Gratuity eligibility 4 yrs 8 months

sudalaimuthu (Advocate) 16 October 2014

your query have a answer here itself

The gratuity eligibility service as per Gratuity Act 1972 is 5 years.

But as per the judgment from Supreme Court below and the quotation from the book quoted below it seems that the gratuity eligibility service is 4 years 240 days.

"Judgment from Supreme Court:

"Yes, by virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."

Quotation from the book:

Law Book (Bare Act,2004) i.e. The Payment of Gratuity Act,1972 (Publisher: Law Publishers () Pvt.Ltd. 18A-S.P.Marg,Post Box-1077,Allahabad-211 001. Phone:623735,623741 Fax-0532-622276.website: lawpublishersindia.com

1. 4 years and 6 months (190 days = 1 year) where the company follows 5 day a week.

2. 4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week.

Is eligible for gratuity.The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.

A company which follows 5 day week

Doj 1.05.2000 -

01.05.2000 to 30.04.2001 - worked for 190 days
01.05.2001 to 30.04.2002 - worked for 190days

If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004 "

Non clarity of this rule has created confusion among a lot of employees. As some hear that some companies are following the 4 years 240 days rule, while some follow the 5 year rule. Please help remove this confusion so that nobody rights of gratuity are being compromised on. Expert Lawyer may please give his comments and advice. .

sudalaimuthu (Advocate) 16 October 2014

see the judgment reported in

METTUR BEARDSELL LTD , Madras vs. REGIONAL LABOUR COMMISIONOR (CENTRAL)-ELIGIBILITY FOR GRATUITY

In this case , the Madras High Court decided about the eligibility of employees who completed 4 year ,10 months and 18 days service for gratuity eligibility under section 2 (a), 2 (b), 2(c),2(e), and 2 A under the Payment of Gratuity Act ,1972.

Section 4 of the Payment of Gratuity Act, 1972 provides that an employee will entitled to gratuity on completion of continuous service of 5 years and while clarifying the 5 years complete service, Andhra Pradesh Hight Court in P. Raghuvulu and Sons v. Additional Labour Court , [1985] , had held that the minimum period for becoming eligible for payment of gratuity should not be less than 5 years since it should be complete 5 year service.

It was further clarified that the words or part in excess of six months' are only meant for the purposes of computation of gratuity for the subsequent year or years to first complete 5 years. It was also held that if an employee has worked for 4 years 11 months and 10 days, he will not be eligible for gratuity for want of completion of 5 years.

Further in a subsequent case, MADRAS HIGH COURT while relying upon the clarification by the SUPREME COURT pertaining to 240 working days in one year will be deemed to be continuous service of one year meaning thereby that there should not be complete 12 calendar months' service. MADRAS HIGH COURT has further held that an employee, who has put in service of 4 Years 10 Months and 18 Days in the 5 years, will be entitled to gratuity.

The gratuity act says continued services . In this case , there is continuity in service.

Further , as per SC , a year means 240 working days.

Since the employee who has completed 4 years 10 months and 18 days is eligible for gratuity as he has put in service of 5 years continuously as per SC explanation.

To , gratuity act is a social welfare act and one should have liberal interpretation offering benefits to employees who had put more than 4 years and but less than in 5 years but falls within 240 days in the 5th year.

SC applied liberal interpretation of the Act and had given benefits to the employee.

Hence , an employee who has completed 4 years 8 months and 18 days continuously without any break is eligible for Gratuity under the Act.

Kumar Doab (FIN) 17 October 2014

This matter and judgments have been discussed in detail in many threads at:

https://www.lawyersclubindia.com/forum/display.asp?cat_id=9&forum_id=49#.VEDdm2eSwb8

e.g:

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

All queries shall be clear by going thru these threads.

samuel 22 October 2015

Hi,

I have joined the organisation on 8th Jan 2007 and resigned on 19 Aug 2011.

Please confirm, am I eligible for Gratuity.

Thanks

Kumar Doab (FIN) 22 October 2015

@ Samuel,

The above mentioned threads explain the matter for yours and similar query.

Go thru the threads carefully.

Probation period, Notice period served, is counted in service period.

Count from DOJ to LWD.

First count No. of years, then no of days in 5th year.

Yes.

If the establishment works for less than 6days/week, as in such case 190 days instead of 240days/year may be taken.

And employer decided to pay by its sweet will.

Pranab Kumar Mahata 04 November 2015

Hi,

I have joined this company in Chennai on 16th March 2011, and resigned on 7th Oct 2015. My last working date will be 4th January 2016. I would like to know whether I will be eligible for gratuity?

Kumar Doab (FIN) 04 November 2015

@ Pranab,

It is simple calculation.

Count from DOJ to LWD.

First count No. of years, then no of days in 5th year.

You should be eligible........................if you have rendered unintrupted service of 240/190 days in a year.

Mrinal 22 December 2015

Hi All,

I chanced upon this thread as I was looking to see if I was eligible for graduity right now in my current organisation. I read through all the posts and comments.

I quit service in my first company with my last day being 18-Apr-10. At that time I was not aware that any duration under 5 years is eligible for gratuity payouts. I see that I have a total of 4 years and 254 days of continous service (Start date - 8-Aug-05 & end date 18-Apr-10) which, according to this thread, makes me eligible irrespective of a 6 or 5 day work week. However, I was not paid any grutuity and the organisation has not cummunicated with me regarding any eligibility either.

This is a reputed MNC with offices around the world and I did not expect them to get the calculations wrong. However, I find this surprising. I wanted to know if I have any room for making a claim on this.

Please advise.

Kumar Doab (FIN) 22 December 2015

@ Mrinal,

The claim is delayed. Although there is no bar by limitation,however you may have to get the delay condoned from authority, if the company does not pay.

If you can get the payment by applying your own skills and/or skills of your able counsel specialzing in labor-service matters, then nothing like it.

Otherwise the company is nliable to make the payment even if you have not applied and also pay interest @10%pa for the delayed period.

tarun kaushal 17 October 2016

Sir, I had joined a PSU bank on 26th march 2012 and date of leaving would be around 23rd dec 2015. So, i am staying in service for 4 yrs and 9 months. I have read that if we have worked for 4yrs and 240days, we are eligible for gratuity. So, am i eligible since i will be completing 4 yrs and 240 days ?? also, what is the procedure for claiming it since i have unofficially asked in my HR department and they say that i wont be eligible since 5 yrs have not been completed.

Please help.

Kumar Doab (FIN) 18 October 2016

@ Tarun Kaushal,

Downlaod gratuity rules of the bank and also confirm that Payment of Gratuity Act,1972 applies to the bank.

If the Act applies employer can offer superior benefits, but not inferior.

Kumar Doab (FIN) 18 October 2016

This matter and judgments have been discussed in detail in this and many threads at:

https://www.lawyersclubindia.com/forum/display.asp?cat_id=9&forum_id=49#.VEDdm2eSwb8

e.g:

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

All queries shall be clear by going thru these threads.

Kumar K 09 November 2016

Hi

i have completed my working experience with 4 years 237 days, i need to know am i elgilble for getting gratuity

D.O.J 26-3-2012

L.W.D 17.11.2016

i am getting confusion between fith year working, whether i am elgible for gratuity or not??

PLease clarify me

Kumar Doab (FIN) 09 November 2016

@Kumar K,

The above mentioned threads explain the matter for yours and similar query.

Make an effort and go thru these threads carefully.

Count from DOJ to LWD. Take into account leap years also.

First count No. of years, then no of days in 5th year.

If the establishment works for 6days/week or less than 6days/week and if you have rendered unintrupted service of 240/190 days in a year, then you are eligible.

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