Gratuity benefits clarification

4years 240 days is enough for claiming gratuity.

The term "Completed Year of Service" means continuous service for ONE year.

An employee is said to have rendered continuous service, if -

1. He has been in uninterrupted service, including service interrupted by sickness, accident, absents from duty with or without leave, lay-off, strike, or lock-out or cessation of work not due to the fault of the employee. [Note: if an employee having been superannuated is re-employed by the employer without any break in service, he will be eligible for payment of service]
2. In case of mine or non-seasonal establishment working for less than SIX days in week, he has actually worked for at least 190 days [in Mine] during the period of TWELVE months or 95 days, during the preceding SIX months, he shall be deemed to have rendered continuous service for a period of ONE year or SIX months, respectively.
3. In a case of any other non-seasonal establishment, he has actually worked for at least 240 days during the preceding 12 months or 120 days during the preceding SIX months, he shall be deemed to have rendered continuous service for a period of ONE year or SIX months, respectively.
4. In a case of a seasonal establishment, he has actually worked for at least 75% of the days on which the establishment was in operation.

For this purpose, an employee shall be deemed to have worked on a day on which:

1. He has been laid-off under an agreement or in accordance with standing orders;
2. He has been on leave with full wages, earned in the previous year;
3. He has been absent due to temporary disablement caused by accident arising out of, and in the course of his employment, and
4. In the case of a female, she has been on maternity leave not exceeding TWELVE weeks.

In order to explain it better, we have compiled a list of frequently asked questions along with answers.

FAQ-1 Natasha joined ABC Limited on 2nd June 2003. She was on maternity leave from 1st September 2006 to 31st March 2007. After delivery of her baby, she decided to take a break for one year. She joined back the company on 1st April 2008. Eventually, she resigned on 15th September 2011. Will she be entitled to Gratuity?

Answer: NO, she is not entitled to Gratuity. Even though she joined the company on 2nd June 2003, however, she took a break of ONE year. After re-joining the company on 1st April 2008, she didn't complete the minimum required continuous service of FIVE years and hence not entitled to gratuity. Her second stint with the company will be considered as new employment.

In this case, for calculating the eligibility, you must consider the following -

1. Was she on company roll during her break of one year?
2. Has she been paid during her break?

If and only if, your answer to both questions is yes, then only she will become eligible for gratuity and her gratuity shall be calculated for EIGHT Years.

If you have worked for atleast 240 days in the 5th year, then you are entitled to gratuity.