Eligibility for gratuity

Yes.

yes

As per Payment of Gratuity act, Gratuity shall be payable to an employee on separation from employment due to any of the following reasons, after he has rendered continuous service for not less than five years.

a). on his superannuation or b). on his retirement/ resignation or c). on his death or disablement due accident or disease.

YES. I AGREE WITH ADV.DIXIT.WHY ARE YOU WORRIED WHEN IT APPEARS A LEGAL CLAIM.

Yes,  you will be eligible by that date. Your Gratuity amount will be calculated as below.

1) If have 6 days working week,( one holiday in a week) then Total Gratuity will be

(Basic+DA)X15X5

          26

2)If you have 5 day working week( Two holidays in a week), then

(Basic+DA)X15X5

          22

WHAT IS SUPER ANNUATION? SIR, I AM CONFUSED WITH THIS TERM

Superannuation is a defined contribution plan, is employee's contribution, and Employee can withdraw 1/3 or Superannuation Fund as tax free income and with rest pf 2/3 he has to buy an annuity plan (pension plan), is not a statute, can be withdrawn any time e.g. leaving the company or retiring

Gratuity is a defined benefit plan, is employer's contribution, 100% of the Gratuity amount is Income Tax Free and can be received in one go, is a statute, and can be received only when you complete 5 years of continuous service.

Sir,

As per Gratuity Act the calculation is being done taking month as 26 days irrespective of whether 5 days working or 6 days working.

Will appreciate if could have info on the legal provision/rule/notification if any, specifying the method of calculation by taking month as of 22 days in case of 5 days working.

Best Regards

Sanjay Khandelwal

Sir,

2010 edition of A Practical Guide to Labour Laws by CR Rao, published by of Puliani and Puliani B'lore,page no.309 gives an illustration of as follows.

An Employee drawing an agreegate salary of Rs.1350 per month retires after service of 18 yrs. His service during 2 years in this period was not continuous, the number of days served in those years having been less than 240. The establishment conventionally declares holidays on Saturday and Sunday of every week. Gratuity payable will then be:

Agreegate salary X Fifteen days X Number of Eligible years

No. of working days in a month adopted by the establishment

In the Instant case,

Gratuity= Rs.1350X15X16  =Rs.14727.00

                             22

Pl elucidate.

Sir,

Law provides calculation to be done as  (Basic+DA )X No of Years in ServiceX15

                                                                              26

I could not locate the 22 days as denominator for 5 days working. Kindly share relevant provisions of law/notification/Ruls

Best Regards

Sanjay

Thank you for your valuable suggestion.

With warm regards,

Raj

Hi Sir

Ref: Payment of Gratuity Act, 1972(herein after called as "the Act")

I have worked in an CA firm from 8th September 2006 to 30th June 2011. It is 4 years and 296 days in 5th year of continuous service. There is no break or gap in service during this whole period. I referred the Mettur Beardsell Ltd Vs. Regional Labour Commissioner(central) by Madras High Court, WP No.2135 of 1987 decided on 12.06.1996 (1998 LLR 1072, but the copy available was for final decision and I have not found the copy to refer full facts of the case. Now my queries are:

1.      Whether sub-clause(1) of Sec.2A of the Act is applicable to my case which refers to "continuous service for a period" in this section. Here, how to understand a period, 12 months or 240 days?

2.      Whether sub-clause (2) of Sec. 2A of the Act is applicable to me which says 240 days of continuous service is deemed to be one year of completed service. I have completed service for more than 240 in fifth year, whether it can be considered as 5 completed year of service for Gratuity entitlement ?

 Kindly elucidate and provide any case reference in Karnataka applicable to the above facts.

Regards

N. B. Nesur

Hope this shall be useful:

Section: 2
Definitions.(b) “completed year of service” means continuous service for one year;
[2] [(c) "continuous service" means continuous service as defined in section 2A;]

Section 2A itself is defined as below

Section: 2A
Continuous service.
For the purposes of this Act, -

 (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;
 
 

Most people referring the Act only refer to Section 4 and infer that a minimum of 5 years of service is required for Gratuity – but if seen in light of the previous DEFINITIONS of  continuous service it is clear the Act implies  that 4 years and 240 days/190 days (depending on the number of days the organization works in a week) is enough to satisfy the requirement of continuous service for not less than five years, as stated in above Section 4 – Payment of Gratuity

Useful links:

Gratuity Act 

https://labour.nic.in/clc/PaymentofGratuityAct.doc

and

Rules of Payment Of Gratuity

https://labour.gov.in/act/acts/RulesofPaymentOfGratuity.doc

Sir

Thanks for your valuable suggestion/reply.

But, my previous employer is telling me that the Madras High decision is NOT TENABLE here in Bangalore, Karnataka. I understand that the High Court decisions hold good, unless there is a contrary view taken in other case of same grounds by any other High Court in India or there is superseding decision by Supreme Court of India.

Now, Is my previous employer is correct?

If not, Is there any contempt of court or disregard to the court decision/view?

Kindly let me know the difference between Sub-clause(1) and Sub-clause(2) of Sec.2A. Because, our emplyer is telling me that you are covered under Sub-clause(1) of Sec.2A and hence the deeming of 240 days of service as one year is not correct.

Kindly elucidate the same.

Regards

N.B Nesur