Kamalkantps
Advocate
Loginmiracle
Consultant & G.m.
Malikjs
Gm (hr)
Hrssonepat
Service
Mishra.ganesh
Asst. Manager - Hr
+4 Others

Sirs,
Our Company is working for 5 days a week (due to extended hours).
An employee joined our Company on 01.03.2008. He has submitted his resignation an will be getting releived on 26.10.12 (After serving the notice period). Hence he has worked exactly for 4 years 240 days.
If we exclude weekly off, i.e., Saturday and Sunday, then he has worked for 4 years 172 days. Is he eligible for Gratuity.
Please clarify.
Regards,
Harish

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Dear Harish
5 days working or 6 days working does not have any realation for calculating the 240 days .this includes working day,weekly off,holidays ,leaves ,even maternity leaves or any lay off period.
For getting eligiblity of gratuity 5 years service is must ,however if your company gives gratuity after completing 240 days in fifth year than it is ok and indiviual is entitle to get it but leally 5 years service is must to become eligible for the same
Dear Mr.Harish, One is eligible for gratuity if he worked for 4 years and 240 days. Please find the attachement of madras high court judgment in this subject. regards S.GANAPATHY

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Dear Mr Ganpati
court gives judgement in various cases and these judgements can be only considered when act is not clear.
Judgements are given on circumstance of the case.Gratuity act clearly mention in applicablity clause that gratuity is applicable
only after completion of five years.
Dear Harish,
As per Gratuity Act, one employee who is completed 5 years of service, he is eligible for getting the Gratuity.
But if he completed 240 days including PH, PL, CL,SL, Weekly off, etc. in the 5th Year, then he is eligible for getting the Gratuity.
Thanks & Regards,
Ganesh Mishra
Dear Harish,

He is eligible for gratuity.

by virtue of 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."

In order to be eligible for gratuity, employee should have at least 4.8 yrs continuous years of service with the employer.

An employee is in service in a calendar year provided he has worked for

190 days in case employee is employed below the ground and (4.6yrs)

240 days in any other case. (above the ground 4.8yrs)

Hope this discussion ends finally with a positive note

Regards

Sohail Shaikh
Dear Harish,

For eligibility of gratuity you have to serve for 5 years.

Most of them are referring to Madras High court judgement for 4 yrs and 240 days. It cannot be applicable to all. If everyone is referring to that means there is a judgement in P.Raghuvulua an sons Vs. Additional Labour court (1985) where an employee who has served for 4yrs and 11 months and 10 days is not eligible for gratuity.

ALL THE JUDGMENTS CANNOT BE TAKEN AS GRANTED.

Even though in gratuity act of Section 2A, continous service definition is given, section 4 of POG clearly states as follows.

Section: 4

Payment of gratuity.

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -


(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

So gratuity is applicable only when you complete 5 years and continuous service definition can be taken into account only when you are denied for payment by the company after completing 5 years.

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

Unless there is an amendment in the POG you cannot refer the judgement for all cases.
Dear All,
I also agree with Mr. Keshav,
Both the judgement given in Madras High Court and Honorable Supreme court took the definition of section 25 B of ID Act for the reference of Continuous service. But the same cannot be applied for S & E act or other act where ID act doesn't implies.
Hi!!!
I think we need to first find whether the employee is covered under the payment of gratuity act or not?
If he is covered under the gratuity act, then no other act is applicable and he is not entitled for the payment of gratuity as per the act as he has not completed 5 yrs of service. However, if he is not covered under the payment of gratuity act, then he is covered by the Industrial dispute act and the various judgement pass in all the cases refered hereabove can be considered and he is eligible to claim gratuity.
Thanks & Regards,
Moiz Modi.
HR Executive.
I go with Shri J.S. Malikji and others who have clearly said "Gratuity is not applicable" for 4 years+240 days service.
This 240 days service comes in to picture only after serving 5 years.
Still if the company wants grant considering the goodwill of the Company and the performance of employee - it is your company's gesture. Gratuity Act is not amended.
If we go with Court Rulings (Madras HC), then there are judgements that minimum wages can be split for PF contributions purpose. Does EPFO consider all such judgements? No.
Hence judgements are meant on case to case basis and does not apply in general to go with the respective Act or Rules unless and otherwise it is amended and gazetted.
Yes he is eligibel for gratuity payment. We have also made payment in the past on the same circumstances citing court ruling. Court rulings are binding on the establishments. It is a fact, no one can deny it.
Regards,
Harish Shenoy
Yes an employee is eligible for Gratuity if he has worked for 4 years and 240 days in fifth year. In this case you have paid salary for the whole year weather it is 5 day week or 6 day week.
Dear Mr. Malik,

The Act itself is clear on this subject that 4 years and 240 days of service 5 years of service as the act says 5 years of continuous service. Now for this we have to see the definition of one continuous year of service which is given under section 2A of payment of Gratuity Act. the same is reproduced for your reference:

2A. Continuous service.—For the purposes of this Act,—

(1) 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;

(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer—

(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—

(i) one hundred and ninety days, in the case of any employee employed below the ground in a mine or in an establish-ment which works for less than six days in a week; and

(ii) two hundred and forty days, in any other case;

(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than—

(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and

(ii) one hundred and twenty days, in any other case.

3[Explanation.—For the purposes of clause (2) the number of days on which an employee has actually worked under an employer shall include the days on which—

(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.]

(3) where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy- five per cent. of the number of days on which the establishment was in operation during such period.]

As per the above definition when an employee completes 4 years and 240 days (one year of continuous service) in fifth year, he becomes eligible for gratuity. This is the funda which is clarified by Courts in various judgements cited by worthy members in the post. Hope this clarifies the position of the act.
Dear All,
This is very simple - If an employer wanted to pay him the gratuity then all the references in favour could be used. On the contrary if they wanted to deny can do so. This is per se willing or not willing only. Even the S.C. did not stay the 4yr.+ 240 days norms. We R not in T.N. stillm We had in our co. used this norm for several cases and settled. No one should prevent those who R willing. Every good thing is there for using them for the good of others. Pessimist vs. optimist case
kumar.s.
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