Need some clarification on continues service term used in Gratuity act - CiteHR
Dinesh Divekar
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Dear Friends & Seniors, I need some clarification on continues service term used in Gratuity act. I explain my confusion with the help of an example.
An employee name “X” joined a company on 01/01/2013
He left his job on 30/08/2019.
Year wise payable days (PD) or days for which he was paid including paid leave and holidays but excluded unauthorized absent and leave without pay of Mr. X were
Year PD
2013 305
2014 350
2015 333
2016 230
2017 305
2018 299
2019 240
Question 1: Was Mr. “X” in continuous service?
Question 2: If yes, than for how many years?
Regards,
Rahul Sindhwani

(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service,including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 3*** treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
For the purposes of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which--
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 or (14 of 1947), under any other law applicable to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.]
From the records shown the Employee is in continuous service. Assuming the number of days is calendar years, as his date of entry is 01-01-2013, he is eligible for 7 years gratuity (50% of the last drawn salary per year of service)

Dear Babu Alexander,
You have given a long reply quoting the extract of the Gratuity Act nevertheless, in the present case, the poster has quoted the number of days for which he was paid. From the year 2013 till the current year i.e. 2019, in each year the employee had unauthorised absence and he was not paid salaries and wages. Against this backdrop how the service can be construed as "continuous"? Can you please explain?
I am writing this as a learner, therefore, please do not take my question otherwise.
Thanks,
Dinesh Divekar

Mr. Dinesh Divekar.
I agree with your point. For any unauthorized absence, the Management ought to have initiated disciplinary action as per standing orders and concluded a break in service, if any year, in writing, and had been communicated to the employee, (3*** treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), In the absence of any such documentation, the employee is eligible for Gratuity for that year if had put in 240 days.
warm regards

Dear Mr Babu Alexander,
Thanks for your clarifying reply. That means HR professionals should not initiate disciplinary action on the employee absence but after awarding punishment, it is important to communicate to employee on forfeiture of the gratuity. A timely communication is of essence.
Thanks,
Dinesh Divekar

Dear Mr. Alexander & Mr. Divekar,
Thank you for the information provided.
But I have some doubts which i would like to share.
1. In 2016, Mr. X received payment of only 230 days from the company. (Matter not related with layoff)
In such case, would it be considered as complete year of service or not ?
2. If not, than can we consider his service of 6 year rather 7 for the payment of gratuity ?
Regards,
Rahul Sindhwani

I can answer the question only if i get the following information
1) In 2016 how may days the Factory was working with full strength of workmen?
2) The employee received only 230 days payment. What happened to the remaining days. Was he on leave without wages? or any medical leave ?

Dear Mr. Alexander,
1. Factory run on 301 days (close only on Sundays and other Holidays).
2. Mr. X was absent without any information. But this absenteeism was staggered e.g. 10 days at a time.

If you have not initiated any action for unauthorized absenteeism of X, then it is deemed ' authorized leave without wages' . "leave, absence from duty without leave (not being absence in respect of which an order 3*** treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment)" Then continuity of service is established.
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