Gratuity liability in case employer cease business

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 March 2015 Hello,

Is employer liable to pay gratuity (even if 5 years are not complete for employees) in case employer ceases its business?

Thanks

CA ALOK KUMAR

CA ALOK KUMAR (Expert)
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17 March 2015 Under Payment of Gratuity Act, 1972, 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:
Provided that the completion of continuous service of five years, shall not be necessary where the termination of the employment of any employee is due to death or disablement.So completion of 5 years is basic condition for payment of gratuity.