Partner - Risk Management
Private Consultant On Labour Laws
An employee rendering continuous service for a period of 240 days in a year will be deemed to have continued in service for 'one year as stipulated by section 2A of the Act -Thus an employee who has been in service for 240 days in the fifth year subsequent to first 4 years should be deemed to have completed continuous service of five years -His claim for gratuity is tenable.
Hence any employee serving a continuous service of 240 days in a year, he will be deemed to have continued in service for one year. Refer sections 2(a), 2(b), 2(c) & 2(e) of Payment of Gratuity Act, 1972.
As cited above one needs to complete 240 days in the fifth year of service to be eligible for gratuity.
Calculation of Gratutiy:
(BASIC +DA / 26 days in a Month) x 15 x No. of completed years of service.
[15 is the 15 days wage for every completed year of service]
If your total number of day=240*5 =1200 days then you are eligible for graduity
Thanks & Regards
Khirod Kumar Linka
5th December 2016 From India, Delhi
5th December 2016 From India, Ahmadabad
You have mentioned that you have worked from 23rd April 2012 to 18th Nov. 2016 in a company preforming for 5 days a week. Your total period, which qualifies for the payment of gratuity comes to 4 years 6 months and 25 days.This calculations is for the employees working in an organization performing 6 days a week. Since you're in an organisation working 5 days a week. You are definitely eligible for the payment of gratuity. Madras High Court supports the contentions
Member Since August, 2011
5th December 2016 From India, Mumbai
The number of days (240 in the original act and 180 days in the court decision) were based on the assumption that the organisation has a 6 day working week - basically one weekly off as required by the law.
If your organisation has a 5 day week, the additional weekly off is counted as working and present.
Futher, all leave (approved or unapproved) during the period is also counted as working, unless the absence results in "Service Break", which would be clearly defined as such in the Standing Orders (service break if defined in the HR Manual of the company would not count as service break under the gratuity act)
6th January 2017 From India, Mumbai