G K Sharma
what is a year of service under Gratuity act?.
An Year of service means, for the purpose of calculation gratuity, he should have worked for 240 days in that calendar year. For an instance an employee had worked for more 7 years and his no of days worked in each are as follows:
Assume that the total No of days per year is 303 days
1 st year: 300 days
2nd year: 255 days
3rd year: 298 days
4th year: 129 days
5th year: 310 days
6th year: 110 days
7th year : 303 days
Now the employee is eligible for five years since he has not completed 240 days which is the eigible criteria for two years. But normally 99.99% of the companies are not following this.
But application of the Act is extended to those who have completed 4 yrs and 240 days in the fifth year. For calculation purpose the gratuity is calculated in multiplicity of 6 months. That is if an employee completes 6.7 yrs the gratuity is to be calculated for 7 years.
Hope I am clear.
I heard that there is some other judgement against this ruling permitting those with 4 years + 6 months to get gratuity. But the intrepretation of the Act is to take 5 years from the date of joining to date of leaving.
The fraction of six months and 240 days are considered for determining the amount of gratuity. As such one who has worked for 6 years and 7 months will get gratuity for 7 years.
Please reply soon.
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