Dear Mr. Kamal Kant Tyagi,
I would like to quote our Sr. Moderator Mr. J.S. Malik's reply to the same subject on some other postings for your ready reference.
Gratuity is applicable only after 5 years of completion of service in the same organization by any employee.
The 240 days calculation is only from the 6th year onwards.
Regards,
Sundararaman
QUOTE
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JS Malik - Senior Moderator in Cite HR
Subject - Re: gratuity calculation
dear
your husband has not completed 5 years of service ,so he is not entilte to get gratuity.
some people says after the judgement of madras high court that if individual has completed 240 days
in fifth year ,than individual becomes entilte for gratuity.But it is not correct because on the basis of one judgement there is no change in gratuity act.till the time gratuity act says that one is entitle to get gratuity after having 5 years of service.
__________________
Regards
J S Malik
Noida(U. P.)
mob-9810557181
From India, Madras
66I would like to quote our Sr. Moderator Mr. J.S. Malik's reply to the same subject on some other postings for your ready reference.
Gratuity is applicable only after 5 years of completion of service in the same organization by any employee.
The 240 days calculation is only from the 6th year onwards.
Regards,
Sundararaman
QUOTE
------------------------------------------------------------------------------------------------------
JS Malik - Senior Moderator in Cite HR
Subject - Re: gratuity calculation
dear
your husband has not completed 5 years of service ,so he is not entilte to get gratuity.
some people says after the judgement of madras high court that if individual has completed 240 days
in fifth year ,than individual becomes entilte for gratuity.But it is not correct because on the basis of one judgement there is no change in gratuity act.till the time gratuity act says that one is entitle to get gratuity after having 5 years of service.
__________________
Regards
J S Malik
Noida(U. P.)
mob-9810557181
From India, Madras
Dear Mr. Tyagi,
Very Good Morning.
I will like to correct my name as VIMAL and not VIMALA.
I fully agree with you with regard to the act for completed year of service and continuous service criteria.
But the eligibility criteria for payment of gratuity stays as completion of 5 years of service. The completed year of service and continuous service factor comes into consideration very much after completion of 5 years.
Regards
Vimal Radia
From India, Hyderabad
Very Good Morning.
I will like to correct my name as VIMAL and not VIMALA.
I fully agree with you with regard to the act for completed year of service and continuous service criteria.
But the eligibility criteria for payment of gratuity stays as completion of 5 years of service. The completed year of service and continuous service factor comes into consideration very much after completion of 5 years.
Regards
Vimal Radia
From India, Hyderabad
First of all sorry Vimal for that Misquoting your name.
But with due respect i have been to many Labour Commissioners Offices and see a lot of cases in my daily course where the following rule is applied daily and people get gratuity on the bases of this rule i.e.
4 years + 240 days = Eligible for gratuity
It is not the matter of a single Judgment being delivered over this 240 days rule. This 240 days rule has got very vast applicability.
Dalmia Magnesite Corporation, ... vs Regional Labour Commissioner ... on 12 November, 1980
Citation: 1981 (43) FLR 17
this Judgement will tell you how to apply 240 days rule. what to include in this 240 days and what not.
this 240 days rule starts applying from 1st year itself. the above judgment will make it clear read it with the judgment i posted earlier of Madras High Court.
From India, New Delhi
But with due respect i have been to many Labour Commissioners Offices and see a lot of cases in my daily course where the following rule is applied daily and people get gratuity on the bases of this rule i.e.
4 years + 240 days = Eligible for gratuity
It is not the matter of a single Judgment being delivered over this 240 days rule. This 240 days rule has got very vast applicability.
Dalmia Magnesite Corporation, ... vs Regional Labour Commissioner ... on 12 November, 1980
Citation: 1981 (43) FLR 17
this Judgement will tell you how to apply 240 days rule. what to include in this 240 days and what not.
this 240 days rule starts applying from 1st year itself. the above judgment will make it clear read it with the judgment i posted earlier of Madras High Court.
From India, New Delhi
Dear Mr. Kamal,
What does section 4 under Payment of Gratuity Act say...
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:
Can you get it clarified relation between Section 4 and 2A (2)
Regards, Pradipta
From India
What does section 4 under Payment of Gratuity Act say...
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:
Can you get it clarified relation between Section 4 and 2A (2)
Regards, Pradipta
From India
Yes, but its applicability is highly debatable question. Follow the thread as therre is brainstorming discussion on. Regards Vimal Radia +91 96625 48601
From India, Hyderabad
From India, Hyderabad
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.
Regards,
Viswam
From India, Madras
Regards,
Viswam
From India, Madras
Hi, After completion of 5 years ( employment service) yor are eligible payment of Gratuity Act 1972. K.S.Arumukarajen
From India, Erode
From India, Erode
Dear all,
Its totally depends upon the formula of gratuity.
If your company is following the below formula
Basic+DA*15/26*no.of years of service then the 4 years and 6 months will be consider as 5 years but 4 years and 5 months will be consider as 4 years.
And,
If your company is following the formula of gratuity
4.81%of basic+DA* no.of months of service.
Then, Exact 5 years rule will be applicable.
Please revert if I am wrong.
Regars
Sarvesh
From India, Gurgaon
Its totally depends upon the formula of gratuity.
If your company is following the below formula
Basic+DA*15/26*no.of years of service then the 4 years and 6 months will be consider as 5 years but 4 years and 5 months will be consider as 4 years.
And,
If your company is following the formula of gratuity
4.81%of basic+DA* no.of months of service.
Then, Exact 5 years rule will be applicable.
Please revert if I am wrong.
Regars
Sarvesh
From India, Gurgaon
Dear all,
I fully respect with all the views mentioned in this brainstorming decisions. I partially agree with both the views. Yes it is possible to agree with both.
As per the Gratuity Act, yes it is only after the completion of 5 years that an employee is eligible for Gratuity but when ever the matter has gone to the Judiciary for a decision, the learned Courts have always taken a judicial approach along-with a humanitarian aspect and calculated the 5th year on the law of 240 days as a year.
Now the ball is in the court of the Indian Govt. to amend the Gratuity Act and do the changes accordingly, but as always the Govt. is still running on the Gods Will/mercy. We are still following the old laws of the ancient times.
So as per law it is 5 years and as per the Practice it is 4 years + 240 days.
Many companies have started implementing the 4 years + 240 days rule as a goodwill gesture and made it their HR policy to go with the same. But many companies who want to grab the hard earned/well deserving money of their own employee, who has given them his/her 4.5 years of his valuable life, are still persisting with the written Law/Gratuity Act. None of them are wrong. It is all how we take it.
But remember HRs , whenever the matter will go to the Court, the decision shall be in the best interest of Law, Equity and Justice. Jai Hind.
Thanks & Regards,
Amarjeet Singh
Former Advocate and now DGM HR.
Osaw Agro Ind., Ambala Cantt.
9416000573
From India, Mumbai
I fully respect with all the views mentioned in this brainstorming decisions. I partially agree with both the views. Yes it is possible to agree with both.
As per the Gratuity Act, yes it is only after the completion of 5 years that an employee is eligible for Gratuity but when ever the matter has gone to the Judiciary for a decision, the learned Courts have always taken a judicial approach along-with a humanitarian aspect and calculated the 5th year on the law of 240 days as a year.
Now the ball is in the court of the Indian Govt. to amend the Gratuity Act and do the changes accordingly, but as always the Govt. is still running on the Gods Will/mercy. We are still following the old laws of the ancient times.
So as per law it is 5 years and as per the Practice it is 4 years + 240 days.
Many companies have started implementing the 4 years + 240 days rule as a goodwill gesture and made it their HR policy to go with the same. But many companies who want to grab the hard earned/well deserving money of their own employee, who has given them his/her 4.5 years of his valuable life, are still persisting with the written Law/Gratuity Act. None of them are wrong. It is all how we take it.
But remember HRs , whenever the matter will go to the Court, the decision shall be in the best interest of Law, Equity and Justice. Jai Hind.
Thanks & Regards,
Amarjeet Singh
Former Advocate and now DGM HR.
Osaw Agro Ind., Ambala Cantt.
9416000573
From India, Mumbai
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