Payment of gratuity
Johnson S
(Querist) 03 March 2013
This query is : Resolved
Dear Sirs,
I joined a MNC organization on 1st August 2008.
As per the company policy they deposit 1 month's basic salary /yr towrads payment of gratuity.In the appointment letter they have mentioned that Gratity is entitled on completion of 5 years service.
The company observes a 5 day week.Please let me know if I am entitled to Gratuity if I leave this job on the 1st Of April 2013 ie after completion of 4 years & 8 mths. If so how much gratuity will I receive.
Rgds
Johnson
Kumar Doab
(Expert) 03 March 2013
--“if I am entitled to Gratuity if I leave this job on the 1st Of April 2013 ie after completion of 4 years & 8 mths.”
Year 2008 and 2012 are leap years.
Date of reference: 1st Of April 2013
Payment of Gratuity Act, 1972
Section: 2A
Continuous service.
For the purposes of this Act:
Section: 2A
Continuous service.
(1)
(2)
(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;
(b)
(i) ninety-five 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;
Refer to
MetturBeardsell Ltd.(represented by Its Personnel Manager),Madras
vs.
RegionalLabourCommissioner(Central Authority under Payment of GratuityAct).Madras&Others
Page 1075:
5.
Sec 2A as defined in Act is upheld: 240 days continuous service in a year is deemed to be continuous service of one year.
--“If so how much gratuity will I receive.”
“As per the company policy they deposit 1 month's basic salary /yr towrads payment of gratuity.”
Formulae for calculation of gratuity:
Gratuity amount = (Monthly Salary / 26 ) * 15 * Number of years of service
Monthly Salary to be taken as last drawn Basic salary + DA.
-- Section: 7
Determination of the amount of gratuity.
(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.
(If employee is tendering notice of resignation and thus informing the employer his date of retirement, employee may submit FormI a month before his date of retirement, preferably under proper acknowledgment.)
(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined.
(Employer is under obligation to supply the notice to employee.)
(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.
Ankit Jain
(Expert) 03 March 2013
Gratuity shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than 5 years. Thus for an employee to become entitled for the payment of gratuity, he must have rendered continuous service of at least 5 years. The completion of continuous service of 5 years is not necessary where the termination of the employment of an employee is due to his death or disablement.
Guest
(Expert) 03 March 2013
If served the MNC in India, since you have already rendered continuous service of more than 4 years & 240 days (irrespective of whether the office observes 5 days week or 6 days week), you are entitled for the gratuity equal to 5 years.
