If your employer goes bankrupt, do you risk losing your provident fund (PF) and gratuity? The short answer is no. However, while employees remain entitled to these dues, recovering them may still take time if the company is undergoing insolvency proceedings.
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The issue has come into focus following a recent National Company Law Appellate Tribunal (NCLAT) ruling in the Jet Airways insolvency case. The tribunal held that provident fund, gratuity and pension dues payable to employees cannot be treated as part of the company’s assets available for distribution to creditors, reinforcing the legal protection available to these statutory benefits.