Hi,
Can someone inform me if our company has to still follow gratuity rules. we have been registered under shops and establishment act in 2007, just completed 5 years in 2012. When we started we had only 7 employees, gradually we grew to 35,but again we have now reduced to 9 employees, so we have to follow gratuity rules.?
thanks and regards
djo

From India, Ahmedabad
dear only those employees will be covered who have been working with company since last 5 years. satish
From India, New Delhi
Hi Daisy All the organisaitons are covered under gratuity act. But applicability of the Gratuity is for the employees who are completed 5 years of conitnious employment in the same organisation.
From India, Bangalore
Dear Satish/Jeevarathnam, Thanks for your quick response. Do our company still have to follow the gratuity rules, when we have now reduced to only 9 employees? thanks and regards daisy
From India, Ahmedabad
Yes it is being followed not only our company but every company which comes under it. Satish
From India, New Delhi
no no you are not eligible because you are not covered under factory act as you are 9 employees you are not eligible for Gratuity. satish
From India, New Delhi
Dear Ms. Daisy,
This is amend what has been answered to you by our members. Your company is eligible for Payment of Gratuity Act. Although, you shall pay the gratuity only if the employee has continuous service in your organization for 5 years.
I hope this clarifies your query.

From India, Visakhapatnam
Dear Jeevarathnam
Dear Satish, Ms Das
Thank you, very much, for your valued inputs. I have understood that I need to disburse gratuity to those who complete continous 5+ years employement in our organisation.
I need one more clarification, if an employee has worked for 4 years and 5 months can he demand gratuity? out of 5 months 2 months is notice period.
thanks and regards
daisy

From India, Ahmedabad
Dear Satishji,
Company Policy is not allowing me to. Even I am in favour of paying, but we need to look at Precedent also. Once we implement for 4.5 yrs, others might start demanding for the same.
Anything as policy from the government which I can show the management?
thanks and regards
daisy

From India, Ahmedabad
Dear Ms. Daisy,
The date of completeion of 5 years shall be taken as from the joining date of the employee till the last date of leaving. The 240 days is counted only for continuance of service of an employee. Certainly, only a person who has completed 4 years and 240 days of service is thereby eligible for gratuity.
In the case specified by you, the employee is not eligible.
P.S: The Gratuity is paid only if the employee date of leaving should have completed 5 years.

From India, Visakhapatnam

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