Hello, Kindly clarify my query regarding Gratuity. An employee has completed 6 years 5 months in service and has resigned. His last working day is 15 days from now.
Now he has PL leaves as per the Maharashtra S&E Act accumulated to the tune of 45 days.

The employee is now quoting Sec 4(2) of the Gratuity act 1972 and asking to adjust his 45 days post which he will be eligible for Gratuity payment for 7 years instead of 6 years.
My query is can PL adjustment be done in such a way that he can seek gratuity payment for 7 years as if we adjust PL and his notice period he would have completed 6 years 7 months. Please advise.

From India, Mumbai
Industrial Relations And Labour Laws
Management Consultancy
+1 Other

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Gratuity is payable at the cessation of the employment. If the termination/resignation is effective after 6 years and 6 months, then he would be entitled to gratuity for 7 years, otherwise not.

-S.K. Mittal
Industrial & Labour Lawyer

From India, Faridabad

Go by the saying 'You cannot have the cake and eat it too'. The employee has worked for only 6 years and 5.5 months which clearly entitles him to only 6 years continuous service. There is no provision in the Payment of Gratuity Act 1972 for deeming leave payment period to be reckonable service for calculation of Gratuity, in deed the provision in Section 2A of the Act defining Continuous Service is 'actually worked', so there is no scope for any deeming provision.
From India, Mumbai

The leave encashment cannot qualify service period. If he has 45 days PL pending he can encash it and get relieved. Otherwise he can avail that 45 days leave and join back once the leave is over and then get relieved. But whether to grant leave to an employee (that also to an employee who has resigned) is purely management prerogative. You can refuse leave but can allow encashment. If so, he will be eligible for 6 years' gratuity only.
From India, Kannur

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