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Kiranlal   19 January 2022

Gratuity for fixed term contract employee

I am a fixed term contract employee in a private limited company. My contract period is for 1 year. My CTC as per offer letter included gratuity also. And I have resigned from service just 15 days short of completion of contract period of 1 year. So am I eligible for gratuity as per gratuity payments act of Govt of India?


 6 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     19 January 2022

NO. you are not eligible for gratuity. gratuity rules is that minimum 5 years continue working in an establishment.

1 Like

Dr J C Vashista (Advocate)     20 January 2022

Contract employee for 1 year is ineligible for gratuity.

P. Venu (Advocate)     20 January 2022

CTC is only a management tool.

Anaita Vas   21 January 2022

The biggest change brought to the Industrial Employment (Standing Orders) Act, 1946 may be found under Section-53(1)(d) of the Code on Social Security. It provides that gratuity shall be payable on the termination of the contract period under fixed-term employment. The second proviso under the above states that the five years continuous service requirement shall not be necessary in cases of expiration of fixed-term employment. The third proviso to Section-53(2) stipulates that in the case of fixed-term employee’s gratuity shall be paid on a pro-rata basis.

Fixed-term employment defined under Section-2(o) of the IR Code contains a clause stating that fixed-term workers become eligible for gratuity if they render service under their contract for a period of one year.

This might prompt one to conclude that the one-year requirement is applicable only to workers and not to employees. However, the proviso to Rule-35(a) of the draft Code on Social Security (Central) Rules, 2020 provides us with clarity on the same. It clearly states that an employee on fixed-term employment shall be eligible for gratuity if he renders service under the contract for a period of one year.



Anaita Vas


1 Like

Kiranlal   21 January 2022

What about in my case?
I have resigned 15 days short of completion of 1year contract.

Sudhir Kumar, Advocate (Advocate)     22 January 2022


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