25% OFF on all LCI Courses. Offer valid till 5th Oct. Use Code: DUS25
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

L.C.PAL (n/a)     20 October 2007


Dear All,

This is for your information that if an employee have not completed his 5 years, he is eligible for gratuity.

Condition :   If an employee completed his 4 years in service and have completed 240 days in the 5th year then he is entitled for 5 years gratuity.


L.C. Pal



 22 Replies

Prakash Yedhula (Lawyer)     20 October 2007

Thanks for the information.

PBS KUMAR (n/a)     22 October 2007

Dear Mr. Pal ji,

Thanks for your information, if you add as per which sec.of the Act. will be appreciated.




L.C.PAL (n/a)     22 October 2007

Dear All,

The below answer had printed in LLR in the M/o Oct-1998 that :

Section 4 of the Payment of Gratuity Act, 1972 provides that an employee will entitled to gratuity on completion of countinuous service of 5 years and while clarifying the 5 years complete service, Andhra Pradesh Hight Court had held that the minimum period for becoming eligible for payment of gratuity should not be less than 5 years since it should be complete 5 year service.  It was further clarified that the words or part in excess of six months' are only meant for the purposes of computation of gratuity for the subsequent year or years to first complete 5 years.  It was also held that if an employee has worked for 4 years 11 months and 10 days, he will not be eligible for gratuity for want of completion of 5 years.  Further in a subsquent case, MADRAS HIGH COURT while relying upon the clarification by the SUPREME COURT pertaining to 240 working days in one year will be deemed to be continuous serice of one year meaning thereby that there should not be complete 12 calender months' service.  MADRAS HIGH COURT has further held that an employee, who has put in service of 4 Years 10 Months and 18 Days in the 5 years, will be entitled to gratuity.

Case Ref.  :  Mettur Beardsell Ltd., Madras v. Regional Lab. Commissioner (Appellate Authority under Payment of Gratuity Act), Madras etc., 1998 (3) LLN 414.






swetha1983 (n/a)     22 October 2007

Thanks Mr.Pal for providing the information. It will be useful for many people.

indrajeethrkanpur@rediffmail.com (n/a)     27 March 2008

Yes, Gratuity can be paid below 5 years . who work 4 years & 240 days in last means in fifth year is eligible to get gratuity. thanks

DEVAKANTH (EXECUTIVE)     27 February 2010


Please let me know whether this act/law ( eligibility fo gratuity if the emloyee who serves  for a minimum of 4 years& 240 days in fifth year) is applicable for all company.

My company (Public Limited Company) contributes the amount with Group Gratuity Fund and in turn the Fund amount being deposited with LIC of India.

Please let me know whether an employee can claim for Gratuity if he server for a minimum of 4 years and 240 days in the fifth year. Or is it the company's descretion to pay the Gratuity ?



M. Devakanth




Ajay Aggarwal (CFO)     06 March 2010

I have served 4 years and 9 months from my date of joining.Am I eligible for gratuity.I saw some old posts and want to check latest position of law and cases  as it stands today in March 2010

DEVAKANTH (EXECUTIVE)     08 March 2010

I have also got an information that there would be several cases can be filed against employee on the grounds of  code of conduct, mis utilisation of funds or mis behviour in the office premises etc in order to fight against the employee or to calm down the employee.

Is it correct  or not. Please reply.

M. Devakanth




Sweta Jain (Director)     11 April 2010

Dear Mr. Pal,


I had the similar doubt....i got know that if any judgement is passed by the madras court will be applicable only in  that particular state. For all other states only a Supreme Court Judgement will be applicable.

is the above true? if yes than is there any Supreme Court Judgement.

Please reply it is very imp and urgent for me.



Kirit (Consultant)     10 August 2010

What Happens to the contributions made towards gratuity if an employee leaves service before 5 years, say after 3 years?

Kaushik (xyz)     12 August 2010

I have worked in a reputed company at a strech 4 yrs 270 days, but company is not paying me gratuity. Pls advise what type of legal action should I take ?

Isaac Gabriel (Advocate)     14 September 2010

File case with controlling autority.

SK (Software Engg)     24 January 2011

Apart from the useful info already there in  the above posts - I would also like to contribute a detailed treatment of

the sections in the Act from which we can infer that   240 days of service should be considered as one year of continuous service.


As per
Gratuity Act at


the definition of the term “continuous service” in Section: 2 Definitions is as below

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, -

(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness,
accident, leave, absence from duty without leave….
(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 -
(a) 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; and

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

As per this definition, 240 days of service should be considered as one year of continuous service

I have discussed this issue in detail at my blog
https://gratuitypayment.wordpress.com/20 ... typayment/


Chandar Narayan (Accounting and Reporting Lead)     23 April 2011

Is 240 days mean calendar days or working days. I have completed 4 years and 9 months of service as on today. So shall I be entitled to Gratuity although I have not yet completed five years of service

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Post a Suggestion for LCI Team
Post a Legal Query