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Ramkumar (Senior Manager)     07 December 2013

Clarification on clause (2) of payment of gratuity act 1972

Dear Sir

With reference to Clause (2) of Payment of Gratuity Act 1972 - Please provide me a clarification whether the employee has to be "employed  for 12 Calendar months in his 5th year of Service" while it is suffice to work for 190 days in that last 12 months, if the organization works less than 6 days in a week?

Does this clause mean effectively I have to be 'employed' for 60 months (& in the last year I should have worked for a minimum of 190 days)

(Or) If I have worked for 4 years and 252 days it will be suffice to be eligible for Gratuity? 

As advised in this forum, I have sent FORM - I (scanned copy) to my former employer by email and awaiting their response.

Kindly clarify to enable me to take further course of action

Ram Chennai

 


The Payment of Gratuity Act, 1972 CLAUSE (2)

Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer- 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;

(ii) two hundred and forty days, in any other case:



Learning

 3 Replies

Kumar Doab (FIN)     07 December 2013

Other thread by querist:

 

https://www.lawyersclubindia.com/forum/Eligibility-for-gratuity-in-chennai-jurisdiction-89590.asp#.UqLPBNIW1MA

 

Instead of sending scanned copy of FormI submit the original under proper acknowledgment.

 

It is felt that employer has not reverted to email by which you have supplied the scanned image.

 

Payment of Gratuity Act is a statue; the provisions of the Act are statutory and it is statutory obligation of the employer to determine the Gratuity in time and supply a notice with a copy to Controlling Authority, even if employee has not lodged a claim.

 

Section: 7
Determination of the amount of gratuity.

(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined.

Since the employer has not supplied any notice of determination you may be eligible for interest @10%pa or more as determined by the govt.

 

(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

>> The employer may determine the Gratuity as per formulae of calculation of Gratuity however as per judgments the entire amount held in Gratuity a/c of the employee must be paid even if amount determined by  formulae of calculation of Gratuity is less than amount employer ha received from LIC or other FI from which employer has obtained compulsory insurance (Sec4A of the Act).

 

 

 

 

 

 

 

 

 

 

 

Ramkumar (Senior Manager)     03 February 2014

Respected Sir -- Please find the email reply from my former employer, stating that Sundays are NOT included in employment period thus I am short of required 240 days in my 5th Year of service.
 
Kindly guide me whom I should approach in Chennai and necessary steps to be taken
 
Thanking you
 
Dr Ramkumar P

mail from my former employer....

Dear Mr Kumar,

 

Please note the following as per the payment of Gratuity Act.

 

1. Qualifying period for the Gratuity Payment is 5 years, but an employee rendering continuous service for a period of 240 days in the 5 year is payable.

 

2. The Gratuity calculation basied on 26 working days (i.e.exculding Sundays  Last drawn basic/26  *15 (15 days salary for every completed year of service)  * no of years of service).

 

In the light of the above, your working days inlcuding leave, weekly off and holidays (national & festivel) on the 5th year i.e. from 3rd November 2012 to 12th July 2013 (till your date of leaving with us) are given below fo your reference. 

 

 

Actual days worked            150 days   

Leave availed by you           26 days

National and Festival

holidays                               5 days

Saturdays                           35 days

 

Total                                  216 days

 

You have not completed the required service for qualifying the Gratuity payment. The shorfall period is 24 days.

 

Please note and if you need any clarification, kindly revert.

 

Regards,

 

T LN (for the company)

Kumar Doab (FIN)     03 February 2014

 

 

Approved leave is counted in period of service.

 

 

 

 

Section: 2A: Continuous service (1)

You have already noted and understood yourself that if compnay works for 5days/week the number of days to be counted is 190 and not 240 days.

 

 

 

It has already been pointed out in other thread initiated by you that;

 

The employer should pay gratuity within 1 month or you can approach Controlling Authority of Gratuity.

 

You may decide which appropriate government in your case is: State or Central and accordingly you may approach the authority as in your case.

 

You may approach a local labor consultant/service lawyer. Your lawyer may opine that Section clarifies continuous service shall include all sanctioned leave, all paid days that included 2 weekly off also as in your case, as days worked.


You may proceed under  expert advice of your lawyer.

The lawyer that has seen all of your docs, records and has analysed your inputs can advice you the best.

 

 

There are many threads on Gratuity at LCI, you may go thru these………….at:

 

 

https://www.lawyersclubindia.com/forum/display.asp?cat_id=9&forum_id=49#.UiihKNKAqWM

 

 



e.g;

https://www.lawyersclubindia.com/forum/Clarity-between-gratuity-eligibility-service-5-or-4-8-yrs--28768.asp

 

 

 

 

https://www.lawyersclubindia.com/experts/Gratuity-law-420856.asp#.UkmWjdKAqWM

 

 

 

 

 

 


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