Tsivasankaran
Consultant
Kumaresank
Labour & Industrial Laws
Psaluja
Service
Pv
Student
Sundar1959@zapak.com
Administration & Customer Care
+4 Others

Dear Sir,
I have completed 4 years and 10 months service in my present organization and i have accumlated leaves of 130.
Whether i am elglible for gratuity claim or not?
I have gon through the Gratuity law and it is saying that completion of 5 yrs only elgible for Gratuity with permited accident or death of employee with the exp. of 4 yrs and 240 days in 5th yr of service.
Please clarify.
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Gratuity is a lumsum amount received by an employee fromm his employer in gratitude for the services rendered..such sum can be paid on resignation,retirement, superannuation ,death or disablement .
The amount of gratuity can be paid only after an employee has rendered continuous services of not less than five years .except in termination of employment on account of death or disablemnt case.
THE CONDITION OF FIVE YEARS OF CONTINUOS SERVICES IS NOT NECESSARY IF SERVICES IS TERMINED DUE TO DEATH OR DISABLEMENT.
Graguity is normally payable to the employee himself ,whereas in death case of the employee it shall be paid to his nominee and nomination has been mad to his heirs.
in some case the nominee is a minor for it , the share of the minor shall be depostied with the controlling authority who shall invest the same for benefit of the minor ,until he/she attains majority age.
Mr Irappa, You are right. You would be eligible for gratuity as you have completed 240 days in 5th year as per latest Madras High Court Judgement Thanx Pradeep Saluja
Dear Friend,
You are certainly eligible for availaing your Gratuity at the rate of 15 days salary per year of servie. Salary means Basic+DA.
This basic+da to be divided by 26 days x 15 days per year x no. of years of service (say 5 years in your case).
Sundararaman
you are eligible for getting gratuity if you complete 240 day and act says if the employee completed 4 years and 6 months with out any negative actions taken by management then the individual is eligible
raj
I have a question on gratuity and seek an answer from our experts on the subject.

A person who has put 7 years service in a company and resigns from a lower post and joins immediately next day on a higher post in the same company. Thus there is no break in employment though there is resignation, the person remained in employment on both days i.e. day of resignation and next day he joins in new post. There is no gap even there is no sunday in between.

Can this person be paid gratuity if he claims for 7 years. If yes then question is that gratuity is payble on severance of relationship between an employee and an employer caused due to resignation, death, dismissal etc. But the effect of all these events is that person is no more in the rolls of the company. Here the person remains in the rolls of company on all days. Thus there is no severance of relationship.

If no, then the issue is what is the meaning of resignation, though i agree that the person is entitled for adding these 7 years when he actually resigns later.

The experts are invited to give their views. The situation is real life as in many public sector Banks such cases come.

regards PV
In this case, since by resigning your service is discontinued by the company and your account is settled, alongwith Gratuity applicable, PF withdrawal form, your appointment will be a New Employee with different Employee Code, you will not be eligible for next 5 years gratuity claim. You will be allotted PF new number.
Why at all one should resign today and join in a higher post the next day? I dont understand the logic. Even assumin g that the Company takes the resignation letter today, what action the Company is taking on the Resignation letter. When a Company has a resignation letter of an Employee, the process should be completed.
It includes
1. Salary settlement upto and including the last day
2. Leave encashment
3. Settlement of Gratuity
4. Settlement of all advances as on that date
5.Intimation to PF ( Of course PF authoriies may question you if you add him the next day as a memeber)
However from whatever I have read in your post, I do not understand as to why an employee should resign today and rejoin tomorrow!!!
T Sivasankaran
Dear tsivasankaran
I wrote that it is a live case and Indian Public Sector Banks when recruit specialists, it happens so many times that same person competes again for higher post and if selected he is asked to resign and join afresh. The issue is if he has 7 years of previous service and prefers gratuity claims and while he resigns on say 5th and joins on 6th in the higher grade post whether he will be eligible for the gratuity. Question is whether gratuity is payble on resignation (and of course death, termination etc) whether it is necessry to have a break in service. As normally retirement, resignation, death will have one effect that is severance of relationship between the employer and employee. But here the person is in roll of the company on both days, there is no break in service. That is the question.
I seek others views.
Pv
Dear Sivasankaran,
It happens in some companies. Suppose if the Directors of the company started a new company, it may transfer some experienced staff to the new company's roll on higher pay. In that case, it is not transfer as the new company will be totally independent company. Company may ask the person to put his resignation and the relieving letter will be issued and full settlement will be done. For new company, all fresh procedure will be done. In that case, it will be the next day of joining.
Our members had dicussed "this issue" hefty number of times & our friends also attached judgement in support of it. So i request my friend to first search for those and if it fails, pl raise de question in forum.
There are two different situations.

1. Employee resigns and join the same Company in a different position

2. Employee resigns and joins a sister concern

We were discussing about the situation 1 and I still do not understand the logic in the organisations asking an employee to resign and join the next day. It was mentioned that when an employee qualifies for a higher post, then they are asked to do this. It must have been done to sort out seniority issue which might crop at a later stage when service based promotions are given. It is normally followed in public Sector. This may not be a normal practice in Private sector. In any case, it is better for the organisation to settle gratuity

On the issue of asking senior executives to resign and join another sister company, the normal practice which I have come across in more than four companies is to transfer gratuity liabilty to the new company. In fact some companies based on acturial valuation settle gratuity payable to that employee and the letter will say that the employee's date of joining will be from the past for purpose of gratuity. Even leave is transferred. Otherwise the transferred employee will be at a loss

T Sivasankaran
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