Anonymous
I have some situations that is related to payment of gratuity:-
Situation No-1 :- If an employee completed his/her five years of service in a company but he/she was on leave for one year and Now after one year he/she came and resign from his/her service , In this situation is company liable to pay gratuity for 5 years or for 6 years?
Situation No-2 :-If an employee completed his/her five years of service in a company but he/she was on leave for 4 months in his/her 6th year of service and after 4 months he/she came and join his/her service, now is company liable to pay gratuity for his/her leaves of 4 months or not?
And sorry - please don't judge me if I'm wrong in any situation.

From India, Gurgaon
If the leave for one year was "unpaid leave" or "unauthorized absence" or order treating the same as "break-in-service" was passed by the employer, then the employee will not be entitled to be paid gratuity for that year.
If the employee works for 240 days in any period of 12 months, the same is treated to be 'continuous service', hence even if he was on leave for 4 months, the period of 8 months will qualify him for gratuity for that year.
- S. K. Mittal
9319956443

From India, Faridabad
Dear friend,

Hope that you would agree with the presumption that the very description of your post indicates that "the leave" mentioned in both the situations is authorised leave on loss of pay only and not unauthorised absence from duty involving disciplinary action under the service rules.

The gratuity contemplated under the Payment of Gratuity Act,1972 hinges on two conditions viz., "Eligibility for gratuity " and "Entitlement to gratuity" and every employee staking his claim for gratuity under the Act upon the termination of his employment other than by reason of his death or disablement due to accident or disease should fulfil these two conditions.

Eligibility for gratuity is attained by an employee by means of rendering not less than 5 years of continuous service in the same establishment on the date of termination of his/her employment.

Entitlement to gratuity for every such year of continuous service is acquired by the employee by completing 240 days service in a period of 12 calendar months as specified in sec.2-A of the Act. Section 2-A of the Act introduces a legal fiction by recognizing certain interruptions in service as non-interruptions for the purpose of computing continuous service in a given block of 12 months or 6 months as the case be.

If we critically analyze the definition u/s 2-A, the interruptions deemed as non-interruptions for the purpose of the section are of two types viz., interruptions attributable on the part of the employee which are leave and absence from duty which is not treated as break in service as per the rules of the establishment and all other interruptions like accident , sickness, lay off, strike, lock out and other kinds of involuntary cessation of work are interruptions not attributable on the part of the employee.

Therefore, when the employee remains on leave without wages for the entire year he automatically loses his entitlement to gratuity for that particular year though that year is taken into account for computing his eligibility of minimum qualifying service of not less than 5 years.

On the other hand, if he remains on leave without wages only for 4 months in a period of 12 months, he is entitled to gratuity for the entire year as he would be completing 240 days of service in the remaining period.

From India, Salem

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