Gratuity eligibility

Similar query has been discussed many times at:

https://www.lawyersclubindia.com/forum/display.asp?cat_id=9&forum_id=49

e.g;

https://www.lawyersclubindia.com/forum/Clarity-between-gratuity-eligibility-service-5-or-4-8-yrs--28768.asp

You may go thru these.

Under Section 4 of the payment 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 5 years. 

Termination of employment may result from

1. superannuation, 
2. retirement, 
3. resignation, 
4. death, 
5. disablement due to accident/disease. 

Continuous service is defined under section 2-A, means a period of uninterrupted service including service which may be interrupted on account of 

1. sickness, 
2. accident, 
3. leave, 
4. layoff, 
5. strike, 
6. Lockout, 
7. cessation of work not due to any fault of the employees and 
8. Absence from duty without leave(not being absence in respect of which an order treating the actions as break in service has been passed in accordance with d standing orders, rules or regulations governing the employees of the establishment). 

As was held in the case of Dalmia Magnesite Corporation vs regional Labour Commissioner Madras if this service is interrupted for reason other than mentioned above it shall be deemed has not been continuous service. 

Where an employee not being an employee employed in a seasonal establishment is not in continuous service for any period of 1 year, shall be deemed to be in continuous service under the employer if during the period 12 calendar months preceding the date with reference to which calculation is to be made, he has actually worked under the employee for not less than 190 days in the case of an employee employed below ground in a mine or any establishment which work for less than 6 days in a week and 240 days in any other case. Under clause 2 of section 2A when determining the continuous service for any period of 6 months rather then 1 year for Payment of Gratuity, the number of days the employee should have actually work should be half the number of days actually work which constitutes continuous service for a period of 1 year. What this means is if we are calculating gratuity for a period of 6 month rather than 1 years then 190 days will be replaced by 95 days and 240 days will be replaced by 120 days.

Originally posted by : P Sarkar
	Dear Sir/ madam, I have been working for a company which is operating in NOIDA,UP.  I joined this company on 04-Jul-2011 till 30-Jun-2012, I was on contract, [meaning I got fixed consultantion fee, daily allowances (when I am deputed outside India)], did not have any gratuity, PF at that time. The company regularised my service on 04-Jul-2012, as employee and my PF, gratuity started. I am leaving this company for better oppurtunity on 03-April-2017.   Now , I have two questions, 1. Am I eligible for gratuity? [ Is it exactly 5 years or 4 years 240 days?] If you have worked for 4 years and 240 days, you will be eligible for gratuity. 2. When I get gratuity, my contract service will be counted or not? [ Because Gratuity act do not differentiate between employees on contract or payroll]  If there is no break in service, it will be added. But looks like there is a gap between 30 Jun 2012 to 4 July 2012, In order to understand the exact situation, your initial appointment/ contract, subsequent regularisation letter, salary slip/ structure of both periods etc. need to be considered.

Replies in bold.

We.f. Dated: 04-Jul-2011 to 30-June-2012, it was contract for service or contact of service?

Or You were employee or not?

For payment of Gratuity the relationship should be of Employer-employee.

We.f. Dated: 30-June-2012 to 03-Jul-2012 was you with same establishment?

During this period also: You were employee or not?

The establishment works for 6days/week or less than 6days/week?

Dear LCI Querist @ Mansur Ahmed f

You will be certainly eligible if employer has states so in writing in appointment letter / any communication or any settlement/agreement with you/employees.

Employer can pay by its sweet will;refer;Payment of Gratuity Act;S;4(5)