Gratuity calculation
SANGEETHA
(Querist) 01 February 2014
This query is : Resolved
A person retired on 31/10/2013. He was on loss of pay from 01/05/2012 till his date of retirement. The salary drawn by him on 30/04/2012 was 50000/-. If he had attended office, he would have drawn a salary of 55000/- on his date of retirement i.e.31/10/2013. Please clarify which salary should be taken as last drawn salary for calculation of gratuity. Please provide case laws if any, in this regard
Kumar Doab
(Expert) 01 February 2014
Payment of Gratuity Act, 1972
Section: 2: Definitions.
(s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which arc paid or arc payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
Section: 4: Payment of gratuity
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned
Thus wages for the purpose of calculation of Gratuity are Basic+DA as per last drawn salary as per last pay slip or salary certificate.
At the time of retirement has his last salary been determined?
You have posted that “If he had attended office, he would have drawn a salary of 55000/- on his date of retirement i.e.31/10/2013.”
Is there any published service rule to this effect?
Can the person obtain salary certificate certifying his last salary as Rs.55000/pm?
If yes he should get it.
If there is any citation and case law as desired by the querist, it may please be quoted in this thread. It shall benefit everyone.
V.T.Venkataram
(Expert) 02 February 2014
Please note that"---- the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned". Hence the last salary ACTUALLY DRAWN-namely Rs 50000/- is to be taken into account
P. Venu
(Expert) 02 February 2014
Was this person in public service? If so, was he he on LWP on medical certificate?
T. Kalaiselvan, Advocate
(Expert) 05 February 2014
Loss of pay from 01.05.2012 but retired on 31.12.2013, if it was leave without pay then the last drawn salary will be taken for consideration.
