Company Downsizing - Gratuity Eligibility - I Was Asked To Leave At 4 Yrs 6 Months? - CiteHR
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Dear Seniors,
I have worked in this company since Sept 2009, now due to bad market conditions, the company is downsizing and hence staff is asked to leave.
I would have completed 5 years in Sept this year i.e 2014 however I have been asked to leave by 15th of this month (Mar-14) hence cannot complete the 5 yrs criteria
To be precise i will be completing 4 yrs n 6 months in this month.
I would like to know if I will be eligible for gratuity or any amount of compensation for my service.
Also I am not the one quitting the job but company has asked me to leave.
Kindly advice.

Greetings Mr. S.,

Gratuity is payable if there is :-

Continuous service of 5 yrs. (not necessary in case of death or disablement)

On termination due to superannuation or retirement

Resignation, death or disablement due to accident or disease

In case of death, the amount will be paid to nominee or legal heir


If a person has completed 240 days in a year on his/ her fifth year of service, he/ she is eligible for gratuity


Dear Senior,

I have come across one situation. Where anemployee joined company as a Trainee from Apr'2008(where stipend was being paid), then in next year Feb'2009, he got a letter of trainee only but with regular company salary structure and in salary letter, below it was mentioned that "Gratuity applicable as per act". After that employee has got permanent employee offer letter in Apr'2010.

Now my question is:

1. What will be his actual date of joining?

2. As per the letter given in Feb'2009, his PF contribution started and also company mentioned about "Gratuity applicable as per act", so in this case what will be his gratuity pay tenure. will it be considered from Feb'2009 or Apr'2010?

Please reply with your suggestions.

Urgent attention required.



The primary condition for claim of gratuity is completion of not less than 5 years of continuous service. Under section 2- A, further provide that the employee shall be deemed to be in continuous service for minimum number of 240 days in a year, must have worked.
As the case may be, you are not fulfilling the above condition. But on the ground of cessation of work not due to any fault of the employee, you can claim for gratuity.

Dear Mr.S
I am agree with Mr. Kunal if you are not completed 5 years in your job than you are not eligible to get the gratuity but if the fifth year 8 months means 240 days or more you worked than it can be possible.

Dear Seniors, Is it mandatory for companies to give gratuity on completion of 5 years ?
Regrettably you will not be eligible for a gratuity.
This is not an isolated case, it seems a lot many companies are doing the same, ie ease the employee on the verge of becoming eligible for gratuity.
What is even worse, is that one employee who completed nearly 6 years was denied (sorry cheated of his eligible gratuity) and reasons given were to unconvincing that the company hasn't created a gratuity fund, and that when the employee joined the company it was not having enough employees to even deduct PF, so what ever is the count it begins only after the company came under the gambit of PF. I was shocked to hear this fairy tale. The person (I would prefer calling him the victim)concerned is not aware of the rule. I'm trying to get this person's contact details so that I can ask him to make his legitimate claim.
Warm regards,
TSK. Raman

Dear Mr.Mandeep,
Yes it is mandatory ,as per the provision of labour department if the company has more than 10 employees then the company have to create a gratuity fund for the employees after completion of 5 years job the employee can get the fund .If the does not have 10 employees then it is not mandatory to pay gratuity.
Sanjay Gahan
Manager - HR & Accounts

Dear myiaslhr,
My suggestion is that as per "The Gratuity Act" you’re not eligible for the same, so request for Gratuity benefits and convenience that you’re not intend to quit the service and Company want to leave you due to bad market condition.
If they agree for this condition then no problem, else continuous your duty until you go for eligible and future may ask to visit Labout Department for your justice.
Keep all this conversation with records and politely.
Seetarama Moger
+91 80 08 43222

Dear Kunal,
Now my question is:
1. What will be his actual date of joining? - If he joined under Apprentice Act than his DOJ should be Feb'2009.
2. As per the letter given in Feb'2009, his PF contribution started and also company mentioned about "Gratuity applicable as per act", so in this case what will be his gratuity pay tenure. will it be considered from Feb'2009 or Apr'2010?
- He is not elegible for Gratuity,BonuS,ESI but under factory act all safety measures should provide to Aprentiee..
Seetarama Moger

Dear Sir,
The Gratuity will be payable from the first day of his service irrespective of his status.
The designation of Trainee has been given by the Company Management. There is no exemption in
Gratuity Act to exclude Trainee Employees.Only Trainees enrolled under The Apprenticeship Act
1961 qualify for exemption.The so called designation of Trainee given by management is matter of
there convenience. It has no value in law.No employor could evade his legal liability by designating
their employees as Trainee.
For eligibility of Gratuity employee has to complete minimum 240 days of physical attedance
every year.Regarding completion of 4 years and 240 days by an employee he is eligible for

payment of Gratuity ( This is as per Judgement of Madras High Court). On completion of 240 days
of physical attendance the employee would be deemed to have completed continuous service of
one year ( As per The Industrial Dispute Act - 1947).

SR HR Manager.

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