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I wanted to know if a person who has served in a private organisation in India for 4 1/2 years, whether he is eligible for gratuity or not . Is notice period considered as a term of service. Also whether the Payment of Gratuity act overides the Companys own set of Gratuity rules ? Are there different set of rules for Indian and foreign companies operating in India ?
He is not eligible to have gratuity from the Organization.If the company have framed any Gratuity payment Rules then in that case those should not be less favourable to that provided in the Payment of Gratuity Act, 1972 if this Act is applicable to that unit.
Sr. Associate (LL & IR)
Skylark Associates, Gurgaon (Haryana)
(Labour Law Consultants)
Office: 311, AKD Tower, Sector 14, Gurgaon
(M) 09810405361 (O) 0124-4264449
1. Yes notice period is considered as a term of service.
2. Payment of Gratuity Act says that any employee who has served for 5 years will have to get gratuity @ 15 days salary for every completed year.
3. Yes a company can have their own rules for the period of gratuity eligibility. For eg. some software and IT organisation have 2 years period as an eligibility of gratuity. However as per the law you have to have a gratuity as your welfare program.
5 Years completed years of service is must in order to ensure eligibilty of gratuity as per Payment of Gratuity Act, 1972 except in case of death.
A company can have its own set of rules provided it should not be less beneficial as compared to the provisions of Payment of Gratuity Act, 1972.
The company which are operating in India, whether it is Indian Company or foreign company. They have to follow the Indian Labour Laws.
Thnaks n regards,
Shesh Nath Singh
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