Clarification On Payment Of Gratuity - PDF Download

Sirs,
Our Company is working for 5 days a week (due to extended hours).
An employee joined our Company on 01.03.2008. He has submitted his resignation an will be getting releived on 26.10.12 (After serving the notice period). Hence he has worked exactly for 4 years 240 days.
If we exclude weekly off, i.e., Saturday and Sunday, then he has worked for 4 years 172 days. Is he eligible for Gratuity.
Please clarify.
Regards,
Harish

Dear Harish
5 days working or 6 days working does not have any realation for calculating the 240 days .this includes working day,weekly off,holidays ,leaves ,even maternity leaves or any lay off period.
For getting eligiblity of gratuity 5 years service is must ,however if your company gives gratuity after completing 240 days in fifth year than it is ok and indiviual is entitle to get it but leally 5 years service is must to become eligible for the same

Dear Mr.Harish,
One is eligible for gratuity if he worked for 4 years and 240 days. Please find the attachement of madras high court judgment in this subject.
regards
S.GANAPATHY

Dear Mr Ganpati
court gives judgement in various cases and these judgements can be only considered when act is not clear.
Judgements are given on circumstance of the case.Gratuity act clearly mention in applicablity clause that gratuity is applicable
only after completion of five years.

Dear Harish,
As per Gratuity Act, one employee who is completed 5 years of service, he is eligible for getting the Gratuity.
But if he completed 240 days including PH, PL, CL,SL, Weekly off, etc. in the 5th Year, then he is eligible for getting the Gratuity.
Thanks & Regards,
Ganesh Mishra

Dear Harish,

He is eligible for gratuity.

by virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."

In order to be eligible for gratuity, employee should have at least 4.8 yrs continuous years of service with the employer.

An employee is in service in a calendar year provided he has worked for

190 days in case employee is employed below the ground and (4.6yrs)

240 days in any other case. (above the ground 4.8yrs)

Hope this discussion ends finally with a positive note

Regards

Sohail Shaikh

Dear Harish,

For eligibility of gratuity you have to serve for 5 years.

Most of them are referring to Madras High court judgement for 4 yrs and 240 days. It cannot be applicable to all. If everyone is referring to that means there is a judgement in P.Raghuvulua an sons Vs. Additional Labour court (1985) where an employee who has served for 4yrs and 11 months and 10 days is not eligible for gratuity.

ALL THE JUDGMENTS CANNOT BE TAKEN AS GRANTED.

Even though in gratuity act of Section 2A, continous service definition is given, section 4 of POG clearly states as follows.

Section: 4

Payment of gratuity.

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

So gratuity is applicable only when you complete 5 years and continuous service definition can be taken into account only when you are denied for payment by the company after completing 5 years.

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

Unless there is an amendment in the POG you cannot refer the judgement for all cases.

Dear All,
I also agree with Mr. Keshav,
Both the judgement given in Madras High Court and Honorable Supreme court took the definition of section 25 B of ID Act for the reference of Continuous service. But the same cannot be applied for S & E act or other act where ID act doesn't implies.

Hi!!!
I think we need to first find whether the employee is covered under the payment of gratuity act or not?
If he is covered under the gratuity act, then no other act is applicable and he is not entitled for the payment of gratuity as per the act as he has not completed 5 yrs of service. However, if he is not covered under the payment of gratuity act, then he is covered by the Industrial dispute act and the various judgement pass in all the cases refered hereabove can be considered and he is eligible to claim gratuity.
Thanks & Regards,
Moiz Modi.
HR Executive.

I go with Shri J.S. Malikji and others who have clearly said "Gratuity is not applicable" for 4 years+240 days service.
This 240 days service comes in to picture only after serving 5 years.
Still if the company wants grant considering the goodwill of the Company and the performance of employee - it is your company's gesture. Gratuity Act is not amended.
If we go with Court Rulings (Madras HC), then there are judgements that minimum wages can be split for PF contributions purpose. Does EPFO consider all such judgements? No.
Hence judgements are meant on case to case basis and does not apply in general to go with the respective Act or Rules unless and otherwise it is amended and gazetted.