I worked in a factory for more than 9 years and quit for some reasons. Later on, I again joined the same company after 3 years and again quit after 3 years. After one year, I again joined the company and continued with the company till date. Thus, I had 2 breaks in the total period of 26 years of service in the same company. My question is how many years of service shall be considered for the calculation of gratuity.
From India, Delhi
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From India, Delhi
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Didn’t you get gratuity for the first spell of 9 years when you left the company? Why didn’t the company pay you gratuity then?
From India, Kannur
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4758From India, Kannur
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Sir, due to un-awareness on my part about the payment of gratuity at that time. Neither I claimed nor the company paid itself.
From India, Delhi
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From India, Delhi
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You, as an employee, need not claim gratuity. It is the responsibility of the employer to pay gratuity within 30 days of your leaving. Now, if the company has not paid it, and you were allowed to rejoin the company after 3 years, the period between the two, leaving the company after 9 years and joining back, shall be treated as a break in service, and again adding the three years in the second spell as continuous to the nine years. Again, when the second spell also went without any gratuity payment, and the company allowed you to continue after a gap of one year, the same would also account for service. The question is whether the company had recorded the gaps as not in service or not. If you had resigned and the company had relieved you properly, then the only obligation as far as the company is concerned is to pay you gratuity for the first service of 9 years now with interest. The present rate of gratuity is 10% per annum. Since the second service contained only three years, that period of service will not entitle you to any gratuity. Similarly, if you do not have five years in the present service since your rejoining, then you will not receive any gratuity for this period of service either.
It may also happen that when you left after the first set of service, the company was not covered by the Payment of Gratuity Act. Therefore, please check at that period if the company was covered by the Gratuity law. If your undertaking is a factory/mine/plantation, the Payment of Gratuity Act would be applicable to it irrespective of the number of employees in it. But if not a factory/mine or plantation, but was carrying out some trading activities, then in order to make the Gratuity law applicable, there should be at least ten employees in your company.
If there was a delay in the payment of gratuity, the company can pay it now with interest. The amount of gratuity would be computed based on the salary that you earned at the time of leaving the company after your first 9 years of service. At the same time, if your leaving was just casual, but the company had ignored it without initiating any action for not reporting and allowed you to rejoin without endorsing the break in service as a period without any service benefits, then the employer will find it difficult to find a way out. In such a scenario, you will be in a positive position because if you can establish that the gap was only technical, then your gratuity will have to be calculated based on the present salary, which will obviously be higher than the past wages, and the reckonable service would be 26 years.
Another possibility is that the employer can compute gratuity based on the present salary but for a number of years of service by counting the breaks in service, say 3 years after the first period of service and one year after the second period of service, as breaks in service.
From India, Kannur
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It may also happen that when you left after the first set of service, the company was not covered by the Payment of Gratuity Act. Therefore, please check at that period if the company was covered by the Gratuity law. If your undertaking is a factory/mine/plantation, the Payment of Gratuity Act would be applicable to it irrespective of the number of employees in it. But if not a factory/mine or plantation, but was carrying out some trading activities, then in order to make the Gratuity law applicable, there should be at least ten employees in your company.
If there was a delay in the payment of gratuity, the company can pay it now with interest. The amount of gratuity would be computed based on the salary that you earned at the time of leaving the company after your first 9 years of service. At the same time, if your leaving was just casual, but the company had ignored it without initiating any action for not reporting and allowed you to rejoin without endorsing the break in service as a period without any service benefits, then the employer will find it difficult to find a way out. In such a scenario, you will be in a positive position because if you can establish that the gap was only technical, then your gratuity will have to be calculated based on the present salary, which will obviously be higher than the past wages, and the reckonable service would be 26 years.
Another possibility is that the employer can compute gratuity based on the present salary but for a number of years of service by counting the breaks in service, say 3 years after the first period of service and one year after the second period of service, as breaks in service.
From India, Kannur
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I disagree with some of Mr. Madhu's contentions. He has worked for 26 years, of which 14 earlier years will not count because of a service break. So he will now get gratuity for 12 years.
He cannot now claim gratuity for the first 9 years because the period of limitation (3 years) will apply. If you did not claim an amount for 3 years, you are disallowed from claiming it thereafter. There is a provision for condonation of delay, but 20 years are not likely to be excused by the courts.
On the other hand, it is possible that the company management is considering gratuity for you for the full period as you have worked with them for so long. So perhaps you can just ask them what they plan to do for your gratuity.
From India, Mumbai
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He cannot now claim gratuity for the first 9 years because the period of limitation (3 years) will apply. If you did not claim an amount for 3 years, you are disallowed from claiming it thereafter. There is a provision for condonation of delay, but 20 years are not likely to be excused by the courts.
On the other hand, it is possible that the company management is considering gratuity for you for the full period as you have worked with them for so long. So perhaps you can just ask them what they plan to do for your gratuity.
From India, Mumbai
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You are only entitled to receive gratuity for the 9 years worked in the first phase. It is not easy to claim back the gratuity because it is already time-barred. However, you still need to file a claim before the statutory authority; let us see what happens.
The remaining working period of 17 years holds no merit because you have not worked on any case for a continuous period of 5 years.
From India, Mumbai
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The remaining working period of 17 years holds no merit because you have not worked on any case for a continuous period of 5 years.
From India, Mumbai
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Prabhat-ji His current period must be 12 years, right? He worked for 26 years, out of which 9 and 3 were before the currents session.
From India, Mumbai
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From India, Mumbai
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Mr. Saswat,
The employee was having some issues because he left the job within an interval of 3 or 4 years of working. He rejoined the company as per his wish, as it appears from his posting. The poster should present his case with a timeline to provide a clear understanding and make suitable suggestions.
Based on the data, the employee will be eligible for gratuity for continuous service of over 5 years or more if there is no service break. People often grow weary of sharing information but seek legal solutions to their issues, which can be a challenging task. The employer can simply deny, in a single line, that records for that period do not exist.
From India, Mumbai
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The employee was having some issues because he left the job within an interval of 3 or 4 years of working. He rejoined the company as per his wish, as it appears from his posting. The poster should present his case with a timeline to provide a clear understanding and make suitable suggestions.
Based on the data, the employee will be eligible for gratuity for continuous service of over 5 years or more if there is no service break. People often grow weary of sharing information but seek legal solutions to their issues, which can be a challenging task. The employer can simply deny, in a single line, that records for that period do not exist.
From India, Mumbai
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In this case, it is not section 7(7) of the Payment of Gratuity Act but section 7(2) that will be applicable. Section 7(1) states that a person who is eligible for payment of gratuity shall send a written application to the employer, within the prescribed time and form, for the payment of such gratuity. Subsection 2 of section 7 specifies that the employer shall determine the amount of gratuity, whether an application as per subsection (1) has been made or not, and provide written notice to the recipient of the gratuity and the controlling authority, detailing the determined amount of gratuity. It is evident that the employee is not required to claim the gratuity. Even if the employee does not claim it, the employer must calculate and disburse the gratuity within 30 days (as stipulated in subsection 3 of section 7).
When an appeal is lodged under section 7(7), it must be submitted within 60 days. The section also allows for an additional 60 days under genuine circumstances. In The Secretary, Sree Avittom Thirunal Hospital v. State of Kerala, 2023 SCC, it was noted that when enacting Section 7(7) of the Act in 1972, the legislature intentionally excluded the application of the Limitation Act by setting a 60-day appeal deadline extendable by another 60 days. Otherwise, the standard appeal limitation under the Limitation Act is 30 days.
The crucial aspect is that the 60 days plus 60 days mentioned in the Payment of Gratuity Act pertain to the timeframe for filing an appeal against any authority's decision. In this instance, the employer has neither calculated the gratuity nor informed the employee to collect the amount (via form L) or that the gratuity claim has been declined (via form M). Consequently, the employee is entitled to receive the gratuity with 10% annual interest. The interest amount cannot exceed the principal sum, and for periods exceeding 10 years, based on the initial 9 years of service, no interest will accrue, with the interest capped at the principal gratuity amount.
From India, Kannur
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When an appeal is lodged under section 7(7), it must be submitted within 60 days. The section also allows for an additional 60 days under genuine circumstances. In The Secretary, Sree Avittom Thirunal Hospital v. State of Kerala, 2023 SCC, it was noted that when enacting Section 7(7) of the Act in 1972, the legislature intentionally excluded the application of the Limitation Act by setting a 60-day appeal deadline extendable by another 60 days. Otherwise, the standard appeal limitation under the Limitation Act is 30 days.
The crucial aspect is that the 60 days plus 60 days mentioned in the Payment of Gratuity Act pertain to the timeframe for filing an appeal against any authority's decision. In this instance, the employer has neither calculated the gratuity nor informed the employee to collect the amount (via form L) or that the gratuity claim has been declined (via form M). Consequently, the employee is entitled to receive the gratuity with 10% annual interest. The interest amount cannot exceed the principal sum, and for periods exceeding 10 years, based on the initial 9 years of service, no interest will accrue, with the interest capped at the principal gratuity amount.
From India, Kannur
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Hi, you may kindly note that unless it is the fault of the employer, if you are quitting a company by serving less than 5 years, you are not entitled to any Gratuity payment. Only when you serve 5 years and above continuously, you are eligible for Gratuity payment. At present, while you are still in service with the company, only when you leave, then you can claim for gratuity for the current service rendered.
From India, Bengaluru
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From India, Bengaluru
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