Hi All,
I am currently working for MNC Software company for which i joined on 15 dec 2008 and this Dec 15 2013, i would be completing 5 yrs.
I have a couple of clarifications about Gratuity:
1) If i quit my current company as of today, will i be eligible for Gratuity ? (4 yr 10 months as of today)
2) Will notice period also be considered as part of gratuity ?
I please request someone to help me in this regard as i am clueless. Any help would be great..
Many Thanks in advance,
Avinash.
From India, Bangalore
I am currently working for MNC Software company for which i joined on 15 dec 2008 and this Dec 15 2013, i would be completing 5 yrs.
I have a couple of clarifications about Gratuity:
1) If i quit my current company as of today, will i be eligible for Gratuity ? (4 yr 10 months as of today)
2) Will notice period also be considered as part of gratuity ?
I please request someone to help me in this regard as i am clueless. Any help would be great..
Many Thanks in advance,
Avinash.
From India, Bangalore
Yes your continued rendering service is 4yrs. and 10 months than you have completed 240days as one yr completed as per gratuity act mentioned to count 1yr.means 5yrs. completed to claim gratuity.
Notice period days also consider to count 240days.
Get Bar Act for Gratuity and read to clear yourself also.
cheers!!
From India, Ahmadabad
73Notice period days also consider to count 240days.
Get Bar Act for Gratuity and read to clear yourself also.
cheers!!
From India, Ahmadabad
Mr. Bhardwaj is right 4 year & 240 days in the are equal to the 5 year , so you are eligible for payment of gratuity. Thanks & Regards, From, Sumit Kumar Saxena
From India, Ghaziabad
From India, Ghaziabad
Hi,
Although Gratuity rules say 4 years 240 days is considered equivalent to 5 years of employment and hence eligible for gratuity, but it will be better to check with your organization HR of exact rules, as interpretation differs from organization to organization. Yes, Notice Period is included as part of employment.
From India, Delhi
Although Gratuity rules say 4 years 240 days is considered equivalent to 5 years of employment and hence eligible for gratuity, but it will be better to check with your organization HR of exact rules, as interpretation differs from organization to organization. Yes, Notice Period is included as part of employment.
From India, Delhi
Hello,
The law does say that completion of 240 days will qualify to be counted as ONE year.
But there are conflicting judgement on the issue. Some decisions hold that first five years (the qualification period for gratuity) will NOT get the benefit of the above position and some have said that it is right to extend the benefit of this even to complete the qualifying period. I would advise you to follow the decision of the High Court under whose jurisdiction you happen to be!
Your employment will be counted till the last day of your employment. To that end the notice period will be a part of your eligible service. But it is possible that the employer MAY waive the notice period (even unilaterally) and bring you within the ambit of the myth of 240 days but this will be rare. I trust the employers to not take such a narrow view of matters especially when the employee is leaving!
I hope you are any more confused!!!
Rewgards
samvedan
October 8, 2013
-------------------------
From India, Pune
The law does say that completion of 240 days will qualify to be counted as ONE year.
But there are conflicting judgement on the issue. Some decisions hold that first five years (the qualification period for gratuity) will NOT get the benefit of the above position and some have said that it is right to extend the benefit of this even to complete the qualifying period. I would advise you to follow the decision of the High Court under whose jurisdiction you happen to be!
Your employment will be counted till the last day of your employment. To that end the notice period will be a part of your eligible service. But it is possible that the employer MAY waive the notice period (even unilaterally) and bring you within the ambit of the myth of 240 days but this will be rare. I trust the employers to not take such a narrow view of matters especially when the employee is leaving!
I hope you are any more confused!!!
Rewgards
samvedan
October 8, 2013
-------------------------
From India, Pune
Hi,
Please find attached herewith Payment of Gratuity Act, 1972.
Refer Page No-5
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,
(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:
Refer Page No-2
2. Definitions.- In this Act, unless the context otherwise requires,-
(a) “appropriate Government” means,-
(i) in relation to an establishment:-
(a) belonging to, or under the control of, the
Central Government
(b) having branches in more than one State
(c) of a factory belonging to, or under the control of,
the Central Government.
(d) of a major port, mine, oilfield or railway
company, the Central Government.
(ii) in any other case, the State Government.
(b) “completed year of service” means continuous service for one
year.
1[(c) “continuous service” means continuous service as defined in
Section 2-A;]
Refer Page No-3
[2A. Continuous Service.- (1) For the purpose 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 4[***] treating the
absence as break in service has been passed in accordance with
the standing orders, 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;
(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;
Regards
From India, Mumbai
Please find attached herewith Payment of Gratuity Act, 1972.
Refer Page No-5
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,
(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:
Refer Page No-2
2. Definitions.- In this Act, unless the context otherwise requires,-
(a) “appropriate Government” means,-
(i) in relation to an establishment:-
(a) belonging to, or under the control of, the
Central Government
(b) having branches in more than one State
(c) of a factory belonging to, or under the control of,
the Central Government.
(d) of a major port, mine, oilfield or railway
company, the Central Government.
(ii) in any other case, the State Government.
(b) “completed year of service” means continuous service for one
year.
1[(c) “continuous service” means continuous service as defined in
Section 2-A;]
Refer Page No-3
[2A. Continuous Service.- (1) For the purpose 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 4[***] treating the
absence as break in service has been passed in accordance with
the standing orders, 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;
(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;
Regards
From India, Mumbai
Hi,
Please find attached herewith Payment of Gratuity Act, 1972.
Refer Page No-5
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,
(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:
Refer Page No-2
2. Definitions.- In this Act, unless the context otherwise requires,-
(a) “appropriate Government” means,-
(i) in relation to an establishment:-
(a) belonging to, or under the control of, the
Central Government
(b) having branches in more than one State
(c) of a factory belonging to, or under the control of,
the Central Government.
(d) of a major port, mine, oilfield or railway
company, the Central Government.
(ii) in any other case, the State Government.
(b) “completed year of service” means continuous service for one
year.
1[(c) “continuous service” means continuous service as defined in
Section 2-A;]
Refer Page No-3
[2A. Continuous Service.- (1) For the purpose 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 4[***] treating the
absence as break in service has been passed in accordance with
the standing orders, 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;
(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;
Regards.
From India, Mumbai
Please find attached herewith Payment of Gratuity Act, 1972.
Refer Page No-5
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,
(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:
Refer Page No-2
2. Definitions.- In this Act, unless the context otherwise requires,-
(a) “appropriate Government” means,-
(i) in relation to an establishment:-
(a) belonging to, or under the control of, the
Central Government
(b) having branches in more than one State
(c) of a factory belonging to, or under the control of,
the Central Government.
(d) of a major port, mine, oilfield or railway
company, the Central Government.
(ii) in any other case, the State Government.
(b) “completed year of service” means continuous service for one
year.
1[(c) “continuous service” means continuous service as defined in
Section 2-A;]
Refer Page No-3
[2A. Continuous Service.- (1) For the purpose 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 4[***] treating the
absence as break in service has been passed in accordance with
the standing orders, 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;
(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;
Regards.
From India, Mumbai
Dear Avinash, and all members,
I would like to clarify one IMP point:
As per the Act - "(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" - This means that 5 years service is compulsory if the employee has been in continuous service.
The clause of 240 days is applicable only if the employee has not been in continuous service. i.e. if the service has been interrupted for reasons OTHER THAN --> sickness, accident, leave, absence from duty without leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employee,
So Avinash, to answer your questions:
1) If i quit my current company as of today, will i be eligible for Gratuity ? (4 yr 10 months as of today) - If you have been in continuous service then you have to complete 5 years with the Company to become eligible for Gratuity.
2) Will notice period also be considered as part of gratuity ? - Yes, the total period till your last working day is counted for Gratuity calculations.
Hope this helps,
Regards,
Ritesh Shah
From India, Pune
I would like to clarify one IMP point:
As per the Act - "(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" - This means that 5 years service is compulsory if the employee has been in continuous service.
The clause of 240 days is applicable only if the employee has not been in continuous service. i.e. if the service has been interrupted for reasons OTHER THAN --> sickness, accident, leave, absence from duty without leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employee,
So Avinash, to answer your questions:
1) If i quit my current company as of today, will i be eligible for Gratuity ? (4 yr 10 months as of today) - If you have been in continuous service then you have to complete 5 years with the Company to become eligible for Gratuity.
2) Will notice period also be considered as part of gratuity ? - Yes, the total period till your last working day is counted for Gratuity calculations.
Hope this helps,
Regards,
Ritesh Shah
From India, Pune
Dear Mr. Ritesh,
Kindly go through Page No-5 for the statement of Payment of Gratuity Act in Payment of Gratuity Act,1972
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.
Kindly go through Page No-3 for Definition of Continuous Service
[2A. Continuous Service.- (1) For the purpose 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 4[***] treating the
absence as break in service has been passed in accordance with
the standing orders, 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;
Kindly read point No.2 in definition of Continuous Service i.e. if employee not covers under point No.1 for Continuous Service for any period of one year or six months then employee shall be deemed to be in continuous service if
(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;
Kindly check and advice.
Regards.
From India, Mumbai
Kindly go through Page No-5 for the statement of Payment of Gratuity Act in Payment of Gratuity Act,1972
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.
Kindly go through Page No-3 for Definition of Continuous Service
[2A. Continuous Service.- (1) For the purpose 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 4[***] treating the
absence as break in service has been passed in accordance with
the standing orders, 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;
Kindly read point No.2 in definition of Continuous Service i.e. if employee not covers under point No.1 for Continuous Service for any period of one year or six months then employee shall be deemed to be in continuous service if
(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;
Kindly check and advice.
Regards.
From India, Mumbai
Dear Mr. Chetan,
I have gone through the Act several times in details, even had debates with my colleagues and friend on the interpretation of eligibility of gratuity.
Finally a practising lawyer helped us interpret the meaning:
1. If the employee has been in continuous service he/she has to complete full 5 years of service --> This is clearly mentioned in the Act - "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."
2. The statement about 240 days in mentioned in clause 2; Clause 2 is applicable only if the employee has not been in 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)"
The interpretation is as follows:
1. To become eligible for gratuity the employees has to be in continuous service for 5 years.
2. Continuous service = Uninterrupted Service
3. Service which has been interrupted for following reasons is still counted as "uninterrupted service" --> 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 orders, 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,
Clause 2 becomes applicable only if the employee's service has been interrupted due to reasons Other Than mentioned above in point 3.
If clause 2 becomes applicable and if the required conditions are satisfied, only then can the point about 240 days becomes applicable.
Hope this clarifies.
If anyone has different views, please provide some court ruling on the matter (Other than Madras High court).
Thanks,
Regards,
Ritesh Shah
From India, Pune
I have gone through the Act several times in details, even had debates with my colleagues and friend on the interpretation of eligibility of gratuity.
Finally a practising lawyer helped us interpret the meaning:
1. If the employee has been in continuous service he/she has to complete full 5 years of service --> This is clearly mentioned in the Act - "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."
2. The statement about 240 days in mentioned in clause 2; Clause 2 is applicable only if the employee has not been in 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)"
The interpretation is as follows:
1. To become eligible for gratuity the employees has to be in continuous service for 5 years.
2. Continuous service = Uninterrupted Service
3. Service which has been interrupted for following reasons is still counted as "uninterrupted service" --> 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 orders, 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,
Clause 2 becomes applicable only if the employee's service has been interrupted due to reasons Other Than mentioned above in point 3.
If clause 2 becomes applicable and if the required conditions are satisfied, only then can the point about 240 days becomes applicable.
Hope this clarifies.
If anyone has different views, please provide some court ruling on the matter (Other than Madras High court).
Thanks,
Regards,
Ritesh Shah
From India, Pune
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