Hr Manager
Management Consultants Legal & Hr
Ram Chauhan
Dy. Mngr - Hr
Manager- Hr & Ir
+4 Others

Dear Experts,
Can you pls tell me can we get Gratuity amount to be paid in following case:
*Grauity is a part of CTC, it is deducted every month, kept at Employer side, employee has completed only 1 year and Employer terminates due to Layoff/ Retrenchment/ merger/shutdown/closing the company?
In above case Employee did not resign but Employer terminated almost 70% of the employees due to shutdown.
Pls suggest? I know that it is not paid untill employee does not complete 5 years but what about in the case explained above?
Can any victim claim the gratuity in any of the above cases?
12th May 2014 From India, Mumbai
You are not eligible for Gratuity, since you have not completed 5 years service. On the contrary the employer has to give you retrenchment benefits only
12th May 2014 From India, Ahmadabad
This topic has been discussed in the forum several times, kindly do research to have a better idea.
Please find below the extract of conditions for retrenchment
2[25F. Conditions precedent to retrenchment of workmen. —No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay 4[for every completed year of continuous service] or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government 5[or such authority as may be specified by the appropriate Government by notification in the Official Gazette]].
12th May 2014 From India, Ahmadabad
Hi Mamta
Your query can be answered in two parts.
Part 1:
Since the employee has not completed 5 years hence is not eligible for gratuity.
Also since his/her employment or during the course of employment has not resulted in any permanent disability or death the gratuity cannot be paid ( case where payments are made for having less than 5 yrs of continuous services)
Part 2:
the employee has completed 1 yr of continuous service and hence has been retrenched/laid-off depending upon the nature of cause of termination.
I hope the employer gave prior notice (min 1 month) of retrenchment to the employees and had approval from appropriate authorities.
In case the retrenchment is valid and not void retrenchment compensation is paid to the employees in lieu (instead ) of the notice period at an aveage of 15 days salary.
I hope it clears all doubts now.
13th May 2014 From India, Pune
Dear Sir/Madam,
I have rendered my service in an organization for 5.8 years. I resigned on 28/02/2013... relieved on 8th March 2013... till date they have not settled my gratuity amount.. repeatedly i have forwarded my request through emails and letters... kindly suggest me sir... what are next step to be taken...
13th May 2014 From India, Hubli
Have you filled Form - 1 as per act please find below the extract
In case the employee is not paid the due amount of gratuity he should apply, ordinarily within thirty days, in Form-I to the employer. Is an employer fails to pay due gratuity even after the receipt of notice in Form-1, the claimant employee or his nominee or legal heir, may within ninety days of the occurrence of the case for the application, should apply in Form-IV, to the Controlling Authority for issuing direction to the employer. After conducting the enquiry as prescribed, the Controlling Authority will determine the amount payable and direct the employer to make the payment. If the employer fails to comply with the direction the Controlling Authority can direct the Collector to recover the amount due and pay to the applicant.
13th May 2014 From India, Ahmadabad
Dear Friend,
I fully agree with the views expressed by Siji. You may follow his advise to apply for legitimate Gratuity amount.
Sibabrata Majumdar
Management Consultants Legal & HR

13th May 2014 From India, Calcutta
Dear Friend,
They might have shown the gratuity component as part of your CTC. They can't deduct gratuity from your salary. Most of the Pvt organisations who are following the CTC structure do indicate the gratuity component in their CTC structure but they are not liable to pay the gratuity if you have not completed the mandatory 5 yrs service.
13th May 2014 From India, Lucknow
Dear Saji, thanku very much for your suggestion. i have already applied through form No. I... If you could kindly provide me Form IV, it would be of great help.. Thanking you. regards Sneha
14th May 2014 From India, Hubli
I am sorry it is not Form IV it is Form T

Please find the format as below you can get the forms downloaded from the Site

[See rule19]

Application for recovery of gratuity

Before the Controlling Authority under the Payment of Gratuity Act, 1972.

Application No ………………… Date …………………

Between ……………………………………

[Name in full of the applicant with address]


[Name in full of the employer with full address]

The applicant is an employee of the above-mentioned employer/a nominee of late …………… an employee of the above mentioned employer/a legal heir of late ………………, an employee of the above mentioned employer, and you were pleased to direct the said employer in your notice dated the ……………… under rule ………………… of the Payment of Gratuity (Central) Rules, 1972 for payment of a sum of Rs …………… as gratuity payable under the Payment of Gratuity Act, 1972.


The applicant submits that the said employer failed to pay the said amount of gratuity to me as directed by you although I approached him for payment.


The applicant therefore prays that a certificate may be issued under section ……………… of the said Act for the recovery of the said sum of Rs ………………… due to me as gratuity in terms of your direction.

Place Signature/Thumb impression


of the applicant
14th May 2014 From India, Ahmadabad
Dear Experts,
I have joined in pvt. ltd. company on 01.09.2009 and my services has been closed on 01.03.2014 (Total Service : 4 years 7 months)
Kindly whether I have eligible for gratuity or not.
Thanking you and regards..
15th May 2014 From India, Vijayawada
Mr Raju, You are not eligible for gratuity under Payment of Gratuity Act. R K Nair
15th May 2014 From India, Aizawl
Dear Mamta,
gratuity is a reward which is given by employer on doing a long term service with a single employer. it is other thing that as per law for entitlement of gratuity payment employee have to work in same company continuous of 05 years service. but there is no any law says to merge gratuity or bonus with CTC and if any employer is considered all these a part of CTC, then absolutely company have to pay it.. because it is a part of monthly CTC and when you considered it as monthly part of CTC then you have to pay.
16th May 2014 From India, Rudarpur
As per the Act, Gratuity is payable on completion of 5 years of continuous services. That means that there should not be any loss of pay (that may be due to suspension/ absenteeism etc.).

Many companies count mini 5 years, i.e. only on completion of 5 years. Few companies, who thinks/ care for employees, also consider if any employee had completed mini 4.6 years of service or had completed 240 days in 5th year, that too if there should be no loss of pay in first four years or in firth year.

If any employee retires (officially as per date of birth) even before completing 5 years of services, then gratuity is payable considering that the respective employee had completed 5 years of services. Say for example, if the retirement age in company is 58 years and company hires any candidate at the age of 54 years. Employee gets retired after 4 years of service with the company. Then also in this case the employee is eligible for gratuity. But, this is not applicable in case of resignation.

There are few smart companies that will retire an employee after attaining the age of retirement and continues the services as Consultant/ Adviser. In these cases, the gratuity is applicable till the end of service/ association with the company and not till the age of retirement, as it is counted as continuous services. However, if there was considerable gap before rehiring the candidate, then gratuity is not payable.

In case of a death of an employee, the gratuity is payable calculating for the period worked with the company and for the remaining years of services considering that the employee was to work till retirement with the same company.

17th May 2014 From India, New Delhi
Dear Mamta,
There are different rules of retrenchment and business shutdown (Bankrupt), Organisations are not liable to pay any amount in case of completely bankrupt (After proper legal formalities, which shows that they are really bankrupt), however in case of retrenchment, organisation are in financially bad in condition, but for not paying in gratuity or firing any employee, they have to give them (Employee) proper notice and pay them one month salary in advance.
Ram Chauhan
19th May 2014 From India, Perungudi
Dear Mamta ji,
I agree with mahwish khan. But if the service period six month and above in case your retrechment compensation will be 50% of basic. If service is completed one year, in that case, your compensation will be 15 day of wages. Your are not liable of gratuity before 5 year. Only two cases is not considered the condition of 5 years. 1. permanently disablement. 2. Death
22nd May 2014 From India, Pune
Dear Sir,
As per my opinion, CTC is cost to company. First of all, mostly company base CTC that means how much cost of employee. Thereafter, employer is legally right to pay the gratuity after complete 5 years.
29th May 2014 From India, Pune
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