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A Contract workmen is working in the organisation for past 15 years and his last working day is 31.01.2017. Due to his disease (cancer) he was unable to work but he got ESI (90% of wages ) from 01.02.2017 to 27.11.2018. For the calculation of gratuity which dated should be take?????
Whether his last working date (or) his death date??????
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Dear Alex, SINCE you have said that his last working day was 31.01.2017.
Take only his last working day for Gratuity calculation.
Date of death will be last working day.
27 Nov 2018.
In Gratuity Act which section indicates this????
As per Section 4 of the Payment of Gratuity Act 1972, Gratuity becomes payable on the date of termination of service.While on ESI benefit period one is still in service and the termination of service has happened only on 27th November 2018.
Whichever took place earlier will be the date for calculation of Gratuity [last day at work or death]. Payment of Gratuity Act is not concerned as to what ESIC does to its subscribers.
Thanks and Regards
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Combined reading of sec 2A and 4 of POG Act shows that date of death is the date to be reckoned if employee has not resigned or employee was not terminated from last working day.
Varghese Mathew
Labour law/HR Adviser
Unless there is no termination on medical grounds, the employee remain in continuous service covering the period of sickness. Hence, in this case the gratuity is payable till the date of his death.
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