A employee has worked for one or two years on third party payroll, later on he is moved to company payroll. so my question is whether the period for which he has worked on third party payroll is covered for gratuity period eligibility ??
please also tell some act or law provision is there for same...
The Payment of Gratuity Act, 1972 does not differentiate between on roll & off roll employees (except govt approved apprentices). Please refer definition of employee:
["employee" means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishments to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;.]
Employees on third party payrolls are actually the direct liability of Principal employer. Eg: If this same employee would have worked with the third party for 05 years & left, the actual liability of any gratuity payment would have been on your company (i.e the principal employer) The third-party/contractors are just intermediaries & they bill every such liabilities to their clients & the client is bound to pay all statutory payments arising out of employing such off-roll employees.
So now if you are taking him on-rolls, you will have to take into consideration his earlier years of service (till the time he was off-roll). Continuity of employment is what matters in Gratuity. And the moment he completes 05 years (off-roll plus on0roll), he will become eligible for gratuity payout.
regards
Adv Sunil Gaikwad
[Labour Laws | Payroll | PF | ESIC | PT | LWF | Audits | Advisory]
www.sunshineconsultants.co.in
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