Legal Question in Employment Law in India

Dear Sir,

I worked for an MNC as an executive from 15th January 1992 to 15th December 2009 and retired on superannuation.

My service from 15th January 1992 to 31st May 2003 was with the Liaison Office of the MNC from New Delhi and the MNC had another Ltd Co office in Mumbai.

The MNC had formulated a new Pvt Ltd Co during the end of the year 2002 and transferred employees of the Liaison Office and the Ltd Co to the new entity Pvt Ltd Co wef 1st Jun 2003 by issuing new appointment letter saying that �This transfer of service will not be construed as break in service and your start date with the BP Group will be the day you joined service with BP International Ltd Liaison Office, i.e January 15 1992. However please note that for participation in the retirement benefit plans of the ��.Private Limited the start date will be June 01,2003�.

At the time of transition of the new entity 1st Jun 2003) employees who were transferred from the Ltd Co were paid all their dues including Gratuity etc whereas the employees transferred from the Liaison office were not paid anything other than a letter saying � all the employees will be transferred to the new entity without break in service in the BP Group.�

The appointment letter of the Liaison office is silent about payment of gratuity but employees retired were paid ex-gratia payments according to their service. However the appointment letter dated 1st Jun 2003 of the new entity gratuity for executives are mentioned as one month basic salary.

Many of the then Liaison office employees have left service by now and I am the one who retired at the age superannuation. On enquiry of my gratuity details the HR calculated my gratuity from 1st Jun 2003 in accordance with the new appointment letter. On my representation for gratuity for the period 15th Jan 1992 to 31st May 2003 they have again come up with a new proposal of paying me one month gratuity for 11 years calculated on my basic pay of May 2003 as was done in the case of employees transferred from the Ltd Co.

I challenged the above decision, requesting for payment gratuity at the present rate of basic pay for the entire service or if it is calculated at 2003 basic pay, Govt. rate of interest from May 2003 onwards till payment of my gratuity.

The Management settled my Gratuity as under:-

�1/.For the period from 15th Jan 1992 to 31st May 2003, you were employed with BP International Liaison office contract of employment is silent with regard to retrial benefit including gratuity. However, keeping with the spirit of the letter dated 20th June 2003 �no employees would be worse off� due to the transition. Gratuity for this period will be paid as per payment of Gratuity Act, 1972 (i.e statutory gratuity) at current basic salary i.e basic at the time of exit.

2/ for the period from 1st Jun 2003 to 15th Dec 2009, you were employed with �India Service Private Limited. As per the contract of employment duly acknowledged by you, retrials in the new entity started from the date of your transition to the new entity. Accordingly, for this period, gratuity will be paid as per the BPISPL.Gratuity scheme at the current basic salary i.e basic pay at the time of exit�.

In view of above I have a strong feeling that the decision of the Management is bad in Law as they are confused in settling my gratuity by applying different yard sticks to minimize the payment. As there is no break in my service I must get full gratuity for the entire period at the basic pay of my time of exit and for one service there should not be two parameters for calculation of gratuity.

Please advice.

Regards

Thomas A

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