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Hi Madhu,
I worked in Tata Communications Ltd from 02 Jan 2007 till 05 Aug 2011, which is total of 4 years and 215 days.. that company was working 5 day a week and as per the SC order, 4 years and 190 would qualify for gratuity amount.
In this case, is my case eligible for gratuity? The finance team is saying, as per Tata Trust rule, i have to finish 5 years?
Is SC order wont apply to trusts like Tata?
On the other hand, i am currently working in a MNC company at Hyderabad, they are considering 4 years and 190 as gratuity eligible period and paying the amount. Then why my previous employer denying this by saying, it wont apply to Tata Trust?
Need ur help to move further on this..

From India, Bangalore
Dear All,

Kindly find attached the Bare Act of the Gratuity Act 1972. The extract of the section 2A is given below:-

Also i have attached the Gratuity Act 1972 Bare Act. Therefore it is very clear that the calculation is for 4 years 240 days.

Also all organisations irrespective of their own trust have to follow the rules. Their rules can differ if they are more beneficially to the employee than the present act.

The extract is below:-

The gratuity eligibility as per Gratuity Act 1972 is 5 years of continuous service. Sub section (2) of section 4 is for calculation of gratuity and not for the eligibility of gratuity.

But as per the judgment of the Supreme Court an employee is eligible for gratuity if he has completed 4 years of continuous service and 240 days continuous working in 5th year. On the day when he completes his 240 days in the 5th year he will be eligible for gratuity.

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."

Now almost all organizations are paying gratuity if an employee has completed 4 years of continuous service and 240 days continuous working in 5th year.

Regards,

Ashutosh Thakre

From India, Mumbai
Hi Ashutosh Thakre,
Thanks for your detailed information.. So if the organization is working 5 days a week, does 5th year can be considered as 190 days?
like 4 years and 190 days if company follows 5 days week and 4 years 240 days when company follows 6 days week?
Appreciate your response.

From India, Bangalore
For establishment working for 5 days in a week, 240 shall be taken as 190 days. This is as per Gratuity Act itself. But the eligibility service remains 5 years from the date of joining, though we have some court verdicts which have interpreted requirement of 240 days or 190 days, as the case may be, which is the mandatory days for deciding continuous service, as one year service provided the employee has already completed 4 years in the preceding service period. A similar ruling has come from Kerala High Court also which says that an employee who has put in 4 years and 240 days (190 days for establishments working for 5 days in a week) is eligible to gratuity considering that 240/ 190 days will constitute one year. (Sreeja Vs. Regional Labour Commissioner[2015 LLR826])
Ashutosh: Please share the Supreme Court ruling you have mentioned in your post.
Madhu.T.K

From India, Kannur
Dear Ashutosh Thakre ji,

The SC judgment which you have quoted is not pertaining to Gratuity Act but it is pertaining to provisions under ID Act.

In this thread four years back, Mr. Madhu and Rajanassociates had given their opinion. Mr. Madhu is a Super Moderator of our Forum having very vast experience in IR. Rajanassociates are Legal Counsel / Advocate practicing for very long time in Labour Laws field. Still you differed with them.

One can differ with any one but with full equipped knowledge.

I want to ask you one simple question. If there is a Judgment on this subject by SC in 1980 then how the Madras HC and Kerala HC admitted the matter on the same subject after 1980?

We are concern with the Law and not what is being Practice. The Practice is adopted by the people who presumption that what they know is the Law. In of the recent threads one HR Manager said that Gratuity is deducted from salary and given later-on separation.

I am sorry. I would not said all this. I could not control myself.

From India, Mumbai
Dear All, The extract of the case is attached herewith. The SC ruling i shall update by coming Monday. Regards, Ashutosh Thakre
From India, Mumbai

Attached Files
File Type: doc Case Law on Gratuity.doc (88.0 KB, 727 views)

Dear Mr. Koregaonkar,
Thanks for the frank reply.
I know that the case was under the ID ACT, but it was pertaining the gratuity and the SC has clearly said that 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.
Hope i have clarified your doubt.
Regards,
Ashutosh Thakre

From India, Mumbai
Dear Thakre ji,
You have not answered to my question.
I have no doubt in my mind and I am very clear on the subject. I started feeling that I am unnecessary spending my time in sharing my knowledge on this forum.
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From India, Mumbai
Dear Learned Members of this Forum,

To conclude this subject, please find attached a judgment of Hon’ble Supreme Court in Grand Kakatiya Sheraton Hotel & Towers

Employees & Workers Union v. Srinivasa Resorts Ltd. & Ors. delivered on 27.02.2009.

Hon’ble Supreme Court in this case upheld the judgment of the Andhra Pradesh High Court, by which that court had struck down as unconstitutional the provisions of the Andhra Pradesh Shops and Establishments Act by which gratuity was made payable even to employees who had not completed 5 years service as per the Payment of Gratuity Act, 1972.

Given below is some text verbatim on page 11 of the Judgment:

"It is already held by this Court time and again that the concept of gratuity as conceived in the Payment of Gratuity Act and even earlier to that in labour jurisprudence is that gratuity is a reward for long and continuous service. It is for the first time by that Act, a worker or an employee was made entitled to the gratuity by his rendering continuous service for five years. If this is so, then providing only one year for entitlement to get the gratuity, is certainly unreasonable."

In light of above, my humble request to the learned members of this forum to conclude this subject. No further contribution from my side will be done on this topic unless some one raise a question of law.

From India, Mumbai

Attached Files
File Type: pdf Grand Kakatiya Sheraton vs Srinivasa Resorts & Ors. dated 27th February,2009.PDF (269.7 KB, 456 views)

Dear Mr. Koregaonkar,
My humble request is to please clarify, where in the attached case has the court ordered at Contunious 5 years of working is not 4 years and 240 days. The entire case is in a different angle.
The discussion which are all are trying to understand is if 5 contunious years of service is equalient to 4 years and 240/190 days.
Coming to your question as to why the court admitted the cases if they had a verdit before, i am very sorry, but me not being a lawyer, i shall not be able to comment on the same.
Regards,
Ashutosh Thakre

From India, Mumbai

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