If the company has more than 10 employees ,it would generally fall under the provisions of Payment of gratuity Act.
4 years 8 months service may not make you eligible for gratuity as 5 years continuous service is prescribed by the act.
25th July 2018 From India, Pune
Mr Nathrao: Earlier today I spoke to one of my ex Hr Managers who appraised to me saying that 8 months is calculated as 1 year in the Gratuity act so if a employee works for 4 years and 8 months he would be still eligible for Gratuity.
Since I was not sure about i have used this forum so that experienced professionals can help me in making a decision.
25th July 2018
If payment of gratuity act whether mentioned or not mentioned in the appointment order, it is irrespective.
You will be eligible for the gratuity. The payment of gratuity ( second amendment) act, 1984 clarifies that if an employee completed 4 years 8 months of service with more than 10 employees in that organisation will be eligible for gratuity.
i.e; 240 days = 1 year where the company follows 5 days a week.
The formula for gratuity is as follows;
Payment of Gratuity = Basic salary* No. of years of service* 15/26
Hope this may help you.
Seniors please correct me if i m wrong.
26th July 2018 From India, Hyderabad
The basic condition for qualifying gratuity payment under the act is still 5 year of continuous service. However, in order to count 01 year continuous (uninterrupted) service the below is used:-
In the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than-
(i) 190 days, if employed below the ground in a mine, or
(ii) (ii) 240 days, in any other case, except when he is employed in seasonal establishment.
Pls be noted the 240 days (which generally told as 08 month) has been taken on basis of Point (i), which initially reformed to count 01 year service for the mid period (1st to 4th year service). Means if an employee work for 240 or more days in a service year than it will be countable as 01 year. That does not mean 240 days will be equal to 05th year . First the employee need to complete 05th year than only the 240 days grace can be taken. This is my opinion on basis of the language drafted in the Act.
However, there are cases (court verdict) where employees got gratuity for 4 years and 08 months service, but still there is no AMENDMENT in the basic Act which shows the eligible period as 04 year 08 month. Hence in the first instance the company (employer) can deny to pay the gratuity for less than 05 year service. But if the employee put the case to the court and the lawyer give example of previous court verdict than the court may direct the employer to pay the gratuity.
There are so many discussion happened on the topic and still it is all time topic for HR professionals. Hope my points are cleared. Fellow members can put more light or correct me.
26th July 2018 From India, Delhi
Appreciations to Pan Singh Dangwal for the clarification.
27th July 2018 From India, Madras
As an aspirants for gratuity, job change you consider yourself eligible for gratuity as some one gave an information.
The law says, one is eligible for gratuity after completion of 5 years of service. It is neither me nor any members of the forum would not cahnge the law and act to make one eligible.
There is no issue if your employer is considering to pay you gratuity is a welcome decission or other wise complete 5 years service to receive gratuity and leave. Knock the door of court, if not for 4.8 years.
29th July 2018 From India, Mumbai
On this Forum I am learning new things every time about Gratuity eligibility on 4 years & 8 months / 4 years & 240 days and so on.
This matter is well discussed on this forum on many occasions.
If there is such an amendment namely, Payment of Gratuity (second amendment) Act, 1984 clarifying if an employee complets 4 years 8 months of service, he is eligible for gratuity, then what is discussed up till now has no meaning. Even the case laws discussed are nullity or void.
I concur with our learned Prabhat ji to some extent. What he said is not applicable in TN and Kerala.
29th July 2018 From India, Mumbai
The gratuity will be paid when an employee dies before completion of 5 years service, and will be paid to the dependent family member or nominee
30th July 2018 From India, Pune
There has been instances and court verdicts wherin the claim of Gratuity was approved upon completion of a continuous service of 4 years and 240 days also. The case of Mettur Beardshell Ltd Vs RLC as decided by the honorable Madras High Court in 1987; is submitted as precedent, while in many cases the judgement went against the aforesaid. Hence there is a probability that court may deem completion of 4 years and 240 as eligible for Gratuity payment. Attached is an extract of the same.
30th July 2018 From India, Delhi
This forum is an open forum and any one is free to write here any thing.
You are HR Professional. HR Professional is supposed to be an expert above all. HR Professional while talking or writting any thing should be very careful & studious, particularly when he use the title as HR Professional.
I am very sorry to say it here that I have to tell this to HR Professional. You need to study the PoG Act, rules and case laws thereunder.
Please bear in mind that we are here to discuss the law and not the practise you adopted. One can have different view in certain matter but it should be supported with logical reasoning.
I am here to learn from the members like you.
1st August 2018 From India, Mumbai
1st August 2018 From India, Delhi
Eligibility is 5 Years continuous service is the criteria for eligibility not essential for detail and disablement - Example. if a person has worked for 5 years and 6 months, it is deemed 6 years service and less than 6 months not to be considered.
Section 4 of the Payment of Gratuity Act, 1972 provides that an employee will entitled to gratuity on completion of continuous service of 5 years and while clarifying the 5 years complete service, Andhra Pradesh High Court in P. Raghuvulu and Sons v. Additional Labour Court ,  , had held that the minimum period for becoming eligible for payment of gratuity should not be less than 5 years since it should be complete 5 year service.
4th August 2018 From India, Mumbai
Request to give full citation detail of case :- reported in LLR / CLR/ FLR / LLJ not just the year.
Andhra Pradesh High Court in P. Raghuvulu and Sons v. Additional Labour Court , 
If you have the soft copy then share on the thread
4th August 2018 From India, Andheri
2. Your entitlement to gratuity does not matter on what is/ what is NOT written in your letter of appointment letter. If there are 10 or more employees in the company and you have worked for 5 years at least, then you are entitled to gratuity.
5th August 2018 From India, Kolkata
5th August 2018 From India, Mumbai
i want to prepare a circular for informing all the employee applying gratuity from 01.04.2017 as per our company terms. but i can't understand how write these.
so please suggest me a format to issue formal circular on behalf of company.
I am not HR Expert
6th August 2018 From India, Noida
Please see what Section 4 in The Payment of Gratuity Act, 1972 says:
Gratuity shall be payable to an employee on the termination of his employment after 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:
Word termination is important for considering continuous service. No gratuity shall be payable to employee if s/he resigns of his / her own before completion 5 year of service.
9th August 2018 From India, Mumbai
WRT statement above I would add that 5 years continuous service as defined in the Act is necessary for claim to gratuity.
Your claim to gratuity does not arise on 241st day of 5 year.(4years.241 days)
Claim arises only on completing 5 years and in last year worker/employee has done 240 days service.
Court orders may be due to a reason or facts in particular case.HR cannot be forced to pay gratuity on basis of a Honble court decision given in other state or earlier.
HR will simply tell the claimant get a court order to this effect in your particular case.
Comments on Indian Laws: METTUR BEARDSELL LTD , Madras vs. REGIONAL LABOUR COMMISIONOR (CENTRAL)-ELIGIBILITY FOR GRATUITY
10th August 2018 From India, Pune
Amount is calculated- (Last Basic Salary Drawn/26)*15*No. of Years.
Here no. of years will be 5.
For Reference you can check Gratuity Act.
Note- Amount is Non-taxable upto 20 Lakhs.
11th August 2018 From India, Hyderabad
14th August 2018
The meaning of gratuity is a A sum of money paid to an employee at the end of a period of employment.
GRATUITY RULES BY "INDIAN GRATUITY ACT"
According to gratuity act, every employer, who has 10 are more employee, has to follow gratuity law. This law is applicable to government and private sector both. The government also give tax exemption on the gratuity payment.
You will get the gratuity only after the completion of 5 years in the service. Also, there should not be any break in the service. It must be continuous.
Note, the condition of 5 years service has a small relaxation. In the last year, mere service of 240 days would be considered as one year. Hence, You would be eligible for the gratuity after 4 years and 240 days of continuous service.
If are working in an organisation which works for 5 days in a week or less, mere 190 days would be counted as last one year. Therefore, in such case, you would be eligible for the gratuity after 4 years and 190 days.
14th August 2018 From India
Firstly, it depends on the no. of employees your company has, it is more than 10 employees that means your company is liable to pay gratuity to its employees. Gratuity is payable on last drawn basic / basic +DA salary (if DA is a component in your salary structure).
It dosent matter if it is mentioned in your Appointment letter or not, neither does it make a difference if it is not mentioned in the HR manual.
If your company has more than 10 employees, it is applicable by law and the company is liable to pay.
6th September 2018 From India, Delhi
You have not given full facts of your case. With the limited fact, - 1. if your organisation is covered under this Act than you will be paid Gratuity as per Act after completion of 5 years that is 6th Dec.
2. If your employer is progressive Employer and wants to create a Good Brand Image in the employment market than he may consider your case as a gesture of goodwill.
V K Sharma
14th September 2018 From India, Delhi
of gratuity is worked out is not at all mentioned except one member who states that " Gratuity is payable on last drawn basic / basic +DA salary (if DA is a component in your salary structure).
More clarification is required on Gratuity calculation which says ...`basic/basic +DA salary (if DA is a component of in your salary structure)` As I understand there are two methods of salary structure as adopted by various employers : (i) basic + DA + other component (ii) All inclusive Consolidated Salary which does not give any break-up of the salary.
If the second method is adopted by the employers, then full salary has to be taken for calculation of Gratuity. Is it correct?
More knowledgeable person on the subject may please explain this?
20th October 2018 From India, Thane
After a lot of claims by employees for gratuity with the gratuity commissioner, the employers have learnt a hard lesson and stopped mentioning the gratuity in the appointment letter thereby avoiding payment altogether, and only payable if the employee has completed 5 years of service to comply with the statutory requirement. So these conditions need to be kept in mind which condition leads to payment of gratuity.
21st October 2018 From India, Mumbai