• Gratuity calculation based on payable or last paid basic

Hi 
I am in a complex situation where I worked for a company for 7 years in Pune and then they sent me to onsite for 6 years with condition that gratuity will continue in India

They kept issuing me increment letters about increment of basic rate in india with condition if I join India back, it will be the increase basic

I did not join in India as the offshore office closed and I had to leave my company instead of going back to india

Not company wants to give me gratuity for 12 years 7in india and 5 for onsite deptuation with calcuation based on my 5 years back Basic salary and not the incremented basic as they say that you never joined back. but to my understanding they would have considered as payable basic if i join and not last paid basic. let me know if my understanding is right
Asked 7 years ago in Labour

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22 Answers

you joined a company in India and signed an agreement with them in India, therefore, you are eligible for gratuity as long as you worked for them....either in India or outside of India. by an amendment in 2018, the cap on the amount of gratuity payable has been removed. therefore you should claim gratuity as long as you worked for them, irrespective whether you were in India or abroad.

regards


I must add that the gratuity is calculated on the basis of the last drawn salary.

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

If an employee is transferred overseas on an assignment, then he is still eligible for Gratuity as he is on the rolls of the company. therefore suppose you went there after 4 years you still would have qualified. therefore the last drawn salary should be computed in INR and they should pay the same to you.

regards

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

Sir the gratuity shall be calculated based on the last drawn salary not basic payable.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

Since you were working for same company it shall be basic as drawn by you in UK.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

It will be number of years in to  last drawn basic salary plus da.

N = number of years of service in a company

B = last drawn basic salary plus DA

then,

Gratuity = N*B*15/26

Example of Gratuity Calculation:

For example, if ram is an employee who has worked with X Company for 20 years of service and had Rs.25,000 as his last drawn basic plus DA amount, then,

Gratuity Amount for Amit = 20*25,000*15/26 = Rs.2,88,461.54

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

How can the gratuity be calculated on the basis of salary that you were drawing before you left India? This means that not only did you get no hike/increment and continued working on the same salary but you have to pay less tax too...you were on their payroll..the Indian company.therefore the current salary would be relevant.

Regards 

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

Gratuity payable depends on two factors: Last drawn salary and years of service. 

 

2) you are entitled to gratuity on incremental basic and not on salary drawn 5 years back 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

It would not be Indiana salary paid 6 years but on basis of UK salary last drawn by you 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

You would be entitled to gratuity based on last drawn salary ie UK salary and not salary drawn in India 6 months back 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

1) If you're payroll is from India and salary is paid to you from India than you are eligible to get gratuity for 12 years of last withdrawan basic salary. 

 

2) You can check your amount by gratuity formula.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

The calculation as mentioned by you is highly objectionable so challenge lt immediately,you are entitle for full period of 13 years and salary for the calculation basic plus D A.

Koshal Kumar Vatsa
Advocate, Gurgaon
2282 Answers
3 Consultations

See it is last drawn salary so for you it shall be UK. 

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

It will be the last drawn salary being your company is the same. But it should have the components of basic and da in it. It will be basic salary.

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

In your case your last drawn salary will be calculated on the basis of increments that is given to you during your UK assignment and your entire salary will be calculated on the basis of that basic salary if your company is following this kind of policy then it is fine otherwise you can approach to High Court against the company for Payment of Gratuity please remember that increment letter for given to you for the calculation of gratuity and at the time of coming back to the home company that could also be taken as your basic for giving you the increment

Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

  1. As per the information mentioned in the present query, makes it clear that at one point who have been taking it wrong sir and on the point you are somewhere right in sayin/ talking about your last drawn salary.
  2. The fact is clear that if you would have joined in India then pay scale would have been different, but is also questionable that when they never sent to India then why were they incrementing the same as per the condition.
  3. And in fact, you have been misguided by them surely, there is no doubt in it.
  4. Now, last drawn salary means the salary which you got lastly, so it is there fault but good for you as your last drawn salary not in INR. Now, they can’t take the plea of not been the same what they put up as a condition.

Sanjay Baniwal
Advocate, South Delhi
5477 Answers
13 Consultations

Hi, 

The last drawn salary should be counted of UK. 

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

1. You have worked for your Company for 7 years in India and also for the said Company at his onsite project.

 

2. While working at the onsite project of the Company, you were in its employment posted onsite.

 

3. You had last drwan your salary directly from the Company when you were in India and while working with the onsite company, you have taken your salary from the onsite Company which was part of the agreement the onsite company have entered in to with your Company in India.

 

4. So, you are entitled to the increment you have received for tje last 6 years while working for your Company in India at the onsite project sent by your said Company.

 

5. You are entitled to get the gratuity for all the years you have worked with the Company while in India or also abroad being posted at your onsite project. 

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

1. In your case, your salary is deemed to have draen from your Company in India through the foreign Company with whom you are doing the onsite project.

 

2. When you are in continuous employment with your Indian Company while being at your  onsite project, you also should be considered to be availing the increment from your Indian Company.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

1. Your last drawn salary should be calculated considering the increament you have received for last 5 years while being abroad  on your actual last drawn salary 5 years back.

 

2. You are to be treated as an employee of your Indian Company while working abroad  at the onsite project as deputed by your Indian Company.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

You should see the company policy about this.

Have you received any communication in this regard from the company in black and white and whether you acknowledged the same in writing earlier?

You can send a written representation to accommodate your gratuity on the basis of yearly increment amount.

Failing to invoke any positive response, you may plan to initiate legal steps for recovery

 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

The last pay drawn shall be on the basis of the actual last pay drawn by you in UK.

If the company refuses to pay the same as pr last salary drawn, you may approach the commissioner of gratuity with a complaint

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

Why do you worry about the bigger mount or anything.

You were on the company's payroll even while you were working in UK, hence it would be fair and justified if the last pay drawn in UK is taken into consideration for payment of gratuity amount, you have alternative remedies also for this.

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

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