Gratuity deductions

Hi,

First of all, please clarify as to why subsistence allowance should be deducted?

Cyril

Hi,

I have not received a reply to my query. In my view, subsitance allownace should not be linked to gratuity payment. This allowance is paid when a person is suspended pending an enquiry. If the charges are not established then the person is considered as "present on duty" and should be paid as if, he was present on work.

Please clarify wgat you want to know.

Cyril

Gratuity can not be deducted from subsitence allowance.
It is part of domestic inquiry when employee is suspended.
After inquiry if you decide any punitive action in that case no arrears of salary is required to pay.
But after inquiry if the employee is not guilty in that case entire amount of salary is required to be paid minus subsistance allowance paid.
pl refer your standing orders what is the provision for subsistence allowance.
my advise not to dedeuct subsistence allowance from gratuity it is violation of Gratuity acr.
if any querry pl feel free to ask
himanshu pathak
9227233315
ahmedabad

RE: Deduction fro Gratuity
There is no provision in the Act to make any adjustment or deduction in the quantum of payment of gratuity.
U/s 4(6) of the Act, there is however a provision for forefeiture under certain conditions.
As regards susbsitence allowance, it is the component of salary / wages payabled/ paid to an emplyee pending disciplinary proceedings or during disciplinary proceedings depending upon the Standing Orders of the Organiation and hence there is no question of deducting 'subsitence allowance' paid in lieu of 'wages' from the statutory payment of gratuity.

As a matter of clarification, the period under which an emplyees has received 'subsitence allowance' would be reckoned as 'uninterrupted service' under Section 2A of the Act for counting min. period of 'five years of continuous service' for deciding the entitlement to payment of gratuity.
A,Irudayam
Advocate
High Court, Madras
99406 86632

Subsistence allowance is to provide the employee a livelihood during the period of suspension.This subsistence allowance can be deducted while the period of suspension is regularised as leave or otherwise. If the employee is terminated, the subsistence allowance cannot be deducted.

Subsistence Allowance is an amount paid to the suspended employee during the period of suspension instead of paying the entire salary during the period of suspension whereas Gratuity is a terminal benefit payable after completion of 5 yrs when the employee leaves the organization and gratuity can only be forfeited for the reasons mentioned in the Gratuity Act. Both are totally different concepts and not to be confused.