Dear Colleagues Would request you to please update me about the latest on the minimum service required for the gratuity claim. Earlier it was 5 yrs and in a few cases, it can be paid on completion of 4 yrs and 240 days as per the various court orders.

From India, Noida
Labour Law & Hr Consultant
Doctor Siva Global Hr
Assistant General Manager - Hr
Management Consultancy


The explicit provision in the PG Act 1972 is for having a qualified service of 5 years, but as per Section 2A thereof service of 240 days suffices to qualify as completed year of service for an year. So there are a few judgements of High Court ordering for payment of gratuity with 2 years and more than 240 days continuous service. This position continues
From India, Mumbai

Dear Colleague,
The Gratuity Act stipulates completion of 5 years of continuous to become eligible to claim gratuity (except in case of death or disablement, where the 5 years condition is relaxed)

There are few judgements like Madras High Court Judgement which need to be adhered and says that if an employee completes 4 years and 240days in the 5th year then he /she is eligible to get Gratuity. In short the Provisions of the Act remains same but interpretation has changed due to the Judgement

From India, Chennai

Dear Bramh Prakash,

The term " Continuous Service ", occurring in sec.4(1) of the PG Act,1972 in the context of minimum qualifying service for payment of gratuity under the Act, has been already defined u/s 2-A of the Act. It remains the same till now. While interpreting the same, the hon'ble Madras High Court in Mettur Beardsel Ltd., v Regional Labor Commissioner (Central) [ 1998 LLR 1072 ] held that if an employee has completed 240 days of continuous service under the employer in the 5th year of service prior to the date of termination of his employment, he becomes eligible to gratuity as if he has served for 5 years. Though it is a judgment of a High Court only, no contrary judgment from any other High Court is available so far. In addition, the Madras H.C referred to the ratio decidendi of the judgment of the Supreme Court in Surendra Kumar Verma v. Central Government Industrial Tribunal [ 1980 (4) SCC 433 ] on the interpretation of the term 'continuous service ' u/s 25-B of the ID Act,1947 which is in pari materia. Again in 2011, the Madras High Court held the same view in yet another case between the Management of Salem Textiles Ltd and the Appellate Authority under the PGA, Coimbatore.

Yet, still some employers of establishments situated in other States erroneously contend that the Madras High Court judgment will not bind establishments situated in other States. Since the PGA,1972 is a Central Legislation uniformity of judicial interpretation is a sine qua non for the enforcement of the Act across the country. Therefore, in the absence of a contrary judgment by any other State High Court or a decision by the Apex Court on the interpretation of a specific question of law, the decision of a particular High Court which alone had the occasion to decide the issue and decided in a manner to advance the benefits of a beneficial legislation should be adopted by all.

If we dispassionately analyse the provisions of sec.2-A (2), in appropriate cases falling under clause (a)(i), it can be 190 days in the 5th year.

In addition, the position regarding interpretation of the term for the purpose of gratuity under the yet to be implemented Code on Social Security,2020 would also be the same by virtue of section 54 of the Code.

From India, Salem
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