Gratuity rules
Gayatri Gayatri
(Querist) 10 July 2013
This query is : Resolved
Hi Sir,
can some one help me in understanding
What is the time frame which an individual employee should serve in an organization to get Gratuity amount.
i am confused with some one saying it as 5 years and some one saying it as 4 1/2 years.
Rajendra K Goyal
(Expert) 10 July 2013
The relevant section of the Gratuity Act is as under:
Section: 2A
Continuous service.
For the purposes of this Act, -
(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;
(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than -
(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; and
(ii) one hundred and twenty days, in any other case;
An employee who has put in his service for a period of 240 days in fifth year will be deemed to have continued in the service for 1 year.
Mettus Beardsell Ltd., Madrs Vs. RLC(C) 1998 LLR 1072(Mad)
Advocate M.Bhadra
(Expert) 10 July 2013
Please note the following:- if an employee joins a co. on 1st Aug, 2007 and leaves it on 1st July, 2012. Here, completed year of service will be as follows (if we take into account the definition of completed year of service as one full year):
Duration Completed year
1.8.2007 - 31.7.2008 1
1.8.2008 - 31.7.2009 2
1.8.2009 - 31.7.2010 3
1.8.2010 - 31.7.2011 4
1.8.2011 - 01.7.2012 0 (because he has not worked for one full year)
Does It mean since he has not completed 5 years of continuous service, gratuity is not payable to him as per the Payment of Gratuity Act, 1972.
Now, what is the relevance of "in excess of six months", here? Does that mean 4 1/2 years will be considered as 5 years.
Gayatri Gayatri
(Querist) 11 July 2013
Dear Sir,
I did not understand the conclusion at all.
My organization is having 5 day week. Could you please help me in understanding if 4 1/2 years of service with the organization is enough to get gratuity ?
M.Sheik Mohammed Ali
(Expert) 11 July 2013
I agreed MR. Rajendra K Goyal
the employee should be completed 4yrs and 280 days, its enough for get gratuity
