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Madhusudan Rao (Sr.Manager)     12 April 2012

Is gratuity payable for the service of 4 years 8 months

I have Joined a company on 1-8-2007 and submitted resignation letter on 11-1-2012 requesting me to relieve on 31-3-2012. Company relieved me on 31-1-2012 itself  and afgreed to pay full salary for the rest of notice period to me.

Comapny also recoved 10 days salary because I have given only 80 days notice period.

It means while settlling they have paid salary upto 31-3-2012 i.e. exactly coming to 4 years 8 months service.

Company not paid the gratuity. Am I eligible for the gratuity or not?

 

regards,

Madhu



Learning

 26 Replies

Narayanarao Murali (Advocate)     12 April 2012

Dear Mr.Madhusudhanarao

Only after completion of 5 years continuous service an employee becomes eligible for gratuity amount @ 15 days salary for every year and after years.  The minimum period is 5 years.

1 Like

Dipankar Ghosh (N/A)     12 April 2012

Yes you are eligible.. 4yr 6 mnths is treated as 5 yrs... As per gratuity act.
1 Like

Manindra Singh (Chief Manager IR)     12 April 2012

If You are in Tamilnadu, and have completed 4 years and 240 days; then you have a case and you can approach the employer or the DLC of concerned area for payment of gratuity. This as per Madras High Court Judgment.

 

If you are not, then unless you have completed continuous service of 5 years you are not eligible for payment of gratuity.

 

Thanks.

1 Like

Manindra Singh (Chief Manager IR)     12 April 2012

You are right to the extent that 6 months and above is considered as full year for calculating the Gratuity amount payable. Thus, if some one has worked for 7 years and 8 months, he will be entitled to gratuity payment for 8 years. But, if he has worked for 7 years and 4 months, he will be entitled to gratuity payment for 7 years only.

However, to become eligible for payment of Gratuity, the employee must have completed continuous service of 5 years.

 

Thanks,

Kumar Doab (FIN)     12 April 2012

Mr. Ghosh has clarified that you should be eligible for gratuity.

In your appointment letter the notice period must have been mentioned. In the notice of resignation you must have mentioned effective date of resignation. If the company accepts resignation before effective date of resignation, it can be termed illegal and you can contest it. You should protest and agitate upon your acceptance of resignation before effective date of resignation.

Did you accept FNF statement and settlement? Usually, the company provides FNF statement and ask the employee to accept the same. Usually it is mentioned that if acceptance is not supplied on the copy of FNF statement, with in a month it shall be deemed to be accepted. If you have not supplied the acceptance and company has supplied the payment you may submit a representation in writing under acknowledgment, mentioning that the FNF statement and settlement is not correct and hence not acceptable to you, and you have received the payment under protest.

Notice period served is counted in service eligible for gratuity. Your company has accepted the resignation before effective date of resignation to deprive you from gratuity. You must agitate.

If your company follows 5days/week, then you should have served for 190 days in a year.

Fraction of year exceeding 6 months is considered as an year.

Section: 2A
Continuous service.

For the purposes of this Act, -

(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;

(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than

Thus you should be eligible for gratuity.

 

You may go thru another thread in which detailed discussion has been made and learned experts and members have explained the eligibility for gratuity.

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

 

Forum Home > Labour & Service Law > Gratuity > Clarity between gratuity eligibility service (5 or 4.8 yrs)?

You must approach a competent and experienced service lawyer and submit a carefully drafted representation addressed to good offices of your appointing authority, MD, Company Secretary with a copy to Head-HR, by letter under acknowledgment, and demand a reply in writing under original seal and signature by hand of good offices by redg/speed post only so as to reach you say in next 7 days. You may mention that postage prepaid, self addressed envelope is enclosed. You may avoid communicating by email. Usually all personnel in the company including HR executives are not authorized to sign on letterhead with company seal. Thus your letter shall be replied by someone competent and responsible to represent good offices. It is seen good offices won’t like to tarnish the credibility and image of good offices for minor amounts of gratuity and other payouts. At times some personnel may try to prove to be worthy for the company by blocking the payouts by entangling the employee in legal traps or by taking undue advantage of an ill informed employee. These personnel shall usually refrain to reply in writing and limit the transactions to verbal mode. Employee should record such transactions (audio/visual).

Kindly remain gentle and amiable but firm while you deal with employer for your rights.

 

 

 

 

Kindly look into the attachments.


Attached File : 736381150 13 13 gratuity 20 20madras 20hc 20judg 5b1 5d 1 .pdf, 736381150 paymentofgratuityact(1).doc downloaded: 976 times
1 Like

Madhusudan Rao (Sr.Manager)     13 April 2012

Thanks for your kind clarification and suggestions.  I am yet to receive my FNF statement and company also not settle the amount so far. Company relieved me without relieviong letter.  I am still waiting for my Final statement and settlement.

thanks.

Madhusudan

Kumar Doab (FIN)     13 April 2012

Has the company acknowledged the receipt of your notice of resignation and acceptance of your resignation, both in writing by letter? Has the company relieved you by preponing effective date of your resignation in writing?

Has the comapny "Company relieved you on 31-1-2012" in writing?

Did the company issue any written communication to you to submit company property and to handover the charge?

If yes do you have the copies and have you forwarded the emails to your personal email id?

Or all transactions are by verbal mode? If yes you have been taken for a ride. Company can treat you as absent also.

On the strngth of which document you have mentioned that "Company relieved me on 31-1-2012 itself  and afgreed to pay full salary for the rest of notice period to me.Comapny also recoved 10 days salary because I have given only 80 days notice period." How would you establish that company has recovered 10 days salary if no FNF statement has been issued and no settlement of a/c has been performed?

It shall be appropriate to approach a competent and experienced service lawyer as ap with a copy of your appointment letter, employee rule book, certified standing orders, SE act, any other record and give inputs in person, and submit a carefully structured representation to good offices and build record in your favor.

Madhusudan Rao (Sr.Manager)     13 April 2012

Thanks Mr Kumar,

I have handed over all stuff back to the department and submitted NO DUES CERTIFICATE to HR on 31-1-2012 as per their advice and they have also arranged farewell on 31-1-2012.

I came to know from HR verbally that they have deducted 10 days salary and paid 50 days full salary only and the gratuity not given. Relieving letter also not issued yet.

Things will be clear in a couple of days as they are going to release the amount along with FNF statement.

I have the copy of my resignation letter as of now.

Thanks for your kind advice.

regards,

Madhusudan

Sharad (Company Secretary)     31 May 2012

As per one old Supreme Court judgement, if an employee completes atleast 4 years 240 days of service, he is eligible for gratuity.

MAHESH SINGH (SR. HR EXECUTIVE)     11 June 2012

Dear Madhu,

You are eligible for gratuity  after completion of 4 yrs and 8 months. If your employer is not paying you gratuity you can approach to Deputy Labour Commissioner and employer hasto pay with interest.

MAHESH SINGH

dev (Engineer)     20 June 2012

HI I worked in my company for 4 years and 6 months.......than I fell ill....company sent me on leave with out pay for 4 months.....finally they asked me to leave with 2 months of compensation package (very generous indeed).......now if I add all this (4 year 6 months job+4 months leave withput pay+2 months compensation) it comes out to be 5 years.......am i eligible for gratuity or not?

Kumar Doab (FIN)     20 June 2012

Apparently you should be eligible.

 

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 (not being absence in respect of which an order [***] treating the absence as break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.


Attached File : 53266726 paymentofgratuityact(1).doc downloaded: 101 times

PBS KUMAR (HR - PROFESSIONAL)     22 June 2012

Dear Experts,

I have gone through all the interpretation on Gratuity. Further I have doubt. 

Only a person who has completed 5 years of service only he get the Gratuity. In Madras Court Judgement says  even if a person  xx years 8 months also eligible, if a person put complient to the Labour Department then only that person will get the Gratuity but there is no Gazette Notification after the Madras Court judgement "saying the a person will be eligible Gratuity 4 + months service.

Please correct it me.

Regards,

PBS KUMR

Kumar Doab (FIN)     23 June 2012

Section: 4
Payment of gratuity.

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

 

 

Take the Date of Reference from above.

Section: 2A
Continuous service.

(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;

(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than -

(i) ninety-five 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) one hundred and twenty days, in any other case;

Hence the act is clear.

Madras HC judgment has made precise interpretation.


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