Soical Compliance Auditing
Gm (hr)
Hr , Personnel & Admin
Hr & Admn.
Govil Nanda
Hr Professional
Hr Manager
Senior Hr Lead - India
Hr Executive
+3 Others

Dear HR Professional Colleagues

I am Vijay, working as HR Executive in Munufacturing company. Our organisation was registered under Factories Act,1948. The payment of Gratutity act is also applicable to our organisation. One of our employee was completed 58 years age and ready to retirement. His Date of Joining is 01.02.1991 and he completed
19 years of service. during this 19 years of service one year he was not completed 240 days due to ESI leave. In that year his actual preseny days are 210 days and 65 days on ESI leave. In this regard my question is whether he is eligibale 18 years or 19 years for payment of Gratitity and i want some clarifications about on this topic.

1. what is meaning of Continuous service as per Payment of Gratutity act, 1972 ? which days are calculated and which days are not calculated ?

2. ESI leave considered as continuous service?

3. W.Off's and holidays are considered as continuous service?

4. LOP's and Absents are considered as continuous service?

5. suspension days are considered as continuous service?

I request to all pl provide the above information and share your knowledge to rectify my problem. I am very thankful if you code any supreme court judgements on this topic.

Thanking you

Vasireddy Vijay

My email id
27th June 2009 From India, Hyderabad
Dear ,:-D
ESI leaves should be considered in continous your
case it is 19 years (ie : consider ESI leaves also).
In case of ESI leaves Esi has paid him partial salary then why
it should not be taken into continous service ?it has too.
even W'offs and suspension is considered as continous service.
even Holidays are taken in consideration as they are paid holidays.
(if i am not mistaken)
Rajeev Dixit
27th June 2009 From India, Bangalore
Dear Vijay
In your case it will be 19 years for calculation of gratuity if your company has the practice of not considering sick leaves as break in service. Please go through your company precedence and service rules(if any).
27th June 2009 From India, New Delhi
dear it has to 19 years.if he was on sick leave than it will be counted in 240 days.if due to accident there was a break in service than only it will not be counted . regards j s malik
27th June 2009 From India, Delhi
Dear Vijay,
If he was on leave on ESI which is also countable,if a employee completed more than six months(or more than 120 working days) in a year,we will consider a complete one year.
In your case ,it should be 19 years.
Best Regards
28th June 2009 From India, Delhi
Hi Vijay, The Employee is entitled to Gratuity for 19 years. SL or LWP will be not be counted as break in service as per SEC-2A continuous service of Gratuity Act. Best Regards Govil
28th June 2009 From India, Delhi
hi senior Absent without sanction leave and suspended (as punishment )will be counted in continuous service? pl suggest thnking u sachin
29th June 2009 From India, Mumbai
hello sir,
in gratuity act -5 yrs continuous service whoever completed he is liable to gratuity.
3500/- Rs. upto 3 Lakhs. continuous service includes sick leave or ESI leave,but
if any aacident cause it is not include because break down the service.
malsidha deshmukh
Student Trainee
Karve institute of social service,
Karvenagar, Pune.
29th June 2009 From India, Pune
Guys, Pls note If you are marking someone attendance whether Present or Absent it clearly means he is on the rolls of company. Unless and until he has disassociated himself through Resignation or other means....As long as he is shown as part of the organisation you cannot count him as not a break in it would be 19 full years and not 18 years
29th June 2009 From United Kingdom
Hi Vijay

What i feel is depending on the duration of the leave, and the reason behind it is very important. If in this duration he was without any pay coming to Gratuity for the leave duration should not be considered. Gratuity is some thing eligible for those who have worked during the whole service period.
In the Labour Law i guess it says"
an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 2[***] treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act; "

29th June 2009 From Qatar, Doha
Hi The period in which he remained on ESI leave ( sick leave) should be treated as continuous services and he is eligible for gratuity benefits for 19 years. Regards, Sivadasan
29th June 2009 From India, Udaipur
yes esi leave must be counted in calculation of gratuity as because the componsation paid by esi is part of employee salary. sumit, 9899669071
29th June 2009 From India, Ghaziabad
Dear Vijay,
Keeping in view details given by you, the concerned employee will be entitled to payment of Gratuity for 19 years and not 18 years since he has although not completed 240 days in that particular year but completed more than 6 months of continuous service (exceeding 120 days). Moreover he was under ESI where he must have got partial salary from ESI for the duration (65 days) he was under the treatment.
Best Ragards

29th June 2009
Dear all!!!! Section 2-A of the PG Act stipulates that for calculation of continous service the period of uninterrupted service including the period of sickness, accident, leave, absence (except where there is a break in service), lay off, strike, lock out, or cessation of work not due to the fault of the employee. Hence the different contingencies stated in your query like ESI leave, absence, suspension etc cannot deprive an employss of getting gratuity for that period. Hope the same clarifies regards KK Nair
30th June 2009
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