PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Labour Law & Hr Consultant
Freelancer In Hr &indirect Taxes For
Sr. Hr Executive
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A warm welcome back to you. Gratuity, being a statutory terminal benefit of employment, is not optional on the part of either the Employer or the employee once the Payment of Gratuity Act,1972 becomes applicable to an industrial Establishment under the Act.
Whatever the mode of wage and salary administration, the liability to pay gratuity and the right to claim arise from the day one of the application of the Act to the establishment as well as from the day one of the commencement of the service of the employees in the organization.
The important factors for calculation of gratuity are the last drawn salary comprising only of the sum of basic and dearness allowance and the total no. of years of continuous service rendered by the employee right from the date of his/her appointment till the date of termination of employment.
Therefore, you have to pay gratuity to the employee for his entire service of six years based on his last drawn salary.
From India, Salem
AvikaYou will have to count his service as 6 years, please.
From India, New Delhi
bijay_majumdarGratuity is applicable to the establishment from the day its in to operation and the day employees are taken on roll.
From India, Vadodara
The Payment of Gratuity Act is applicable from the day the employee strength of your Company reached 10. The employee in question was associated with you from the beginning. Hence, you have to calculate his service from the day your employee strength is 10. If he has completed 5 years of service he is eligible for gratuity. The gratuity is calculated based on the last salary drawn by him.
Labour Law Consultant
From India, Kolkata
umakanthan53Just a follow-on remark to the reply of Mr.Lakshmanan.
The poster has not mentioned the type of the establishment run by the Company. For the application purpose of the Act, no minimum number of employees is required in respect of the entities mentioned under clause (a) of s.s (3) of Section 1 of the PG Act,1972. It is required only in respect of establishment falling u/s 1(3)(b) and (c) only.
Even in respect of these establishments falling under clause (b) or (c), the entire service of the existing employees including the service prior to the date of of application of the Act has to be taken into account, if the termination of employment takes place on or after the date of application of the Act.
From India, Salem
abhishek unniThe answer lies in your question itself.
As you stated that the company introduced gratuity 2 years later, so the person who was with the company for 6 years wouldn't be eligible for gratuity as he the only completed 4 years considering that gratuity was introduced after 2 years.
I hope you found this information useful.
If you have any queries regarding any other labour laws please feel free to contact me @8356832404
From India, Thane