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Shankara Goud (Golfer)     08 May 2010

Am I eligible to Gratuity?

I served for an Organization continuously for 5 year 53 days and quit for personal reasons.

  1. For the first 2 years, I was on fixed term contact. as per my contract, I was paid "Gratuty in lieu benefit @ 6%"  (as mentioned in appointment letter) along with every months salary.
  2. after the first 2 years, my fixed term contract was converted into indefinite contact and mentioned  "As a result of this change in employment status, you will become member of the new gratuity scheme. 6% of your basic salary will be contributed towards this fund, which will be playable as a terminal benefit. Hence, the payment being made to you  in-lieu of gratuity will be discontinued."

I am I eligible for gratuity for 3 year period? OR Eligible for 5 year but first 2 year 'paid gratuity' will be deducted? OR ????

Can anybody reply to this issue?

Thanks in advance

Banda Shankar



 5 Replies

Isaac Gabriel (Advocate)     09 May 2010

Gor payment of Grastuity, the service period must be not less than 5 years. Here, though you have put in 5 years, the first two years were covered by 6% pay in llieu og gratuity under fixed term contract, the remaining 3 years do not qulify for Gratuity.

jagadish paranjape (Advocate)     09 May 2010

Yes,You are entitled to gratuity for five years.If after two years of fixed contract service,

your service was continued without interruption,then whole five years would be contineous

service.Since you became entitled to gratuity only after completion of five years,the amount

paid to you earlier as gratuity has no consequence.Gratuity can not be paid in advance,before


Sanjay Agarwal (Dy. General Manager [HR])     10 May 2010

Dear Mr. Bandhu Shanker,

Eligibility of Gratuity : An employee who has completed continuous service of 05 years with an organisation is eligible for the gratuity. In case you have served more then 05 years definately you are eligible for entire period based on your continuous service every year [240 days ]. which includes 02 years on contractual period if it is in continuation of further service.

Discontinuing earlier paid 06% in lieu of gratuity will be a matter of other law.

P. Selvam (Manager - HR)     10 May 2010

Dear Mr. Shankar,

You clearly mentioned that you were paid along with your salary towards "Gratuty in lieu benefit @ 6%" for two years and then converted into regular / indefinite contract. Based on your statement of declaration, you are surely eligible for Gratuity no doubt about that. But you should not consider your definite period of service of two years.  Becuase you already been paid by the employer with your monthly salary.

P. Selvam


Shankara Goud (Golfer)     07 July 2010


I am very much greatful to and all those who given their valueable suggestions. I  used the given suggesions quoting the URL ( ) in a mail to my authories for claiming gratuty. Now my authorities agreed to pay gratuty for 3 years with which I am happy.

I will be happy to share this forum with those in need

Thank you

Banda Shankar

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