the gratuity.