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Before withholding and forfeiting the gratuity employer has to find specific quantum of loss caused by the employee. - The Payment of Gratuity Act, 1972

Forfeiture of gratuity of an employee on account of loss/damages caused by that employee to the employer without putting him on notice, suffers from patent illegality in view of Rule 8 (ii) of the Payment of Gratuity (Control)Rules, 1972.Without finding specific quantum of loss caused by the employee, withholding amount of gratuity is not sustainable. For forfeiture of gratuity on account of financial loss suffered by the employer, the employer is required to begiven proper opportunity of hearing and submitting his/her defence as to whether why his gratuity is liable to be forfeited.

-Gayatri Prasad Singh vs. F.C.I. and others. 2019 (P&H H.C.)

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