Gratuity rules and eligibility - Company size is 5-10 employees only

Dear HRs,

I need your advice. My concern is, "Am I eligible for gratuity or not?"

I have worked for a small organization for more than five years. Now I have resigned. The company is registered, and the company size is 5-10 employees only. Will I get the gratuity amount in my Full and Final settlement or not? I do not know whether my company is covered under the gratuity act or if they follow this process.

Please help me.

Regards

Applicability of Gratuity:

Applicability of Act

The Payment of Gratuity Act 1972 applies to the whole of India. However, in relation to ports and plantations, it does not apply to the State of Jammu and Kashmir. The Act applies to:

- Every factory, mine, oilfield, plantation, port, and railway company.
- Every shop or establishment within the meaning of any law currently in force in a State, where 10 or more persons are or were employed on any day in the preceding 12 months.

Therefore, it is essential to ensure that 10 or more employees were hired in the last 12 months.

The numerical strength of the employees is the criterion for the applicability of the Payment of Gratuity Act, 1972 only in respect of shops or establishments and notified establishments as mentioned in sec. 1(3)(b) and (c) of the Act respectively. Sec. 1(3-A) of the Act explicitly clarifies that the subsequent reduction in the minimum number of 10 employees in the establishment is inconsequential for its continued application.

Since the poster has worked for more than 5 years before his resignation, he is eligible to receive gratuity.

Dear Mr. Lajpat,

You are eligible for the gratuity since you have completed five years of continuous service as it applies to the establishment, i.e., registered under the Factory Act, Shops Establishment Act, Mines Act, etc.

With the bare information posted by the querist, one cannot be sure whether he is entitled to gratuity or not. Unless he provides additional information, we cannot comment on the eligibility for gratuity.