Hi, I have worked in an IT organization which works 5 days a week. They are saying that I am eligible for gratuity IFF I complete 5 years, not 4 years 220 days. DOJ:12th April 2013 Date of Resignation: 22nd Nov 2017 Tenure: 4 years, 7 months, 11 days Am I eligible for gratuity ?, and how can I proceed?
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Section 4 of the Payment of Gratuity Act, 1972 provides that an employee will entitled to gratuity on completion of continuous service of 5 years
2)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.
You are not eligible for gratuity as you have not completed 5 years of continuous service in the company as per section 4 of the Payment of Gratuity Act.
Dear Client,
A company which follows 5 day week than gratuity will calculate acc. to below eg.
IF Doj 1.05.2000 -
01.05.2000 to 30.04.2001 - worked for 190 days = 1 year
If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004
Entitle to gratuity. Your period completes on 11th Sep 2017.
You are not eligible for gratuity as per gratuity act you are bound to serve for period of five years to get gratuity benefit from the employer. You are short of almost three months as such you won't be entitled so it's advisable to complete five years and quit
I am still seeing mixed responses. I am reiterating My company(Software company) follows 5 day week, and as per the 1972 Gratuity Act, shouldn't the 190 days of the 5th year considered as the continuous Year?. In the 5th year, I worked for almost 220 days. Can you please re-check the Gratuity Act and confirm, please.
Hello,
By virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)],
It is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service.
As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity.
4 years and 6 months (190 days = 1 year) where the company follows 5 day a week
4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week is eligible for gratuity.
The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.
Regards
By virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)],
It is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service.
As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 11 days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity.
4 years and 6 months (190 days = 1 year) where the company follows 5 day a week
4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week is eligible for gratuity.
The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.
A company which follows 5 day week
Doj 1.05.2000 -
01.05.2000 to 30.04.2001 - worked for 190 days = 1 year
If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004
The gratuity will be paid based on date of joining and completion of years of service. It is not based on 4 yrs and 216 days. If the person crosses 5 years of service within that 216 days, then he need to be paid, i.e, based on the date of joining of an employee, the day when he completes 5 years of service, he will be eligible to get the gratuity. But whereas the calculation will be rounded off to the next higher or lower fraction after his 5 yrs completion. So no one will be eligible to get gratuity if he is not completed 5 years of service.
The gratuity will be paid when an employee dies before completion of 5 years service, and will be paid to the dependent family member or nominee
So here you're not eligible for gratuity, you have to complete 5 years of service.
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.
So, in your case, you are not eligible for gratuity.
A person is eligible to receive gratuity only if he has completed minimum five years of service with an organisation. However, it can be paid before the completion of five years at the death of an employee or if he has become disabled due to accident or disease.
As per the Provisions of Payment of Gratuity Act, period of completed service exceeding six months continuously shall have to be reckoned as full year of service for the purpose of calculation .
Under the circumstances, you will be entitled to gratuity treating the period of continuous service as five years.
Sir if the employee has worked for 4 years and 190 days in establishment which work less then 6 days a week is eligible for the gratuity so by the law you are eligible for the gratuity.
(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
Serve a notice to employer to pay the gratuity if he fails file a complaint with the labour commissioner the employer can be penalised under section 9 and he can be ordered to pay the gratuity.
240 Working days are words used in the definition so 5 days in a week or 6 days in a week does not count, hence in my opinion you are not entitled for the gratuity.
As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10 months 11 days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity.
4 years and 6 months (190 days = 1 year) where the company follows 5 day a week
4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week is eligible for gratuity.
Illustration:
The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.
A company which follows 5 day week
Doj 1.05.2000 -
01.05.2000 to 30.04.2001 - worked for 190 days = 1 year
If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004
The gratuity will be paid based on date of joining and completion of years of service. It is not based on 4 yrs and 216 days. If the person crosses 5 years of service within that 216 days, then he need to be paid, i.e, based on the date of joining of an employee, the day when he completes 5 years of service, he will be eligible to get the gratuity. But whereas the calculation will be rounded off to the next higher or lower fraction after his 5 yrs completion. So no one will be eligible to get gratuity if he is not completed 5 years of service.
I am still seeing mixed responses. I am reiterating My company(Software company) follows 5 day week, and as per the 1972 Gratuity Act, shouldn't the 190 days of the 5th year considered as the continuous Year?. In the 5th year, I worked for almost 220 days. Can you please re-check the Gratuity Act and confirm, please.
A company which follows 5 day week
Doj 1.05.2000 -
01.05.2000 to 30.04.2001 - worked for 190 days = 1 year
If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004
Hello
5 days a week is irrelevant here. If you have worked for more than 4 years and 6 months then you are entitled for gratuity. The employer is duping you.there is no confusion about this calculation.
Regards
