Does a company have a right to withhold gratuity?

Does a company reserve the right to give or withhold a former employee’s gratuity? For example if I resign from a company, how long should it take and what percentage of my gratuity should the company pay after I have cleared? Norman Betungura

Dear Norman,
The employment contract and the Human Resource manual for your company define the remuneration due to the employees and the rights and obligations of both the employee and the employer.
Companies that include gratuity as part of the employee’s benefits pack usually do this as an employee retention strategy, implying that the longer one stays in the company’s employment, the bigger the percentage of gratuity they earn at the end of their tenure.
If payment of gratuity was included in your employment contract and the terms of its disbursement clearly spelt out, even when you resign, you will still be entitled to the stipulated percentages paid out in relation to the length of service.
Some companies on the other hand stipulate in their HR manuals to pay gratuity to some categories of their staff at every anniversary of the employee’s contract. This is especially common with executive appointments.
However, the length of time the terminal benefits take to be paid after an employee has exited their jobs shouldn’t ordinarily exceed one month unless the company is faced with a temporary liquidity problem. This, if is the case, should be clearly explained by the HR department to the exiting staff.
Therefore, your employer as I indicated earlier has an obligation to keep their side of the contract and pay all your benefits due to you, including gratuity at the agreed terms, at the time of your exit.

Moses Ssesanga
Head Human Resource
Monitor Publications Limited
[email protected]