Queries
Dear Seniors, What is meant by Break in Service as per Gratuity Act? Do private organization can follow this ? Or only it is limited to Government Organization only?
Thanks in advance.

26th October 2017 From India, Pune

PARTICIPATING IN DISCUSSION:
Madhu.T.K
Industrial Relations And Labour Laws
Umakanthan53
Labour Law & Hr Consultant
+2 Others

Dear Prashanth,
In the context of the Payment of Gratuity Act,1972, break in service refers to the period during which the continuity of the service of an employee stands snapped while still the contract of employment between the employer and the employee subsists. In other words, any period of interruptions in service other than those deemed to be non-interruptions u/s 2-A of the Act is a break in service of the employee for the purpose of gratuity.
Every establishment falling within the ambit of Sec.1(3) of the PGAct,1972 has to follow it irrespective of its sectoral classification.
26th October 2017 From India, Salem
Dear Prashant ji,

While appreciating the reply by Umakanthan Sir to your query, I would just like to add as under.

The definition of 'Continuous Service' was introduced by insertion of an independent section 2-A by way of an amendment 1984 (effected from 1981) which was following the H'ble SC judgement in Lalappa Lingappa (1981 I LLJ 308) wherein it has been held (1) that 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 and (2) that the badli employees were not covered by substantive part but come with in the then existing explanation 'I' and therefore not entitled to payment of Gratuity for the badli period i.e. in respect of years in which no work was allotted to them due to their failure to report to duty. To ameliorate the hardship arising out of the ruling of H'ble SC and confer the right of payment of Gratuity to badli workers and others who work for 240 days or more in a year / years, the Parliament re-enacted the definition of 'Continuous Service' vide independent section 2-A.
26th October 2017 From India, Mumbai
In continuation to what Umakanthan Sir and Korgaonkarji have said I would also like to add that in respect of employees of establishments which work 5 days in a week, the minimum number of days for continuous service is 190. This applies to employees employed below the ground of a mine also even if the mine works for 6 days a week. Moreover, this 240/ 190 days, as the case may be, is inclusive of all paid holidays, weekly off days, leave days and even the days on which the employee was on leave without pay following any employment injury. Please note that we will not pay wages in respect of an employee covered by ESI when he takes leave on account of accident, but these days will not interrupt his service. At the same time any loss of pay leave which is not regularised later on even as LOP days will be treated as interruption of service. The same was also discussed in the Lalappa case above mentioned.


Madhu T K
27th October 2017 From India, Kannur
Dear Sirs,

With regard to above topics, just need your thoughts in below.

I had worked for ABC company for one year and resigned and joined XYZ company and again come back worked with ABC company for four years. Now I have worked for total five years am I entitle for gratuity or not.
1st November 2017 From India, New Delhi
Your date of rejoining the service is the date of joining and the present service cannot be claimed as in continuation to your previous service. When you rejoined the service you should have got a new appointment order and it is based on that you have joined the company in your second spell and as such there is no scope of clubbing the previous service. It is possible if the HR had done any mistake due to ignorance. If that is the case I will not advise you that you should take advantage of that poor fellow who had allowed you to rejoin when you were in search of a job after you found that the company that your joined does not match your expectations.

Madhu T K
1st November 2017 From India, Kannur
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