Hr Professional
Asst. Manager-hr & Admin
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I have a friend who is working with a private limited company employing less than 10 employees for the last 10 years, since the gratuity act prescribes a minimum employment of ten people for the eligibility for the payment of gratuity ,will my friend along with his colleagues be eligible for payment of gratuity?
will appreciate your inputs on this.

The Act is applicable only if there are more than 1o employees hence your friend is not eligible for payment of gratuity
Dear Arjunsingh,
It is correct that the payment of gratuity act is not applicable to the company of ur friends as the strength of company is less than 10, hence it is immaterial to think about the payment of gratuity even if services for life have been spent.

Hello sir, P.G, Act 1972 is only applicable to those industry where more than 10 persons are employed. In this instant case I do not think ur friend is entitled for Gratuity payment.
DearMr.Arjun Singh

You have not indicated as to whether the private limited companymin which your friend is working is a factory or a mine oil field or plantation or a shop or establishment. In case the private limited company is either a factory or mine or plantation then the restriction of employing 10 persons does not apply. It has to be a factory as defined under the Factories Act or a mine as defined under the Mines Act or a plantation as defined under the Plantation Labour Act. In case the private limited company is not one of these, then it has to be a shop or establishment, in which case it has to employ ten or more persons. Once ten or more persons are employed in the shop/establishment the Gratuity Act is applicable. Once the Gratuity Act is applicable then it does not matter if the number of employees goes below ten. in case the private limited company is a shop or establishment please check whether at any point in time ten or more persons were employed by it. If so then the Gratuity Act is applicable and your friend is entitled to get gratuity.


Joint Commissioner of Labour (Retired)

Government of Tamilnadu

Labour Law Consultant


Dear Mr. Harikrishnan
Thank you very much for your inputs ,
this firm which i am referring to falls under the shops & establishment act and i will check the provision there in.
Also, as suggested i will check the relevant details and try to see whether the firm had employed 10 people any time in the past or not.
Thanks again for your inputs.

Any one can explain, employees who are in casual or factory casual workers are also covered for gratuity eligibility? For example, one has joined as factory casual and after 5 years he has been adopted as company employee. He leaves the organisation after completion of 10 years, in that case what will be his date of joining? Will it date of joining as factory casual or date of joining as company employee?
Dear HR, our company started at 2012 minimum worker working that time, factory license applying 2015 feb now my question is gratuity eligible or not pls advise me
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