Hi All Can somebody provide me the latest SC Judgement regarding the calculation of Gratuity i.e (4 years & 10 months) Thanks in advance
From India, Delhi
Acknowledge(0)
Amend(0)
10From India, Delhi
Acknowledge(0)Amend(0)
Dear Govil,
I have also heard that, as per the latest judgment of the honorable Supreme Court, an employee is eligible for gratuity if they have completed 4 years of continuous service and 240 days of continuous working in the 5th year.
This information has been shared in my thread, but I have not been able to verify it until now.
You can read more about the Supreme Court ruling on the Gratuity Act at this link: [SC Ruling on Gratuity Act](https://www.citehr.com/104526-sc-ruling-gratuity-act.html)
From India, Delhi
Acknowledge(0)Amend(0)
I have also heard that, as per the latest judgment of the honorable Supreme Court, an employee is eligible for gratuity if they have completed 4 years of continuous service and 240 days of continuous working in the 5th year.
This information has been shared in my thread, but I have not been able to verify it until now.
You can read more about the Supreme Court ruling on the Gratuity Act at this link: [SC Ruling on Gratuity Act](https://www.citehr.com/104526-sc-ruling-gratuity-act.html)
From India, Delhi
Acknowledge(0)Amend(0)
Hi Rajeev,
You are right. The case "Mettur Bearsell Ltd Vs Regional Labour Commissioner (Central)" referred to by Mr. Yedhulla Prakash was also reported in 1998 LLR 1072. So far, I have not come across any Apex Court judgment on this.
Thanks & Regards,
Kalyan R
From India, Madras
Acknowledge(0)Amend(0)
You are right. The case "Mettur Bearsell Ltd Vs Regional Labour Commissioner (Central)" referred to by Mr. Yedhulla Prakash was also reported in 1998 LLR 1072. So far, I have not come across any Apex Court judgment on this.
Thanks & Regards,
Kalyan R
From India, Madras
Acknowledge(0)Amend(0)
Dear Member,
Welcome to CiteHR.
Next, approach the Payment of Gratuity Act enforcement agency. If you are entitled to receive gratuity under the PG Act of 1972, first determine the appropriate government body and then file a complaint with your local labor office.
R.N.KHOLA
From India, Delhi
Acknowledge(0)Amend(0)
Welcome to CiteHR.
Next, approach the Payment of Gratuity Act enforcement agency. If you are entitled to receive gratuity under the PG Act of 1972, first determine the appropriate government body and then file a complaint with your local labor office.
R.N.KHOLA
From India, Delhi
Acknowledge(0)Amend(0)
I enclose herewith the judgment of Madras High Court in favor of paying gratuity to employees who have completed 4 years of continuous service and 240 days in the fifth year for your perusal.
Sudipta
From India, Calcutta
Acknowledge(0)Amend(0)
Sudipta
From India, Calcutta
Acknowledge(0)Amend(0)
Madras High Court ruling in Mettur Beardsell's case is okay. But where is the Apex Court verdict? In the link provided by Rajeev Verma, the same case is referred to, and the Supreme Court ruling given by Vikramlamhe pertains to section 25F of the Industrial Disputes Act. Please correct me if I am wrong.
Section 25F is different from Payment of Gratuity. Retrenchment compensation is available to all employees who have completed at least one year of service, and that one year means 240 days of working.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Section 25F is different from Payment of Gratuity. Retrenchment compensation is available to all employees who have completed at least one year of service, and that one year means 240 days of working.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Dear,
The judgment of the court applies to the facts of that case unless the provision is erased, i.e., struck down from the law book. Let not HR professionals get confused. The law is completion of 5 years.
Rajan Associates
https://www.citehr.com/285737-legal-...-industry.html
From India, Bangalore
Acknowledge(0)Amend(0)
The judgment of the court applies to the facts of that case unless the provision is erased, i.e., struck down from the law book. Let not HR professionals get confused. The law is completion of 5 years.
Rajan Associates
https://www.citehr.com/285737-legal-...-industry.html
From India, Bangalore
Acknowledge(0)Amend(0)
Rajan Associates...
While agreeing on completion of 5 yrs, please clarify the definition of 1 completed year. If I refer to Section 2 A) on continuous service which reads as follows:
Section 2-A: Continuous service
For the purposes of this Act,-
(1) An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service that may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order [* * *] treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was
(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 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 which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case;
What I decipher from the above is that one year would be considered as complete in case an employee has continuous service of 240 days if an organization has a 6-day week or 190 days in case less than 240 days.
Can you shed some light on this, please?
Thanks,
Anjali
Acknowledge(0)Amend(0)
While agreeing on completion of 5 yrs, please clarify the definition of 1 completed year. If I refer to Section 2 A) on continuous service which reads as follows:
Section 2-A: Continuous service
For the purposes of this Act,-
(1) An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service that may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order [* * *] treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was
(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 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 which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case;
What I decipher from the above is that one year would be considered as complete in case an employee has continuous service of 240 days if an organization has a 6-day week or 190 days in case less than 240 days.
Can you shed some light on this, please?
Thanks,
Anjali
Acknowledge(0)Amend(0)
It is correct that working for 190 days in a year will constitute one year in the case of establishments operating for five days a week. However, when the two days off are paid days, the significance of this particular provision in Section 2A must be carefully examined. This will definitely apply to those who are daily rated because for them, paid days in a week will only be 5 days, and the two off days will be unpaid.
To determine whether the year will constitute continuous service or not based on 240/190 days, all paid days, holidays, leave with pay, layoff days, legal strike days (for which payment is made to employees), maternity leave days (for female employees), etc., are considered as days worked. This means that if Saturdays and Sundays (if these are the two days off) are paid holidays, then it appears meaningless to state that 190 days should constitute continuous service because in such cases, an employee is receiving a direct bonus of 52 days which others working six days a week would not receive. In the former case, the 190 days include 104 days off (at a rate of two days per week), approximately 13 national and festival holidays, around 36 days of leave with pay, and only 37 days of actual work! In the latter case, it should be 139 days of physical work, 52 days off, 13 holidays, and 36 leave days.
Therefore, it should be interpreted without reference to the number of days worked in a week but with reference to the number of paid days in a week.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
To determine whether the year will constitute continuous service or not based on 240/190 days, all paid days, holidays, leave with pay, layoff days, legal strike days (for which payment is made to employees), maternity leave days (for female employees), etc., are considered as days worked. This means that if Saturdays and Sundays (if these are the two days off) are paid holidays, then it appears meaningless to state that 190 days should constitute continuous service because in such cases, an employee is receiving a direct bonus of 52 days which others working six days a week would not receive. In the former case, the 190 days include 104 days off (at a rate of two days per week), approximately 13 national and festival holidays, around 36 days of leave with pay, and only 37 days of actual work! In the latter case, it should be 139 days of physical work, 52 days off, 13 holidays, and 36 leave days.
Therefore, it should be interpreted without reference to the number of days worked in a week but with reference to the number of paid days in a week.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Hi Madhu,
I joined Tata Communications Ltd. on 2nd Jan 2007, and my last working day was 05 Aug 2011. I have worked continuously for 4 years and 215 days. During my employment, we worked 5 days a week and had weekends off for 2 days.
Now, am I eligible for the gratuity amount that is included as part of my CTC? I have raised this question multiple times with the Finance team, but they have informed me that according to Tata Trust rules, I must complete a full 5 years to receive my gratuity amount.
If there is a Supreme Court judgment on this matter, wouldn't that be applicable to Tata Trust as well?
From India, Bangalore
Acknowledge(0)Amend(0)
I joined Tata Communications Ltd. on 2nd Jan 2007, and my last working day was 05 Aug 2011. I have worked continuously for 4 years and 215 days. During my employment, we worked 5 days a week and had weekends off for 2 days.
Now, am I eligible for the gratuity amount that is included as part of my CTC? I have raised this question multiple times with the Finance team, but they have informed me that according to Tata Trust rules, I must complete a full 5 years to receive my gratuity amount.
If there is a Supreme Court judgment on this matter, wouldn't that be applicable to Tata Trust as well?
From India, Bangalore
Acknowledge(0)Amend(0)
Hi Madhu,
I worked at Tata Communications Ltd from 02 Jan 2007 until 05 Aug 2011, which totals 4 years and 215 days. The company operated on a 5-day workweek, and according to the Supreme Court (SC) order, 4 years and 190 days would qualify for gratuity.
In this scenario, would I be eligible for gratuity? The finance team claims that, based on Tata Trust rules, I must complete 5 years. Does the SC order not apply to trusts like Tata?
On the other hand, I am currently employed at an MNC in Hyderabad. They consider 4 years and 190 days as the period eligible for gratuity payment and have processed it. Why then is my former employer denying this by stating it doesn't apply to Tata Trust?
I need your assistance to proceed with this matter.
Thank you.
From India, Bangalore
Acknowledge(0)Amend(0)
I worked at Tata Communications Ltd from 02 Jan 2007 until 05 Aug 2011, which totals 4 years and 215 days. The company operated on a 5-day workweek, and according to the Supreme Court (SC) order, 4 years and 190 days would qualify for gratuity.
In this scenario, would I be eligible for gratuity? The finance team claims that, based on Tata Trust rules, I must complete 5 years. Does the SC order not apply to trusts like Tata?
On the other hand, I am currently employed at an MNC in Hyderabad. They consider 4 years and 190 days as the period eligible for gratuity payment and have processed it. Why then is my former employer denying this by stating it doesn't apply to Tata Trust?
I need your assistance to proceed with this matter.
Thank you.
From India, Bangalore
Acknowledge(0)Amend(0)
Dear All,
Kindly find attached the Bare Act of the Gratuity Act 1972. The extract of the section 2A is given below:-
Also i have attached the Gratuity Act 1972 Bare Act. Therefore it is very clear that the calculation is for 4 years 240 days.
Also all organisations irrespective of their own trust have to follow the rules. Their rules can differ if they are more beneficially to the employee than the present act.
The extract is below:-
The gratuity eligibility as per Gratuity Act 1972 is 5 years of continuous service. Sub section (2) of section 4 is for calculation of gratuity and not for the eligibility of gratuity.
But as per the judgment of the Supreme Court an employee is eligible for gratuity if he has completed 4 years of continuous service and 240 days continuous working in 5th year. On the day when he completes his 240 days in the 5th year he will be eligible for gratuity.
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."
Now almost all organizations are paying gratuity if an employee has completed 4 years of continuous service and 240 days continuous working in 5th year.
Regards,
Ashutosh Thakre
From India, Mumbai
Acknowledge(0)Amend(0)
Kindly find attached the Bare Act of the Gratuity Act 1972. The extract of the section 2A is given below:-
Also i have attached the Gratuity Act 1972 Bare Act. Therefore it is very clear that the calculation is for 4 years 240 days.
Also all organisations irrespective of their own trust have to follow the rules. Their rules can differ if they are more beneficially to the employee than the present act.
The extract is below:-
The gratuity eligibility as per Gratuity Act 1972 is 5 years of continuous service. Sub section (2) of section 4 is for calculation of gratuity and not for the eligibility of gratuity.
But as per the judgment of the Supreme Court an employee is eligible for gratuity if he has completed 4 years of continuous service and 240 days continuous working in 5th year. On the day when he completes his 240 days in the 5th year he will be eligible for gratuity.
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."
Now almost all organizations are paying gratuity if an employee has completed 4 years of continuous service and 240 days continuous working in 5th year.
Regards,
Ashutosh Thakre
From India, Mumbai
Acknowledge(0)Amend(0)
Hi Ashutosh Thakre,
Thank you for your detailed information. So, if the organization is working 5 days a week, can the 5th year be considered as 190 days? For example, would it be 4 years and 190 days if the company follows a 5-day week and 4 years and 240 days when the company follows a 6-day week?
I appreciate your response.
From India, Bangalore
Acknowledge(0)Amend(0)
Thank you for your detailed information. So, if the organization is working 5 days a week, can the 5th year be considered as 190 days? For example, would it be 4 years and 190 days if the company follows a 5-day week and 4 years and 240 days when the company follows a 6-day week?
I appreciate your response.
From India, Bangalore
Acknowledge(0)Amend(0)
For an establishment working for 5 days in a week, 240 shall be taken as 190 days. This is as per the Gratuity Act itself. The eligibility service remains 5 years from the date of joining, although there are court verdicts interpreting the requirement of 240 days or 190 days, as the case may be. The mandatory days for deciding continuous service, as one year of service is provided the employee has already completed 4 years in the preceding service period. A similar ruling has come from the Kerala High Court, stating that an employee who has worked for 4 years and 240 days (190 days for establishments working for 5 days in a week) is eligible for gratuity, considering that 240/190 days will constitute one year (Sreeja Vs. Regional Labour Commissioner [2015 LLR826]).
Ashutosh: Please share the Supreme Court ruling you have mentioned in your post.
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Ashutosh: Please share the Supreme Court ruling you have mentioned in your post.
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Dear Ashutosh Thakre ji,
The Supreme Court judgment that you have quoted does not pertain to the Gratuity Act but rather to the provisions under the ID Act.
In this thread four years ago, Mr. Madhu and Rajanassociates shared their opinions. Mr. Madhu is a Super Moderator of our forum with vast experience in Industrial Relations. Rajanassociates are legal counsels/advocates practicing in the field of labor laws for a considerable period. However, you held a different opinion from theirs.
It is acceptable to disagree with someone, but it should be done with thorough knowledge.
I have a simple question for you: If there was a Supreme Court judgment on this subject in 1980, how did the Madras High Court and Kerala High Court admit similar cases after 1980?
Our concern is with the law and not with what is commonly practiced. Practices are adopted by people who presume that what they know reflects the law. In a recent discussion, an HR manager stated that gratuity is deducted from the salary and given later upon separation.
I apologize for my straightforwardness. I couldn't hold back my thoughts.
From India, Mumbai
Acknowledge(0)Amend(0)
The Supreme Court judgment that you have quoted does not pertain to the Gratuity Act but rather to the provisions under the ID Act.
In this thread four years ago, Mr. Madhu and Rajanassociates shared their opinions. Mr. Madhu is a Super Moderator of our forum with vast experience in Industrial Relations. Rajanassociates are legal counsels/advocates practicing in the field of labor laws for a considerable period. However, you held a different opinion from theirs.
It is acceptable to disagree with someone, but it should be done with thorough knowledge.
I have a simple question for you: If there was a Supreme Court judgment on this subject in 1980, how did the Madras High Court and Kerala High Court admit similar cases after 1980?
Our concern is with the law and not with what is commonly practiced. Practices are adopted by people who presume that what they know reflects the law. In a recent discussion, an HR manager stated that gratuity is deducted from the salary and given later upon separation.
I apologize for my straightforwardness. I couldn't hold back my thoughts.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear All, The extract of the case is attached herewith. The SC ruling i shall update by coming Monday. Regards, Ashutosh Thakre
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Mr. Koregaonkar,
Thank you for the frank reply. I understand that the case was under the ID ACT, but it was regarding gratuity. The Supreme Court has clearly stated that the definition of continuous service in the Industrial Dispute Act and the Payment of Gratuity Act are synonymous. Therefore, the same principle can be applied under this act as well. An employee who has served for 4 years, 10 months, and 11 days is considered to have completed 5 years of continuous service under sec. 4(2) and is thus eligible for gratuity.
I hope this clarifies your doubts.
Regards,
Ashutosh Thakre
From India, Mumbai
Acknowledge(0)Amend(0)
Thank you for the frank reply. I understand that the case was under the ID ACT, but it was regarding gratuity. The Supreme Court has clearly stated that the definition of continuous service in the Industrial Dispute Act and the Payment of Gratuity Act are synonymous. Therefore, the same principle can be applied under this act as well. An employee who has served for 4 years, 10 months, and 11 days is considered to have completed 5 years of continuous service under sec. 4(2) and is thus eligible for gratuity.
I hope this clarifies your doubts.
Regards,
Ashutosh Thakre
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Thakre ji,
You have not answered my question. I have no doubt in my mind, and I am very clear on the subject. I am starting to feel that I am unnecessarily spending my time sharing my knowledge on this forum.
From India, Mumbai
Acknowledge(0)Amend(0)
You have not answered my question. I have no doubt in my mind, and I am very clear on the subject. I am starting to feel that I am unnecessarily spending my time sharing my knowledge on this forum.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Learned Members of this Forum,
To conclude this subject, please find attached a judgment of Hon’ble Supreme Court in Grand Kakatiya Sheraton Hotel & Towers
Employees & Workers Union v. Srinivasa Resorts Ltd. & Ors. delivered on 27.02.2009.
Hon’ble Supreme Court in this case upheld the judgment of the Andhra Pradesh High Court, by which that court had struck down as unconstitutional the provisions of the Andhra Pradesh Shops and Establishments Act by which gratuity was made payable even to employees who had not completed 5 years service as per the Payment of Gratuity Act, 1972.
Given below is some text verbatim on page 11 of the Judgment:
"It is already held by this Court time and again that the concept of gratuity as conceived in the Payment of Gratuity Act and even earlier to that in labour jurisprudence is that gratuity is a reward for long and continuous service. It is for the first time by that Act, a worker or an employee was made entitled to the gratuity by his rendering continuous service for five years. If this is so, then providing only one year for entitlement to get the gratuity, is certainly unreasonable."
In light of above, my humble request to the learned members of this forum to conclude this subject. No further contribution from my side will be done on this topic unless some one raise a question of law.
From India, Mumbai
Acknowledge(0)Amend(0)
To conclude this subject, please find attached a judgment of Hon’ble Supreme Court in Grand Kakatiya Sheraton Hotel & Towers
Employees & Workers Union v. Srinivasa Resorts Ltd. & Ors. delivered on 27.02.2009.
Hon’ble Supreme Court in this case upheld the judgment of the Andhra Pradesh High Court, by which that court had struck down as unconstitutional the provisions of the Andhra Pradesh Shops and Establishments Act by which gratuity was made payable even to employees who had not completed 5 years service as per the Payment of Gratuity Act, 1972.
Given below is some text verbatim on page 11 of the Judgment:
"It is already held by this Court time and again that the concept of gratuity as conceived in the Payment of Gratuity Act and even earlier to that in labour jurisprudence is that gratuity is a reward for long and continuous service. It is for the first time by that Act, a worker or an employee was made entitled to the gratuity by his rendering continuous service for five years. If this is so, then providing only one year for entitlement to get the gratuity, is certainly unreasonable."
In light of above, my humble request to the learned members of this forum to conclude this subject. No further contribution from my side will be done on this topic unless some one raise a question of law.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Mr. Koregaonkar,
My humble request is to please clarify where in the attached case the court ordered a continuous 5 years of working, which is not equivalent to 4 years and 240 days. The entire case is viewed from a different angle. The discussion we are all trying to understand is whether 5 continuous years of service are equivalent to 4 years, 240 days, or 190 days.
Regarding your question about why the court admitted the cases if they had a verdict before, I am very sorry, but not being a lawyer, I shall not be able to comment on the same.
Regards,
Ashutosh Thakre
From India, Mumbai
Acknowledge(0)Amend(0)
My humble request is to please clarify where in the attached case the court ordered a continuous 5 years of working, which is not equivalent to 4 years and 240 days. The entire case is viewed from a different angle. The discussion we are all trying to understand is whether 5 continuous years of service are equivalent to 4 years, 240 days, or 190 days.
Regarding your question about why the court admitted the cases if they had a verdict before, I am very sorry, but not being a lawyer, I shall not be able to comment on the same.
Regards,
Ashutosh Thakre
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Ashutosh ji,
Thank you for appreciating my last post. My humble submission here is as follows:
On this subject, I have contributed enough with the limited knowledge I have. I do not wish to contribute further, as mentioned earlier. Let the experts and senior members contribute.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
Thank you for appreciating my last post. My humble submission here is as follows:
On this subject, I have contributed enough with the limited knowledge I have. I do not wish to contribute further, as mentioned earlier. Let the experts and senior members contribute.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Sirs,
From the above discussions, I understand that if an organization is working 6 days a week, in that case, 240 days of continuous service in the 5th year are sufficient to be considered as a complete year of service for the payment of gratuity, which requires 5 years of continuous service. The 240 days of continuous service in the 5th year mentioned here are completed in 10 months and 11 days (315 days = 45 weeks) in the 5th year of service.
Can someone explain how 240 days of continuous service gets completed in 10 months and 11 days?
Regards,
Harsh Gupta
From India, Gandhinagar
Acknowledge(0)Amend(0)
From the above discussions, I understand that if an organization is working 6 days a week, in that case, 240 days of continuous service in the 5th year are sufficient to be considered as a complete year of service for the payment of gratuity, which requires 5 years of continuous service. The 240 days of continuous service in the 5th year mentioned here are completed in 10 months and 11 days (315 days = 45 weeks) in the 5th year of service.
Can someone explain how 240 days of continuous service gets completed in 10 months and 11 days?
Regards,
Harsh Gupta
From India, Gandhinagar
Acknowledge(0)Amend(0)
I did not get what exactly your query is. If your concern is about 240 days over a period of 10 months and 11 days, I would like to say that 240 days do not represent the days physically present but rather the days for which wages have been paid. This should include all holidays, weekly off days, and paid leave days.
There have been discussions over the issue of 240 days in the 5th year as a qualifying period for gratuity for a long time, and the situation remains the same. Still, if you follow the Payment of Gratuity Act, the gratuity qualifying service is 5 years. It is true that to be considered as continuous service for the purpose of gratuity, a period of 12 months should have at least 240 paid days. Many of us believe that if you have 240 paid days in the 5th year, you will be eligible for gratuity because one year is considered as 240 days. The two judgments that many of us refer to have also interpreted the provision of one year of service as 240 days.
Madhu T K
From India, Kannur
Acknowledge(0)Amend(0)
There have been discussions over the issue of 240 days in the 5th year as a qualifying period for gratuity for a long time, and the situation remains the same. Still, if you follow the Payment of Gratuity Act, the gratuity qualifying service is 5 years. It is true that to be considered as continuous service for the purpose of gratuity, a period of 12 months should have at least 240 paid days. Many of us believe that if you have 240 paid days in the 5th year, you will be eligible for gratuity because one year is considered as 240 days. The two judgments that many of us refer to have also interpreted the provision of one year of service as 240 days.
Madhu T K
From India, Kannur
Acknowledge(0)Amend(0)
Sir,
In one of the above posts following point has been mentioned with reference to judgement of the Supreme Court-
"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."
My query is related to requirement of service period for eligibility of Gratuity-
My organisation does not work on 2nd and 4th Saturday every month. Hence, my case falls in between 5 day working and 6 day working.
My service period in the organisation is 4 yrs and 244 days as on last date of my services.
Whether I will be eligible for receiving Gratuity Payment from my organisation?
Regards
From India, Gandhinagar
Acknowledge(0)Amend(0)
In one of the above posts following point has been mentioned with reference to judgement of the Supreme Court-
"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."
My query is related to requirement of service period for eligibility of Gratuity-
My organisation does not work on 2nd and 4th Saturday every month. Hence, my case falls in between 5 day working and 6 day working.
My service period in the organisation is 4 yrs and 244 days as on last date of my services.
Whether I will be eligible for receiving Gratuity Payment from my organisation?
Regards
From India, Gandhinagar
Acknowledge(0)Amend(0)
Also the organisation does not work on all Sundays along with 2 Saturdays
From India, Gandhinagar
Acknowledge(0)Amend(0)
From India, Gandhinagar
Acknowledge(0)Amend(0)
As already pointed out, even when the Madras High Court view was in existence, many authorities under the Payment of Gratuity Act had refused to grant gratuity, saying that there is no Supreme Court view on this. Since the Act makes it very clear that completion of 5 years is mandatory for being eligible for gratuity, an employee who has not completed 5 years but has a service of 240 days in the fifth year is not eligible to get gratuity. When the Kerala High Court verdict came, the same was again opened, and the appropriate authorities in Kerala started ordering payment of gratuity to persons who have not completed 5 years of service but have had 4 years and 240 days of service.
The issue of retrenchment compensation is different. In order to be eligible to get retrenchment compensation, just a service of one year is sufficient. In the case of gratuity, it is not one year but 5 years. It is true that 240 days of service constitute one year under both the Act. It is so in the case of eligibility for leave under the Factories Act and Plantations Labour Act.
For eligibility for gratuity, one should have worked for not less than 5 years continuously, with each year having at least 240 days (paid days). If you have worked for more than 5 years, say, 8 years, but in between there are, say, four years with service of fewer than 240 days, the employee will not get gratuity. In this context, we should also consider that if the employee has not "worked" for 240 days but was "employed" for 240 days, he will get gratuity. And if an employee "employed" has remained absent without leave and as a result of his absence, he could not work for 240 days, then he will not get gratuity. These equations are true in the case of temporary workers who are not "employed" continuously on the rolls of the employer but are called or engaged to "work" whenever required.
Therefore, the first qualifying parameter is 5 years of service, and the second thing is that each year should have 240 days pay days. When the first milestone is not reached, naturally, he will disqualify from gratuity. At the same time, Madras High Court and Kerala High Court, having interpreted the Gratuity Act to make it available to persons who were not employed for 5 years but were employed for 4 years and 240 days in the 5th year, we can also follow it. But, if your employer rejects saying that you have not completed 5 years and then the Appropriate authority, i.e., the Labour Officer, supports it, you will have no other choice but to prefer a complaint interpreting the law as above and quoting the above two verdicts.
Madhu T K
From India, Kannur
Acknowledge(0)Amend(0)
The issue of retrenchment compensation is different. In order to be eligible to get retrenchment compensation, just a service of one year is sufficient. In the case of gratuity, it is not one year but 5 years. It is true that 240 days of service constitute one year under both the Act. It is so in the case of eligibility for leave under the Factories Act and Plantations Labour Act.
For eligibility for gratuity, one should have worked for not less than 5 years continuously, with each year having at least 240 days (paid days). If you have worked for more than 5 years, say, 8 years, but in between there are, say, four years with service of fewer than 240 days, the employee will not get gratuity. In this context, we should also consider that if the employee has not "worked" for 240 days but was "employed" for 240 days, he will get gratuity. And if an employee "employed" has remained absent without leave and as a result of his absence, he could not work for 240 days, then he will not get gratuity. These equations are true in the case of temporary workers who are not "employed" continuously on the rolls of the employer but are called or engaged to "work" whenever required.
Therefore, the first qualifying parameter is 5 years of service, and the second thing is that each year should have 240 days pay days. When the first milestone is not reached, naturally, he will disqualify from gratuity. At the same time, Madras High Court and Kerala High Court, having interpreted the Gratuity Act to make it available to persons who were not employed for 5 years but were employed for 4 years and 240 days in the 5th year, we can also follow it. But, if your employer rejects saying that you have not completed 5 years and then the Appropriate authority, i.e., the Labour Officer, supports it, you will have no other choice but to prefer a complaint interpreting the law as above and quoting the above two verdicts.
Madhu T K
From India, Kannur
Acknowledge(0)Amend(0)
Hi all Please let me know that, if an employee works 9 years and 7 month what will be his number of served years whether 9 years or 10 years. regards / ramesh/Ambur.
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Ramesh ji,
I welcome your first-ever post on this forum. I am reproducing section 4(2) of the POG Act verbatim as follows:
"Sec 4(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned."
What does "part thereof in excess of six months" mean? According to this, more than six months are to be considered a full year.
From India, Mumbai
Acknowledge(0)Amend(0)
I welcome your first-ever post on this forum. I am reproducing section 4(2) of the POG Act verbatim as follows:
"Sec 4(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned."
What does "part thereof in excess of six months" mean? According to this, more than six months are to be considered a full year.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Keshav Korgaonkar Ji, Thank you very much for your valuable reply and can you give me any case reference for the same. thanks and regards. ramesh/Ambur.
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Ramesh ji,
For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned. This is the Law. I have given you the provision verbatim. There is no ambiguity in it. The wordings are beyond clarity. Still you want case reference. Why?
You are a HR professional. If you have a doubt in the provision or have a dispute in it, you are free to represent your case, set a case law and and give the case reference to this forum.
From India, Mumbai
Acknowledge(0)Amend(0)
For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned. This is the Law. I have given you the provision verbatim. There is no ambiguity in it. The wordings are beyond clarity. Still you want case reference. Why?
You are a HR professional. If you have a doubt in the provision or have a dispute in it, you are free to represent your case, set a case law and and give the case reference to this forum.
From India, Mumbai
Acknowledge(0)Amend(0)
Hi, I have completed 10 years in a private school organization. However, the school denied giving me gratuity. I then filed a case with the education department in Punjab. Now, they have asked me to provide any written information or legal orders as the school has stated that individuals should either be 58 years old or have completed 20 years in the organization to be eligible for gratuity.
Please, if anyone can assist me, I would greatly appreciate it.
Regards, Jasmeet
8427028087
From India, Delhi
Acknowledge(0)Amend(0)
Please, if anyone can assist me, I would greatly appreciate it.
Regards, Jasmeet
8427028087
From India, Delhi
Acknowledge(0)Amend(0)
This is not a subject of the education department but it is a matter for your area's Labour Officer. You may approach the Labour department. They may not require any citation or the bare Act to take action regarding the issue at the school.
From India, Kannur
Acknowledge(0)Amend(0)
From India, Kannur
Acknowledge(0)Amend(0)
Dear All.
While working with one of private company, it was practice that, even in case of eligible permanent workers who has rendered service more than 5 years, they considered those years in which the worker has physically present for 240 days. The management's interpretation was that, the gratuity is payable according to Section 2 A (2) (a) (ii) of the Payment of Gratuity Act, extract of the clause is shortly stated below.
[2A. Continuous service.—For the purposes of this Act,—
(1) an employee shall be said to be in continuous service ............................
(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 calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days,....................................
(ii) two hundred and forty days, in any other case;
After reference of provisions of the Act & some case laws as well as discussions had with seniors, my assumptions is, the above clause may applicable to Badali/Temporary workers who are working in absence of permanent worker for time being.
My query is, Is it legal and proper to apply above clause of 240 days actually worked in each year for eligibility of gratuity payment to permanent employees ? Is there any case law in which Hon'ble Court may have explain in details or made interpretation on the above clause is not applicable for the gratuity payment of permanent worker ?
Shaikh. I.Y.
Manager HR.
From India, Nashik
Acknowledge(0)Amend(0)
While working with one of private company, it was practice that, even in case of eligible permanent workers who has rendered service more than 5 years, they considered those years in which the worker has physically present for 240 days. The management's interpretation was that, the gratuity is payable according to Section 2 A (2) (a) (ii) of the Payment of Gratuity Act, extract of the clause is shortly stated below.
[2A. Continuous service.—For the purposes of this Act,—
(1) an employee shall be said to be in continuous service ............................
(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 calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days,....................................
(ii) two hundred and forty days, in any other case;
After reference of provisions of the Act & some case laws as well as discussions had with seniors, my assumptions is, the above clause may applicable to Badali/Temporary workers who are working in absence of permanent worker for time being.
My query is, Is it legal and proper to apply above clause of 240 days actually worked in each year for eligibility of gratuity payment to permanent employees ? Is there any case law in which Hon'ble Court may have explain in details or made interpretation on the above clause is not applicable for the gratuity payment of permanent worker ?
Shaikh. I.Y.
Manager HR.
From India, Nashik
Acknowledge(0)Amend(0)
Very simple, you may just read 240 days as 240 paid days. That means these 240 days should include all weekly off days, paid leaves, and holidays. Obviously, the permanent employees will be paid for 30/31 days a month. They will be eligible for holidays with pay and will also be given paid leaves like CL or PL. In the case of female employees, maternity leave days are also included. Therefore, it is better to consider 240 as 240 paid days. Even for a permanent worker/employee who fails to meet this 240-day target due to regular absenteeism or being absent without leave, gratuity shall be refused for those years where the qualifying 240 paid days are not met.
From India, Kannur
Acknowledge(0)Amend(0)
From India, Kannur
Acknowledge(0)Amend(0)
I think until the issue is clear, as per the provisions of the Act, in the case of permanent workers where their total paid days are below 240 days due to absenteeism, management must conduct a domestic enquiry. If the charges of absenteeism leveled against the worker are proven, the decision to break the services must be taken. Only then the particular year in which the worker has not received 240 paid days cannot be considered for gratuity.
Shaikh.I.Y. Manager HR.
From India, Nashik
Acknowledge(0)Amend(0)
Shaikh.I.Y. Manager HR.
From India, Nashik
Acknowledge(0)Amend(0)
Employee has worked for 8 years, 6 months, and 27 days. What would be the completed years, is it 8 years or 9 years? I have gone through this forum where your team is referring to section 4(2) of the Payment of Gratuity Act, 1972 for completed years of service. However, if we go by section 4(1) of the Payment of Gratuity Act, 1972, where it is specifically mentioned that "payable to the employee after he has rendered continuous service" and there is a definition given for continuous service in the act. So accordingly, an employee has to complete 240 days to consider it a completed year in the gratuity calculation.
If the employee is not fulfilling the requirement given in section 4(1) of the Payment of Gratuity Act, 1970, what is the logic of section 4(2) of the Payment of Gratuity Act, 1970?
Can anyone please provide an explanation of the above points? If anyone can provide a case study, court ruling, or judgment related to this matter, it would be greatly appreciated.
From India
Acknowledge(0)Amend(0)
If the employee is not fulfilling the requirement given in section 4(1) of the Payment of Gratuity Act, 1970, what is the logic of section 4(2) of the Payment of Gratuity Act, 1970?
Can anyone please provide an explanation of the above points? If anyone can provide a case study, court ruling, or judgment related to this matter, it would be greatly appreciated.
From India
Acknowledge(0)Amend(0)
Section 4(2) is a direction to calculate gratuity. Once an employee becomes eligible for gratuity, while calculating the year of service, a fraction of a year exceeding 6 months should be rounded off to one year. That means, in your example, if you have 8 years, 6 months, and 27 days of service, the eligible service will be 9 years.
The issue of 240 days has nothing to do with the above. 240 days is the bare minimum paid days required for an employee even to become eligible for gratuity. That means if you have lots of unpaid leaves in each year as a result of which you fail to get 240 days in a year, such years will not be counted for gratuity calculation. Continuing the above example, say, out of 8 years, there was a year, say 2017, in which you did not attend work for a few months but could attend only for 220 days in total, and the absence remained unregularized. Then that year will not be taken for gratuity calculation. At that time, you cannot say that you had worked for more than six months in that year, 2017; you should get the benefit of one year of gratuity. This fraction matter appears only in the last year and not in between the service.
From India, Kannur
Acknowledge(0)Amend(0)
The issue of 240 days has nothing to do with the above. 240 days is the bare minimum paid days required for an employee even to become eligible for gratuity. That means if you have lots of unpaid leaves in each year as a result of which you fail to get 240 days in a year, such years will not be counted for gratuity calculation. Continuing the above example, say, out of 8 years, there was a year, say 2017, in which you did not attend work for a few months but could attend only for 220 days in total, and the absence remained unregularized. Then that year will not be taken for gratuity calculation. At that time, you cannot say that you had worked for more than six months in that year, 2017; you should get the benefit of one year of gratuity. This fraction matter appears only in the last year and not in between the service.
From India, Kannur
Acknowledge(0)Amend(0)
Gratuity – Continuous service interpretation for Technology / IT / BPO companies
The continual years of service eligibility for gratuity mandate a minimum of five years which is unaltered (status quo remains) per the Payment of Gratuity Act.
The legal interpretation for continuous working days to be applied with a difference between “under the ground” (mining, under the sea, plantations) which is further interpreted as “hazardous job nature”; whereas “above the ground” (other) establishments represents “unhazardous job nature” - the key differentiator for the purpose of deciding the “no of days” of continuous service.
190 days or less than 6 days working per week represents an “employment in hazardous working / occupational hazard jobs by nature” and hence a resultant reduced gratuity eligible days/working days.
This is the intent of the legal script notified under section 2A, 2 (i) within the same clause; if the “number. of working days at less than 6 days” was purported for “any industry” the clause would have been carefully differentiated.
So, any wrong ideation to isolate the clause of “less than 6 working days” is irrational to relate to “above the ground” non-hazardous jobs – Technology / IT / BPO companies fall under this category, they provide “safe jobs” as much five days working was intended for a lifestyle balancing amongst such industry as a “best practice” and not for any occupational hazard-related.
Hence, for Technology / IT / BPO companies, from a computation point of view, any consecutive 8 worked months period post 4 years of continuous service shall make the employee eligible for gratuity. The consecutive eight months computes to 240 paid days.
Note: So far, there has been no case laws notified for the above 190/less than 6 days work week for Non-hazardous jobs (scenario) in both HC / SC; the last being a mandate to adhere to 4 years and 240 days as minimum criteria.
Hope, hereon, all legal intellectual forums, social media forums ensure depth interpretations and not a mislead maneuvers.
From India, Puducherry
Acknowledge(0)Amend(0)
The continual years of service eligibility for gratuity mandate a minimum of five years which is unaltered (status quo remains) per the Payment of Gratuity Act.
The legal interpretation for continuous working days to be applied with a difference between “under the ground” (mining, under the sea, plantations) which is further interpreted as “hazardous job nature”; whereas “above the ground” (other) establishments represents “unhazardous job nature” - the key differentiator for the purpose of deciding the “no of days” of continuous service.
190 days or less than 6 days working per week represents an “employment in hazardous working / occupational hazard jobs by nature” and hence a resultant reduced gratuity eligible days/working days.
This is the intent of the legal script notified under section 2A, 2 (i) within the same clause; if the “number. of working days at less than 6 days” was purported for “any industry” the clause would have been carefully differentiated.
So, any wrong ideation to isolate the clause of “less than 6 working days” is irrational to relate to “above the ground” non-hazardous jobs – Technology / IT / BPO companies fall under this category, they provide “safe jobs” as much five days working was intended for a lifestyle balancing amongst such industry as a “best practice” and not for any occupational hazard-related.
Hence, for Technology / IT / BPO companies, from a computation point of view, any consecutive 8 worked months period post 4 years of continuous service shall make the employee eligible for gratuity. The consecutive eight months computes to 240 paid days.
Note: So far, there has been no case laws notified for the above 190/less than 6 days work week for Non-hazardous jobs (scenario) in both HC / SC; the last being a mandate to adhere to 4 years and 240 days as minimum criteria.
Hope, hereon, all legal intellectual forums, social media forums ensure depth interpretations and not a mislead maneuvers.
From India, Puducherry
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
PF Judgement - SC - Trainee - 2006.doc
Gratuity Madras High court Judgement[1].pd f