Gratuity eligibility
Ranganadhan
(Querist) 07 September 2011
This query is : Resolved
Hi,
I am working in a Software company. I joined on 19-Feb-2007 and I will be relieved from this company on 21-Oct-2011.
In my appointment letter it is mentioned that "you are eligible for Gratuity amount if you complete 5 years in this company."
And I came to know that some Verdict came regarding this Gratuity Policy. I am not sure about this.
[Note: Saturday and Sunday are holiday in my company]
Will I be eligible for Gratuity?
Thanks,
Ranganadhan
M.Sheik Mohammed Ali
(Expert) 07 September 2011
yes, you must working at least 4 years and 240 days, then only you will get gratuity.
Sailesh Kumar Shah
(Expert) 07 September 2011
if an employee completed his four years in service and have completed 240 days in the 5th year then he is entitled for five years gratuity.
Sailesh Kumar Shah
(Expert) 07 September 2011
Case Law : Mettur Beardsell Ltd., Madras v. Regional Lab. Commissioner (Appellate Authority under Payment of Gratuity Act), Madras etc., 1998 (3) LLN 414.
prabhakar singh
(Expert) 07 September 2011
experts have already explained you now do the required home work on the rule.
Ranganadhan
(Querist) 07 September 2011
Thanks for the prompt reply.
Just one more query. In the fifth year if I work for 240 days, then I'm eligible for Gratuity.
Is this 240 days includes holidays(like company given holiday, Saturday, Sunday, and personal leaves taken by me)?
Thanks,
Ranganadhan
Raj Kumar Makkad
(Expert) 07 September 2011
Holidays are also included while computing 240 days but in your case, 240 days in the 5th year do not complete so there is no use to go ahead as you are not entitled to claim gratuity as per terms of appointment letter.
Ranganadhan
(Querist) 07 September 2011
Hi Raj,
Thanks for the reply.
I joined on 19-Feb-2007 and I will be relieving on 21-Oct-2011.
No. of Years completed = 4 yrs.
No. of days in the 5th year = 9(Feb)+31(Mar)+30(Apr)+31(May)+30(Jun)+31(Jul)+31(Aug)+30(Sep)+21(Oct) = 244 days.
So I will have 4yrs 244 days completed on 21-Oct-2011.
Is my calculation is correct?
Thanks,
Ranganadhan
K.S.Srinivas
(Expert) 07 September 2011
I agree with the experts.
Ranganadhan
(Querist) 30 September 2011
Hi All,
Thank you all for your time for clarifying my
doubt on Gratuity Eligibility.
After your words, I emailed to my finance with the case number provided by you, to our department regarding gratuity. Now they also discussed with their legal, then they agreed that I am eligible for Gratuity since I completed 4years 8 months.
Thanks Once again to you all :)
Ranganadhan
(Querist) 22 November 2011
Hi All,
Now in my company they are saying that I'm not eligible for gratuity although I completed 4 year 8 months.
Since it is mentioned in my offer letter that "You are eligible for gratuity after completing 5 years", my company is not paying the amount.
Please confirm me whether I am eligible or not?
Is the court verdict not applicable to my case?
Thanks,
Ranganadhan
Guest
(Expert) 22 November 2011
Dear Ranganadhan,
Please ask your employer to refer Section 2A of the Payment of Gratuity Act, which clarifies about regular service and clearly speaks about 240 days of a year to be considered as one year for the purpose. The relevant part of the said section is reproduced below for your reference:
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 (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing order, 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 rendered before or after the commencement of this Act.
(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;
Ranganadhan
(Querist) 25 November 2011
Hi Dhingra,
Thanks for the detailed description.
I have attached the Gratuity Policy followed in my company. Please go through that and let me know still i am eligible for gratuity or not.
[Note: One of my friend joined 6 months ealier than me. He got gratuity amount but he did not complete 5 years. Because in his offer letter it is mentioned that "if you complete one year, you are eligible for gratuity". Since our company(Aricent) following what they mentioned in the offer letter, they gave the amount to my friend.
For me it is mentioned 5 years. So I am not eligible. My company is going with the statement in Offer letter]
Please check the attached file and let me know i can claim or not.
Thanks,
Ranganadhan
Ranganadhan
(Querist) 25 November 2011
Sorry I forgot to attach, I am attaching here :)
Guest
(Expert) 25 November 2011
Dear Ranganadhan,
In your case, even the 2nd question of the FAQ of the company itself makes it very clear about completed year, which says as follows:
"Please note that the number of years shall be rounded off to a complete year if it is more than 6 months after completion of service for the number of years specified in appointment letter."
The company should not backtrack from its own policy in your case. Moreover, whatsoever is the policy of the company that should not violate the provisions of the law of the land, which in itself is very clear.
About the case of other fellow, you referred, it can be said that mention of one year instead of five years in his appointment letter must be due to oversight while preparing the appointment letter. The company was obliged to follow its commitment in that case. Further, the Act lays down the barest minimum entitlements, which the company cannot deny to its employees, while company is free to adopt libral terms in its own gratuity policy for employees.
Ranganadhan
(Querist) 05 December 2011
Hi Dhingra,
Thanks for giving some tips to claim my gratuity. Sorry for my late reply.
"Please note that the number of years shall be rounded off to a complete year if it is more than 6 months after completion of service for the number of years specified in appointment letter."
As per my understanding the above statement means that "If it is more than 6 months, then they will round it to 1 year provided i should complete 5 years which is mentioned in my offer letter". If i did not complete 5 years they will not round up to 1 year.
For example
* if i complete 5 years 8 months, they will round it to 6 years.
* if i complete 4 years 8 months, they will not round it to 5 years.
Please clarify this.
-----------
Also I have one more evidence which is Gratuity claim form which was gived to me by my company. I have attached with this.
In that form, It is mentioned that
"I have not received any gratuity payment under Payment of Gratuity Act 1972 from any of my previous employers till date."
It means that they are following Gratuity Act 1972.
Does "Gratuity Act 1972" say 4 years 8 months can be rounded to 5 years?
Thanks,
Ranganadhan
Guest
(Expert) 05 December 2011
Dear Ranganadhan,
I have already reproduced the provisions of the Payment of Gratuity Act, accoding to which the period of 240 days would count as one year for the purpose of counting of a fraction of a year to calculate eligibility period for claim of gratuity.
This is the minimum basic requirement, whereas there is no bar if any individual company's rules are more generous than the provisions of law. If your company provides for counting of any period more than 6 months as a year that would apply in your case. Even in that case 4 years and one day can also be counted as 5 years.
Your presumption about 4 years and 8 months, as 5 years is correct as per the Payment of Gratuity Act.
Asking for any information as per the Gratuity Act, denotes your company is following their own Gratuity Rules, but in consonence with the requirements of the Gratuity Act.
Ranganadhan
(Querist) 06 December 2011
Thanks Dhingra.
One point(show below) I am not clear in your previous message.
"Asking for any information as per the Gratuity Act, denotes your company is following their own Gratuity Rules, but in consonence with the requirements of the Gratuity Act."
* What does the above sentence mean?
* Is my company following "Govt Payment of Gratuity Act Law" or "their own law"?
* Can I e-mail to my company asking for my gratuity amount or not? If I can claim, could you please summarise the points i can put forward to my company?
Please forgive me if I disturbing you much as I don't have much knowledge on law.
Please help me.
Thanks,
Ranganadhan
Guest
(Expert) 06 December 2011
The sentence means your company is following its own rules, but is also taking care that the provisions of law are not violated.
Ranganadhan
(Querist) 07 December 2011
If my company follows its own rules, then I am not eligible for my gratuity since i didn't complete 5 years.
If my company following law, then I am eligible for my gratuity since 4 yrs 8 months sufficient to claim gratuity.
Both are contradicting.
Can I claim or not?
Thanks,
Ranganadhan
Sailesh Kumar Shah
(Expert) 07 December 2011
You can 'legally' claim it and 'legally' no one can deny this.
Ranganadhan
(Querist) 07 December 2011
OK. Thanks Dhingra and Shailesh.
I will send out mail to my company and let you know their response.
Thanks,
Ranganadhan
Guest
(Expert) 07 December 2011
You are welcome. Your company does not have any authority to discard provisions of law of the land. It will have to abide by the definition of a year for the eligibility criteria as provided in the Gratuity Act.
Ranganadhan
(Querist) 07 December 2011
Hi Dhingra and Shailesh,
I mail to my company and their response was:
"Hi Ranganadhan, As per your offer letters terms & condition , Gratuity is payable after completion of 5 years only and at Aricent in which you were rendering services is following 5 years service basis strictly for all the employees. Your service period being less than 5 years could not have succeeded even then also even if you would have filed the same in time. Aricent therefore cannot entertain such application which was not valid. You are advised in your own interest not to pursue such claims which are not sustainable under the law. Still you claim, it will be defended at your own costs and risks. Hence your claim cannot be processed."
That was the reply. What to do now?
Thanks,
Ranganadhan
Guest
(Expert) 07 December 2011
Dear Ranganadhan,
We have already explained legal position provided in sec.2A. In view of the law position their stand of full 5 years of service may not stand. Now it is up to you to decide in consultation with ny local advocate what you want to do or not to do.
Sailesh Kumar Shah
(Expert) 07 December 2011
Dear Ranganadhan,
You have to hire services of local lawyer to proceed further.
