Gratuity eligibility

yuvaraj H S (Querist) 06 August 2021 This query is : Resolved
Hello Experts

My query is about gratuity eligibility. I am working in MNC company at Bengaluru, I am in notice period now.

I am working for 5days in a week.

For my last date 20August 2020. I will complete 4year 6 month 20days.

When I apply my resignation date 25may2021 company policy is 4year 190days for gratuity eligibility.
But few days after Policy has been updated to 4 year 240days gratuity eligibility and the company will announce the effective date from 1st July 2021.

If I asked to my HR about my eligibility for gratuity, they communicated that I am not eligible for gratuity.
Reason is I have complete the 4years 240days.

Please let me know Am I eligible to get gratuity?

Please give a suggestion what I can do to get gratuity?

Thanks and Regards
Yuvaraj

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Quick Summary

This discussion clarifies gratuity eligibility according to the Payment of Gratuity Act, 1972. The key requirement is completing at least 4 years and 240 days of continuous service. The Act supersedes any company-specific policies. If your service period, calculated as part thereof exceeding six months for each completed year, meets this threshold before your resignation acceptance, you are eligible for gratuity.

kavksatyanarayana (Expert) 06 August 2021
As per the gratuity act, one should complete a tenure of a minimum of 4 years and 240 days.

Advocate Bhartesh goyal (Expert) 07 August 2021
Before acceptance of your resignation,if you complete 4 years 240 days service, then you are eligible to get gratuity else not.

Dr J C Vashista (Expert) 07 August 2021
On completion of 4 years 6 months and 20 days of service (it do not affect 5 / 6 days working) you are eligible for gratuity in terms of Section 4(2) of the Gratuity Act, 1972 which reads as:
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Section 4. Payment of gratuity.

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,--
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
1[Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.]
Explanation.-- For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(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:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of 2[an employee who is employed in a seasonal establishment and who is not so employed throughout the year], the employer shall pay the gratuity at the rate of seven days' wages for each season.
3[Explanation.-- In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
(3) The amount of gratuity payable to an employee shall not exceed 4[5[such amount as may be notified by the Central Government from time to time] .]
(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) Nothing in this section shall affect the right of an employee receive better terms of gratuity under any award or agreement or contract with the employer. (6) Notwithstanding anything contained in sub-section (1),--
(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee 6[may be wholly or partially forfeited]--
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
7* * * * *

yuvaraj H S (Querist) 08 August 2021
Hello experts,

Thank you for valuable information.

As I understood I am eligible for 4year 190days.

I will convey to my HR to refer the " A1972-39_0_gratuity document section 2A and Section 4.2" to understand.

Thanks and regards
Yuvaraj

P. Venu (Expert) 11 August 2021
Eligibility as well payment is based on the provisions of the Payment of Gratuity Act. There is no question of any employer devising their own policy.

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