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BDRchandan (HEAD-HR)     19 November 2011

Gratuity

One of our employee who was working with us since 01.01.2001 has resigned on 17.08.2011. How should we calculate the gratuity.

From 01.01.2001 to 31.12.2010 = 10 years

From 01.01.2011 to 17.08.2011 =  228 days (Not completed 240 days and he was also absent for 90 days during this period)

Should we give him last year gratuity?

Looking for your valuable advise.

regards



Learning

 5 Replies

Sankaranarayanan (Advocate)     19 November 2011

what it mean  normally the gratuity  is pay while settlement and after resigned the work or completed their service.

BDRchandan (HEAD-HR)     19 November 2011

yes he had resigned on 17.08.2011. I am asking for 2011 gratuity? 

AVINASH PANDEY (ADVOCATE)     19 November 2011

As per provision of Payment of Gratuity Act, he entitled for gratuity for 11 years. relative provisions are as under--

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

(c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.]

Explanation. : For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he, was capable of performing before the accident or disease resulting in such disablement.

(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned:

Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account.:

Provided further that in the case of [an employee who is employed in a seasonal establishment and who is riot so employed throughout the year], the employer shall pay the gratuity at the rate of seven days wages for each season.

Explanation: In the case of a monthly rated employee, the fifteen days wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.

 

is it clear?

Kirti Kar Tripathi (lawyer)     19 November 2011

you have to pay gratuity for 11 years as in the last yeaer, he worked more than 6 months Salary X 11X15 devided by 26 


(Guest)

Calculated as per qualifying service with a clause of Undue Hardship.


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