Dear Friends,
Wishing you all a very happy new year.
I want to know about the gratuity rules. As I know, gratuity is entitled to an employee who has served for atleast 5 yrs. But it is not exact five years. It is something like 4 yrs. and some no. of days. I want to know the exact period.
regards,
Jyoti Negi
From India, Delhi
2Wishing you all a very happy new year.
I want to know about the gratuity rules. As I know, gratuity is entitled to an employee who has served for atleast 5 yrs. But it is not exact five years. It is something like 4 yrs. and some no. of days. I want to know the exact period.
regards,
Jyoti Negi
From India, Delhi
Hi
Strict interpretation of Payment of Gratuity Act requires a person to complete 5 years of Service. 240 days or 190 days will be counted only when the person completes 5 years. If a person works for 4 year and 11 months, then even if he completes 240 days or 190 days as the case may be, we can take the plea that he is not eligible for gratuity.
See section 2A of the Act which is reproduced.
2A.
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;
Having said this, I would advise organisations to take a liberal view on this. A liberal view would be 4 year and 240 days if you work for 6 days week and 4 years and 190 days if you work for less than six days a week
If you apply this logic, a person is eligible to receive gratuity if he gets paid salary for 4 year and eight months in a period of 5 years where the establishment works for 6 days
If the establishment works for less than 6 days a week, then a person getting paid salary for 4 year and 6 months would be eligible.
I know many organisations take this liberal view.
In a nutshell legally it has to be 5 full years.
If you take a liberal view then it has to be 4 year and 240 days in case of 6 days week and 4 year and 190 days in case of less 6 days a week work
Siva
From India, Chennai
Strict interpretation of Payment of Gratuity Act requires a person to complete 5 years of Service. 240 days or 190 days will be counted only when the person completes 5 years. If a person works for 4 year and 11 months, then even if he completes 240 days or 190 days as the case may be, we can take the plea that he is not eligible for gratuity.
See section 2A of the Act which is reproduced.
2A.
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;
Having said this, I would advise organisations to take a liberal view on this. A liberal view would be 4 year and 240 days if you work for 6 days week and 4 years and 190 days if you work for less than six days a week
If you apply this logic, a person is eligible to receive gratuity if he gets paid salary for 4 year and eight months in a period of 5 years where the establishment works for 6 days
If the establishment works for less than 6 days a week, then a person getting paid salary for 4 year and 6 months would be eligible.
I know many organisations take this liberal view.
In a nutshell legally it has to be 5 full years.
If you take a liberal view then it has to be 4 year and 240 days in case of 6 days week and 4 year and 190 days in case of less 6 days a week work
Siva
From India, Chennai
tsivasankaran Sir,
Suppose I have completed 4.10 years (yrmm) and I have balance of 90 days
Earned Leave. For which PF is also deducted on the time of encasement.
It this situation can I make claim for Gratuity?
Expecting reply from all the members of the forum!
Regards,
Rahul Tiwari
From India, Ambala
Suppose I have completed 4.10 years (yrmm) and I have balance of 90 days
Earned Leave. For which PF is also deducted on the time of encasement.
It this situation can I make claim for Gratuity?
Expecting reply from all the members of the forum!
Regards,
Rahul Tiwari
From India, Ambala
Payment of Gratuity Act, 1972
&
Payment of gratuity (Punjab) Rules, 1973
Object: It is an Act to provide for a scheme for the payment of gratuity to employees
engaged in factories, mines, oilfields, plantations, ports, railway companies, and shops or
other establishments.
Applicability of the Act: Any employer of the above noted establishments where 10 or
more persons are employed or were employed on any day of the preceding twelve months
is liable to pay gratuity to its employees. Once the Act becomes applicable, it continues
even if the number of employees falls below ten.
Entitlement: Gratuity is payable to an employee (nominee – in case of death of
employee) who has rendered continuous services of five years or more on his termination
of employment, superannuation, retirement or resignation. Completion of continuous
service of five years is not necessary where the termination of employment is due to
death of disablement.
Calculation of gratuity amount: W x Y x 15 ÷ 26 [W = Last Wage drawn i.e. basic +
DA; Y = number of completed years of continuous service (six months or less to be
ignored and more than six months to be counted as full year)].
Maximum Limit : Rs. 3.5 lacs.
Time Limit for application to employer: Employee has to make an application in
Form-I to his employer within 30 days from the date the gratuity becomes payable.
Whom to apply in the case of non-payment by employer or dispute: Application in
Form - N is to be made to the “Controlling Authority” i.e. the Assistant Labour
Commissioner or the Labour-cum-Conciliation Officer of the concerned area within 90
days on the expiry of 30 days period of the employer.
Appeal : An aggrieved party can file an appeal to the Appellate Authority i.e. Additional
Labour Commissioner, Punjab within 60 days of the decision of the Controlling
Authority.
From India, Mumbai
&
Payment of gratuity (Punjab) Rules, 1973
Object: It is an Act to provide for a scheme for the payment of gratuity to employees
engaged in factories, mines, oilfields, plantations, ports, railway companies, and shops or
other establishments.
Applicability of the Act: Any employer of the above noted establishments where 10 or
more persons are employed or were employed on any day of the preceding twelve months
is liable to pay gratuity to its employees. Once the Act becomes applicable, it continues
even if the number of employees falls below ten.
Entitlement: Gratuity is payable to an employee (nominee – in case of death of
employee) who has rendered continuous services of five years or more on his termination
of employment, superannuation, retirement or resignation. Completion of continuous
service of five years is not necessary where the termination of employment is due to
death of disablement.
Calculation of gratuity amount: W x Y x 15 ÷ 26 [W = Last Wage drawn i.e. basic +
DA; Y = number of completed years of continuous service (six months or less to be
ignored and more than six months to be counted as full year)].
Maximum Limit : Rs. 3.5 lacs.
Time Limit for application to employer: Employee has to make an application in
Form-I to his employer within 30 days from the date the gratuity becomes payable.
Whom to apply in the case of non-payment by employer or dispute: Application in
Form - N is to be made to the “Controlling Authority” i.e. the Assistant Labour
Commissioner or the Labour-cum-Conciliation Officer of the concerned area within 90
days on the expiry of 30 days period of the employer.
Appeal : An aggrieved party can file an appeal to the Appellate Authority i.e. Additional
Labour Commissioner, Punjab within 60 days of the decision of the Controlling
Authority.
From India, Mumbai
It is strictly 5 years. However, an employee who had worked for 5 yeears and more than 6 months will get gratuity for 6 years. That is, fraction of year in excess of six months will be counted as one year FOR THE PURPOSE OF AMOUNT OF gratuity payable AND NOT for ELIGIBILITY for gratuity.
In this respect please refer a leading case :An employee who has worked for 4 years 11 months and 10 days not eligible for gratuity as decided in P. Raghavalu and Sons Vs Additional Labour Court, Andhra Pradesh, as the qualifying phrases ‘part thereof in excess of six months’ shall be taken only for calculation of gratuity and not for determining the eligibility of gratuity.
However under the Working Journalists and other Newspaper Employees (Condtions of Service) Act, 1955 which provides for the service conditions and other matters, provides that news paper employees need to complete three years of service for gratuity. Their rate of gratuity is also different and is subject to the length of service.
egards,
Madhu.T.K
From India, Kannur
In this respect please refer a leading case :An employee who has worked for 4 years 11 months and 10 days not eligible for gratuity as decided in P. Raghavalu and Sons Vs Additional Labour Court, Andhra Pradesh, as the qualifying phrases ‘part thereof in excess of six months’ shall be taken only for calculation of gratuity and not for determining the eligibility of gratuity.
However under the Working Journalists and other Newspaper Employees (Condtions of Service) Act, 1955 which provides for the service conditions and other matters, provides that news paper employees need to complete three years of service for gratuity. Their rate of gratuity is also different and is subject to the length of service.
egards,
Madhu.T.K
From India, Kannur
Dear Rahul As per strict interpretation of the Act you can not make claim. Some companies give a liberal interpretation. Siva
From India, Chennai
From India, Chennai
Yes, u can claim for gratuiry if u have completed a continuous service for more than 4 ys and 6 months
Mr. Sudhakar Please let us know how we can claim in 4.6 yrs continuous service. Is there any notification or amendment or any judgment. I am awaiting for your reply. Regards, Rahul
From India, Ambala
From India, Ambala
Dear Siva Sir,
Kindly Help Me.
I Worked For A Computer Firm For 12 Years And My Salary Last Drawn Was 13095/-.
I Had Sent My Gratuity Claim Form And Company Has Sanctioned Only Rs.32000/- Which I Am Not Accepting.
Help Me What To Do And Is Rs.32k After 12 Years Of Job Acceptable?
Waiting For Your Response.
Very Very Eagerly.
S.dasgupta
From India, Bhubaneswar
Kindly Help Me.
I Worked For A Computer Firm For 12 Years And My Salary Last Drawn Was 13095/-.
I Had Sent My Gratuity Claim Form And Company Has Sanctioned Only Rs.32000/- Which I Am Not Accepting.
Help Me What To Do And Is Rs.32k After 12 Years Of Job Acceptable?
Waiting For Your Response.
Very Very Eagerly.
S.dasgupta
From India, Bhubaneswar
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