If any employee has completed 04 years 11 months and few days, is he is eligible for gratuity?

Hello, Good Morning!

I have a little query - if an employee has completed 4 years, 11 months, and a few days, are they eligible for gratuity? Please confirm.

Yes, he is eligible to receive gratuity as he has completed 5 years of continuous service. Gratuity is a social welfare benefit, and a favorable interpretation should be provided.

Legally speaking, an employee has to complete five years of service to receive their gratuity payment. In the present scenario, some individuals with less than five years of service have gone to court to claim gratuity, citing difficulties in fulfilling the five-year requirement with their employer. The court has ruled in favor of the employees, considering it a matter of humanity.

There has been no amendment made to the Gratuity Act to include such eligibility criteria. Therefore, if the employer shows compassion, they may choose to consider the payment of gratuity for less than five years of service; otherwise, they may refuse. In the latter case, seeking court intervention is the only recourse.

Dear Vijay,

As per The Payment of Gratuity Act, 1972, Sec. 2A: Continuous Service - Four years and two hundred forty days, completed in the last year of service, he/she is eligible for gratuity.

Regards,

P. Senthil
CBE.

The employee has completed 4 years, 11 months, and a few days but is not eligible to receive gratuity because the employee has not completed 5 years of continuous service. In this regard, the employee should be asked to complete his 5 years of service to be eligible for gratuity because it is a matter of a few days.

The employee may cite the example of the Court Order, unfortunately not accepted in the Act till now.

The best practice is - HR should proactively inform the employee before accepting the resignation.

In my last job, due to this reason, I stayed for 5 years and 5 days!

Our HR and seniors were proactive and good!

Yes, he is eligible for gratuity and can opt for it.

Provisions of Section 2A(2)(ii) suggest that service for a period of 240 days during the final year shall count as a period of one year.

2A. Continuous service.--For the purposes of this Act,--
(1) -----------------------------------------------------------------------
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer--
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than
(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment that works for less than six days in a week; and
(ii) two hundred and forty days, in any other case;

As per the Gratuity Act, if an employee has completed a total of 240 actual working days, then that year is considered as a completed year of service. Therefore, if an employee has completed 4 years plus 240 actual working days, he shall be eligible for gratuity of 5 years.

Dear all,

As per my understanding, to avail gratuity, the first 5 years of continuous service are compulsory. The 240-day clause applies in cases where an individual has worked for 8 years, but in his 4th or 6th year, he has not worked for 240 days due to any reason. In such instances, that particular year will be discounted, and the individual will be entitled to 7 years of gratuity. It is worth noting that the court may have made decisions in favor of the employee based on humanitarian grounds.

Please correct me if I am mistaken.

Regards,
Lakshya