ootb Started The Discussion:
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 ?
First of all any company who is operating in india either indian or foriegn will have to follow the labour law of the country, for payment of gratuity 5 years of completion of service is required.
thanks & regards,
sumit kumar saxena.

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.

With Regards,
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.
Dear Sir: Employee is entitled for gratuity if he or she has worked in an organisation for five years and above. For calculation of gratuity month 26 days are taken per month are taken into account. This is as per gratuity act. Notice period is consindered as term of service.
Dear Friend, Not. Atleast he should have completed 4 years + 240 (8 months) to become eligible for gratuity. In case of death such service is not compulsory. sathish
Dear Firends, One can claim Gratuity when he has completed more then 4.5 Year. As in this terms more then 0.5 is consider as 01 year.
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
No gratuity can’t be a part of ctc as because this is a gratitude/reward to the employee from employer after the successful completion of 5 years or more in service. thanks & regards, sumit
I have come across some companies where if an employee completes 3 yrs of service they are eligible for Gratuity...is this fine, because the law says the employees will have to complete 5 yrs...


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