Labour Law & Hr Consultant
Industrial Relations And Labour Laws
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Loginmiraclelogistics & Management) Pg
+3 Others

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Employee died and had nominated his mother under Payment of Gratuity Act. Unfortunately, mother also died shortly thereafter.
Now father of employee claims to be sole heir. Can employer release payment without verification OR is Succession Certificate required?

If there is any change in the nomination given by the employee in form F, gratuity will become payable to the legal representative authorised by the legal/ succession certificate only. In case of any dispute, you can remit the amount of gratuity to the Labour Officer who is the appropriate authority under the Payment of Gratuity Act.

I joined KPO Company on 3-8-2009, I will relived from company on 3-8-2014 i.e. I need to complete 45 days of notice period. Then I had successfully completed 5 years and 1day of service in single organisation. Now my question is 5 years of service, includes 120 days of Loss of pay (informed and uninformed days), kindly explain whether I am eligible for gratuity or not as per Gratuity Act 1972. Kindly send my legal documents or link.
Note: i have worked for 278 days in forth year i.e. 4-5. whether i can submit FORM F
I need clarification on which basic gratuity is calculated in our company. As per 1972 gratuity act
1. On the completion of 5 years of service (with out loss of pay i.e. informed and uninformed in the service)
2. On the completion of 5 years of service (with loss of pay i.e. informed and uninformed in the service)
3. On the completion of 5 years of service including notice period (with or without loss of pay i.e. informed and uninformed in the service)[/QUOTE]

If you have worked for 240 days in each year you are said to have worked for 5 continuous years and are eligible for gratuity. In case during a year you have not worked for 240 days and the loss of pay remained unauthorised then you will not get eligible for gratuity. This 240 days working includes all paid leave days, weekly off days and holidays.
There is no separate treatment with regard to notice period, loss of pay etc. If eligible for gratuity you will get it and what makes you eligible to gratuity is what I have stated above, ie, continuous service (without loss of pay/ paid days of 240 days in a year) of five years

Almost all employers would treat the "unauthorised leave" (loss of pay, unauthorised leave = absent) as a break-in-service. We have no clue from you as to how your LOP days were treated in your service conditions. If they condoned this period and ratified later on as 'part of LOP leave' then you might have a chance to have it reckoned as 'continuous service' . And also you mentioned as 'informed' and 'uninformed' leave which requires clarity. Moreover if it were to be a continuous LOP of 102 days in a single calendar/service year there is no chance of clocking stipulated 240 days of working days (including holidays) in every year and for 5 years to be eligible for gratuity. Better get these sorted out at your office.

Dear Seniors
Greetings of the day !!!!
If a retired person , engaged again in a contractual service for consecutive five years . Can he eligible for Gratuity .
His age is nearly 66 years . During his actual retirement he got his due gratuity at the age of 60 years .
Now can he claim it again after completion of 5 years in a contractual service.

Certainly YES. Under Payment of Gratuity Act there is no age specified and nor there any bar on employment after superannuation or employment after collecting gratuity. Therefore, if the extended service after superannuation and collecting gratuity till date of superannuation or new service after retirement, exceeds 5 years, naturally, he is eligible to get gratuity again for that extended period or new service after retirement, as the case may be.
For being eligible to gratuity, it is not necessary that one should be in regular rolls of the company but it is available to those who are employed on fixed term contract.
Please find the two attachments which support the above.

Attached Files
File Type: doc Gratuity for service after superannuation.doc (77.5 KB, 489 views)
File Type: docx Gratuity to FTC.docx (17.7 KB, 273 views)

This is in continuation of what M/S Madhu and Kumar stated regarding computation of 240 days for the purpose of entitlement to gratuity.For the sake of clarity and ready reference, let me give an extract of "the Statement of Objects and Reasons"of the the P.G ( Second Amendment ) Act,1984 as hereunder:

"2.The Supreme Court had in its judgment in the case of Lalappa Lingappa v. Lakshmi Vishnu Textile Mills, Sholapur [ 1981(1) LLJ.308 ] held that in terms of the existing definition of "continuous service" in sec.2(c) of the Act, the permanent employees were not entitled to payment of gratuity for the years they remained absent without leave and had actually worked for less than 240 days in a year. It has been represented that the enforcement of this ruling resulted in denial of gratuity to a number of employees, whose short term absence had remained unregularised due to lack of appreciation of its significance for the purpose of working out their entitlement to gratuity. It is, therefore, now proposed to amend the definition of "continuous service" suitably and to specifically provide that a period of absence in respect of which no punishment or penalty has been imposed would not operate to interrupt the continuity of service for the purpose of payment of gratuity."

In the light of the above reasons, if we analyse Section 2-A of the Act, it would be easily discernible that

ss(1) of sec.2 creates a legal fiction for arriving at the number of days constituting continuous service in any given stretch of period of service of an employee under the same establishment inclusive of interruptions that could be treated as non-interruptions.They are:(1)interruption on account of sickness (2) interruption on a/c of accident (3) interruption on a/c of leave (4) interruption on a/c of absence from duty without leave ( not being absence in respect of which an order 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,(5) lay-off (6) strike (7) lock-out and (8) cessation of work not due to any fault of the employee.

ss(2) specifies the no. of days in different strecth of periods in cl (a) and (b) to be deemed as continuous service as per ss(1).

The Explanatory Clause speaks about further interruptions due to other reasons.

Therefore, the Leave on Loss of Pay, whrther informed or uninformed, in the absence of any order or service rule treating the same as break in service, would count for computing continuous service for the purpose of gratuity.

Thanks Mr.Umakanthan for the detailed clarification on the issue. I forgot to mention, that any interruption constituting a break in service (resulting in set the clock backwards) in anybody's "continuous service" should be as a result of a 'speaking order' passed by the competent authority to that effect, mentioning the reasons therefor and the process with which the such order emanated. This has been the rule and practice followed in many big organisations where detailed HR policy, rules and regulations are in vogue. At the same time this rule is very rarely used for the simple reason such 'breaks' revert the long serving employees back to 'fresher' nullifying the service rendered by them. Such breaks often seen in 'habitual absentees' who are generally known as heavy drinkers, mentally upset, chronically ill, highly indebted, a spent thrift & so on. Many employers condone such short breaks with LOP provided they are otherwise competent and hard working and well behaved in work places taking a lenient view. We have seen many such persons specially in PSUs.
I joined a Company on 3-8-2009, I will relived from company on 3-8-2014 i.e. I need to complete 45 days of notice period. Then I will successfully completed 5 years and 1day of service in single organization. Now my question is 5 years of service, includes 105 days of Loss of pay (informed and uninformed days), kindly explain whether I am eligible for gratuity or not as per Gratuity Act 1972. Kindly send my legal documents or link.
Attendance is as follows i.e. 1st year I have worked for 331 days, in 2nd year I have worked for 343 days, in 3rd year I have worked for 332 days, in 4th year I have worked for 355 days and in 5th year I have worked for 350 days. In that 32 LOP in 1st year, 21 in 2nd year, 36 in 3rd year, 10 in 4th year and 6 in 5th year, total 105 loss of pay in 5 years of service
PFAC of my attendance, i kindly reply whether i am eligible for gratuity or not?

Attached Files
File Type: xls Attendance.xls (31.5 KB, 91 views)

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