rajesh-kakkad1
I was with a coop banks on 5 year's contract which was further extended for several one year contracts resulting in more than 8 years of continuous service. Those contracts said it included ex-gratia payment in monthly salary. As gratuity is legally payable after 5 years of continuous service, am I entitled to gratuity on end of employment, as ex-gratia and gratuity are not same.
From India, Ahmedabad
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Umakanthan53
Labour Law & Hr Consultant

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umakanthan53
5884

Dear Rajesh,

There is no mention about the total number of employees employed in the co-operative bank to know the applicability of the Payment of Gratuity Act,1972 to it.
Assuming that the bank coming under the purview of the PGA, whatever be the mode of employment whether permanent, temporary, casual or contract basis including fixed term direct contract or through third party, once such an employee completes the minimum qualifying continuous Service of 5 years there, he becomes eligible to claim gratuiy under Act on his termination of employment due to resignation or expiry of the contract once for all without any further extension.

Coming to the question of monthly payment of ex gratia, it cannot replace the statutory gratuity payable for ex gratia is a separate payment made at the discretion of the employer whereas gratuity is his statutory obligation payable only on the termination of employment that too in a lumpsum. Therefore, payment of ex gratia by the employer at his will to an employee while in service, irrespective of its reason for or mode of payment cannot be a substitute for the payment of statutory gratuity on the termination of his employment.

From India, Salem

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