Query related to eligibilty for gratuity
Munish Thakur
(Querist) 06 January 2011
This query is : Resolved
My company has a policy of 2 months notice period so keeping that in my mind i resigned on such a date that my 5 year completion date falls within this period and i get the gratuity as well as complete my notice , but my company has decided to relieve me of duties within 1 month , so that i dont complete my 5 years and miss my gratuity by just 20 days.
what can i do ? I wud complete 4 years 345
days by then but because of their act i will miss my gratuity by 20 days for no fault of mine. can anybody help.
Ajay Bansal
(Expert) 06 January 2011
You may withdraw your resignation at this stage and submit another after completion of five years.If you don't want to withdraw it then either file a writ in High Court or file a civil suit in Civil Court for obtaining a stay against your relieving in question.
Amit Minocha
(Expert) 06 January 2011
whether you appointment letter had a clause of relieving within 30 days and that too on your resignation (mind it i am not talking of termination). If they plan to relieve you against your consent send them a strong protest letter seeking salary of both months despite all benefits including gratuity etc. which would have accrued to you if you completed 2 months. Further, I don't think and completely disagree that withdrawal of resign and subsequent submission is a good solution , you may develop other complications in your case.amitminocha@yahoo.com
Munish Thakur
(Querist) 06 January 2011
Thanks Ajay and Amit for your valuable advice.
I did check and they do have a clause where
they can relieve you earlier on your resignation but in that case they promise to pay the salary equivalent of forced shortfall in notice period and there is no mention of anything else.
Will that be applicable to accrued benefits like Gratuity?? Can i push them on this or there is no legal way of redressing this.
P.ESAKKIMUTHU
(Expert) 07 January 2011
It is suffice if you worked 240 days of service during the fifth year of your service to be eligible for getting gratuiry.
P.ESAKKIMUTHU
(Expert) 07 January 2011
THE FOLLOWING NEWS ITEM MAY BE REFERRED
Clarity between gratuity eligibility service (5 or 4.8 yrs)?
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. .
Munish Thakur
(Querist) 08 January 2011
Thanks Sir for the information.
I will chase my company with all the facts you have put forth , hopefully they will budge.
