Understanding Gratuity Eligibility Criteria & Impact of Madras High Court Judgment on State vs. Cent

Dear seniors,

I need clarification on gratuity for this case, employee has joined the company on 1st of October 2008 and he resigned & company relieved him from the duties on 31 August 2013. The Employees worked in the organisation 4 Years 11 Months (Continued Service).

Company head office located at Mumbai. But they established their factory in Tamilnadu. Factory is registered under the factories act in Tamilnadu.

Questions:

1. Either the employees eligible for gratuity (or) not???

2. Company has to follow the Tamilnadu gratuity rules (or) not?

3. As per the gratuity act, we have to consider as continued service if employee worked 240 day in the respective year. So that why can’t we consider as continued service in the fifth year if employee worked 240 days???

Now the company says as per the central gratuity rules, employee not completed Years of service, so that he can’t deemed gratuity as per the rules.

Note: judgment has given by the Madras High Court: Mettur Beardsell Ltd Vs Regional Labour Commissioner, Madras High Court.1998, as you aware.

Kindly provide recent judgment on this by any courts.

Regards

MAS-Hr

Dear Mr. Mas HR,

According to the Gratuity Act, gratuity is payable to any employee after continuous five years of service. So, according to the act, the candidate is not eligible for gratuity. However, if we consider the Madras High Court judgment, then he is eligible for gratuity. But this is a debate between the court and the act according to experts.

Dear MAH-HR,

Your factory is located in Tamil Nadu, so all the rules and regulations that will be applicable are as per the state government and not the central government. Therefore, the employee will not be eligible to receive gratuity as per the act. If the employee had completed 5.5 years, then they would have been eligible for a total of 6 years of gratuity.

Regards,

Ravindra Kumar Gupta
Asst. HR Manager
09826910595

Dear Ravindra Kumar,

Thank you for your reply. The Madras High Court has given a judgment stating that 4 years and 240 days are eligible for gratuity. I have attached the notification for your reference.

Thanks.

Dear Seniors,

I think a person completed 240 days in a year, so his continuous service is for one year as clear in the act. Therefore, when a person completes 240 days in the 5th year, he is liable for gratuity.

Thanks,
Amar Singh

Dear Friend,

He completed 4 years and 11 months of continuous service. Since his service is more than 4 years and 6 months, his period should be considered as 5 years, and gratuity must be given to him.

He will be eligible for gratuity in this case as per the Madras High Court judgment.

I also found a nice article on various other employee benefits in India - [Employee Benefits by Companies in India - InvestmentYogi](http://www.investmentyogi.com/employee-benefits-by-companies-in-india/).

The employee has joined the factory or its Head Office. If the employee is working with the factory in Tamil Nadu, he/she is eligible for gratuity. Kindly consult a lawyer who will help you in this regard.

Dear All,

Can anyone please provide me with a copy of the Act where it is clearly mentioned that on completion of 4 years and 240 days, an employee is eligible to claim Gratuity? Still, this point is not clear as, in the absence of proper documentation, employers are not ready to pay it until and unless the employee has completed 5 years.

Thanks,
Deepa