Company Liable To Pay Retirement Gratuity Even When 5 Years Not Completed? - CiteHR
R.N.Khola
Labour Laws & Ir
Sharmavk05
Consultant
Saunee
Hr Manager

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Dear Seniors,
One of our employee has completed four years and attaining the retirement age next month as per the employment contract with the company. As per the gratuity act, gratuity is payable if:
4. Payment of gratuity.- (1) Gratuity shall
be payable to an
employee on the termination of his employment a
fter 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:
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:
I need to know on retirement gratuity. as he has not completed 5 years or even 4 years 8 months, then is the company still liable to pay him retirement gratuity.
Request to you please elaborate on this.
Thanks!
Saunee
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Dear Saunee, No. He is not entitled for getting any gratuity amount from the employer. With Regards, R N KHOLA
Thank you Mr. Khola. there is nothing called 'retirement gratuity'. it is only the gratuity paid to people on completion of prescribed time. regards, Saunee
Can you please help on his separation part? as this is first case for me, do we ask for resignation from the employee OR send him a letter end of services due to retirement.
is there any way prescribed?
regards
Neesu
Gratuity act requires 5 years service.
However if the company has considered Gratuity amount per month as part of CTC while issuing appointment letter and the employee has the copy of such CTC breakup he can ask for such gratuity amount as has been considered in his CTC, even if he has not completed 5 years.
Companies do show magnanimity by releasing gratuity even if not completed 5 years and if the employee has added value to the business.
Merrian Webster Dictionary says: Gratuity- "something given voluntarily or beyond obligation usually for some service"
Dear Viewers,
Gratuity ceiling has been enhanced from Rs. 10 lakhs to 20 lakhs From 1st Jan. 2016 vide Notification number38/37/2016 dated 04.08.2016. What would be the impact in income tax calculation for those employee , who have been paid gratuity but benefited through this change from 1st Jan to 31 March 2016?
Kind regards,
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