Gratuity eligibility - 5 yrs. or 4 yrs. and 240 days
This query is : Resolved
29 March 2012
Hi I completed 4 years & 240 days in my last organisation and then resigned. Am I eligible for gratuity as when I asked HR professional of my company he said completing 5 years is necessary.
29 March 2012
To be eligible for gratuity an employee has to complete 5 continous years of service.
29 March 2012
Thank you for your reply. But
As per
Gratuity Act
the definition of the term “continuous service” in Section: 2 Definitions is as below
Section: 2
Definitions.(b) “completed year of service” means continuous service for one year;
[2] [(c) "continuous service" means continuous service as defined in section 2A;]
Section 2A itself is defined as below
Section: 2A
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 which may be interrupted on account of sickness,
accident, leave, absence from duty without leave….
(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;
As per this definition, 240 days of service should be considered as one year of continuous service.
As per
Gratuity Act
the definition of the term “continuous service” in Section: 2 Definitions is as below
Section: 2
Definitions.(b) “completed year of service” means continuous service for one year;
[2] [(c) "continuous service" means continuous service as defined in section 2A;]
Section 2A itself is defined as below
Section: 2A
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 which may be interrupted on account of sickness,
accident, leave, absence from duty without leave….
(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;
As per this definition, 240 days of service should be considered as one year of continuous service.
29 March 2012
Dear Ruma,
You have referred a wrong section. Please check this:
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:
You have referred a wrong section. Please check this:
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:
29 March 2012
No i have not referred a wrong section, b'coz the section-2 defined the definition of"continuous service".
29 March 2012
Section 2 indeed defines Continuous service but time period for payment of gratuity is defined under Section 4. You must have completed five years of continuous service to receive gratuity.
So you have referred to a wrong section.
So you have referred to a wrong section.
29 March 2012
As per Gratuity Act,
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
Please note that for said period of one year, you must have worked for 240 days. Just by working for 240 days in a year, it will not be one year.
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
Please note that for said period of one year, you must have worked for 240 days. Just by working for 240 days in a year, it will not be one year.
29 March 2012
You mean to say that this 240 days does not include holidays (like company given holiday, Saturday, Sunday, and personal leaves taken by me)?
29 March 2012
i'm explaining you my exact calculation of working days and holidays.
Total working period in 5th year - 259 days including saturday, sunday, holidays given by company and leaves taken by me.
Total leaves taken by me - 9 days
Total working period in 5th year - 259 days including saturday, sunday, holidays given by company and leaves taken by me.
Total leaves taken by me - 9 days
29 March 2012
Please understand this with an example.
If you start your job on 01-Jan-2007, you must complete 5 years of service ( Equivalent to each of them one period of said period), which means you should work till 31-Dec-2011. In each year, you should have worked for at least 240 days.
So the first requirement is one year of said period for example from 01-Jan-2011 to 31-Dec-2011 and in that year you should have worked for 240 days.
But if you work from 01-Jan-2011 to 31-Aug-2011 which is around 240 day, you are not eligible because it is not one year of said period.
One year of said period must be completed. Please note that even if you work for 6 years and don't work for 240 days in three years out of six years ( except for certain reasons), you won't get gratuity.
If you start your job on 01-Jan-2007, you must complete 5 years of service ( Equivalent to each of them one period of said period), which means you should work till 31-Dec-2011. In each year, you should have worked for at least 240 days.
So the first requirement is one year of said period for example from 01-Jan-2011 to 31-Dec-2011 and in that year you should have worked for 240 days.
But if you work from 01-Jan-2011 to 31-Aug-2011 which is around 240 day, you are not eligible because it is not one year of said period.
One year of said period must be completed. Please note that even if you work for 6 years and don't work for 240 days in three years out of six years ( except for certain reasons), you won't get gratuity.
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