Gratuity Rights & Article 61
We want to terminate an employee as the management found him not fit for the company. The management does not want to pay him the gratuity or benefits. What are the situations in which the employer can refuse to pay the benefits to the employee? On the other hand, what are the minimum benefits that an employer should pay to employee on termination? Please advice.
An employee is not entitled for any benefits if he or she is terminated under Article 61 of the Labour law. According Article 61, the employer has right to terminate the employment contract of an employee without any notice period or end of service benefits for reasons of gross misconduct such as false identity or nationality or submitted false certificates or documents, any act which causes gross financial loss to the employer, an assault on the person of the employer, disclosed confidential information, convicted for a crime involving immorality or dishonesty, drunk or under the influence of drugs during working hours or absent from work without legitimate cause for more than 7 consecutive days or 15 days in one year, etc.
Article 54 of the Labour Law stipulates that an employee who has completed a period of minimum one year of continuous service shall be entitled to gratuity pay on the termination of employment. The end of service gratuity shall be calculated based on the basic wage on the date of entitlement. Accordingly, the basic salary on the date of termination will be the basis for calculation of the same. The employee will be entitled for end of service gratuity minimum @3 weeks basic salary per year of service. The employee is also entitled for leave salary and repatriation expenses.