Saswatabanerjee
Partner - Risk Management
9871103011
Private Consultant On Labour Laws
Priya_zenith
Hr Manager
+1 Other

Anonymous
Dear seniors
i have few query related to gratuity
1. suppose an employee works for 11 year continous service in any organisation can he take gratuity twice say after 5 year and then after next year .
2. can we count notice period for entitlement of gratuity during full 7 final settlement.
3.i have seen various comment some say person should have worked for 5 year for gratuity entitlement ,few says he should have worked for 240 day in 5th year which one is correct as per statutory provisions.(big confusion).
4. what is the purpose of gratuity insurance because in few ctc structure gratuity as well as gratuity insurance both are part of ctc. .
Regards

From India, Mumbai
Gratuity is not a Bonus that you can claim very 5 years. It is actually a retirement benefit that the Company pays to the employees as a gratitude for putting in a long service.

However, these days, people normally do not stay with the Company for more than a couple of years.

Gratuity can be claimed and paid ONLY once i.e. at the time of retirement or resignation (if the person completes at least 5 years of service).

Yes you have to count notice period as part of service, as the person was actually working with the Company till his / her last day with the Company.

Regarding the confusion about 5 years and 4 years and 10 months, if we talk to legal provisions strictly, a person is eligible if he has put in 4 years and 10 months of continuous service (he has to put in 240 days of continuous service in the fifth year).

Gratuity Insurance is the amount of Insurance payable to the family along with the Gratuity in the event of death of the employee.

I hope this solves your queries,

Thanks,

Avika

From India, New Delhi
Anonymous
Dear Avika what is the provision of gratuity insurance and how that scheme can be availed. why gratuity as well as gratuity insurance both are part of ctc Regards
From India, Mumbai
As per my knowledge, normally, the gratuity insurance is a part of the Group Gratuity Scheme Policy taken by the Companies.
Both gratuity and gratuity insurance is a part of the CTC as the employer is paying the premium / contribution towards these policies / funds every year.

From India, New Delhi
Anonymous
Dear avika;
Thanks for sparing your precious time.i hope you dont mind in my question bombardment.
one more query on gratuity
suppose a person dies at the age of 45 and worked in company say 6 year and his retirement age is 58.
how will we compute gratuity. is it will be ( 6+(58-45)) i.e i say 18 years or till the death of his nominee.
how the gratuity will be distributed among dependant and rate of distribution and age up to which it is payable.
& will the gratuity be computed at the same rate as during employement or death make any difference
Pls guide.
Regards

From India, Mumbai
Dear Anonymous,

The reply to your queries is given below in seriatim:-



1. suppose an employee works for 11 year continuous service in any organisation can he take gratuity twice say after 5 year and then after next year:- An employee is not allowed to receive the payment of gratuity twice for every completion of 5 years in total period of service of 11 years.Section 4 is very clearly stipulates that the gratuity is payable to an employee on the termination of his employment after he rendered continuous service of not less than 5 years.The payment of gratuity twice is only possible if you have two break of service after every 5 years of continuous service.



2. can we count notice period for entitlement of gratuity during full 7 final settlement :- No, notice period is not allowed to be counted while computing a period 5 years continuous service. A clear-cut 5 years continuous service is required for the entitlement of gratuity. Although all the authorized leaves are allowed to be counted towards computing the continuous service of 5 years.You may refer to Section 2A of the the Payment of Gratuity Act,1972.

3.I have seen various comment some say person should have worked for 5 year for gratuity entitlement ,few says he should have worked for 240 day in 5th year which one is correct as per statutory provisions.(big confusion):-You are advised to go through the Section 2A of the the Payment of Gratuity Act,1972 which stipulates that an employed shall deemed to be in continuous service of one year, if he completes 240 days and 120 days in a period of six months.

4. what is the purpose of gratuity insurance because in few ctc structure gratuity as well as gratuity insurance both are part of ctc:- I am not very clear on this aspect.You may refer to Avika's mail where she has mentioned that both gratuity and gratuity insurance is a part of the CTC as the employer is paying the premium / contribution towards these policies / funds every year.



BS Kalsi

Member since Aug 2011

From India, Mumbai
Gratuity will be paid to the nominees.
It will be calculated till the date of death of the employee i.e. 6 years only.
It shall be distributed to the nominees as per the Will or the succession certificate. In the absence of these documents, it shall be given to the legal heirs

From India, New Delhi
Very interesting to see the requirement of two gratuity -s on any count. Please ask the seniors a serious and practical usage of service vs rules and please raise practical questions, which are badly in need of a solution.
From India, Nellore
Avika
Your suggestion could end up putting the company into a serious trouble.
In case of death, the company should send a notice to the Authority under Gratuity Act with the details of the gratuity due and the claimants. They need to distribute the amount to the claimants in line with instruction issued by the Authority. Or in case of dispute among the claimants, just deposit the amount with him and let him deal with it as he feels necessary.

From India, Mumbai
Dear Saswata,
As far as I know, if the employee has made a nomination, the money would go to the nominee(s).
Else, as i wrote, it would go to the people who are entitled as per the succession certificate or will.
Else the legal heirs.
The query that i answered was not about the procedure of Gratuity Act but about who would get the money.
I hope this clarifies the matter.

From India, New Delhi

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