Industrial Relations And Labour Laws
Labour Laws & Ir
Hr - Generalist
Anitha G S
H R Manager
G K Sharma
Payroll Executive
Nand Kumar
Asst. Mgr.- Hr
"Vishal Saxena"
Hrd-though M Still A Student
+11 Others

Thread Started by #Parkorbit

MY FRIEND COMPLETED 4YRS + 240 DAYS ...IS He eligible for Gratuity? There is No part of gratuity in CTC === even after this can he claim gratuity? Pls advise. Thanks
14th March 2008 From India, Mumbai
As per Payment of Gratuity Act, 1972, any employees become elegible for the gratuity when he has completed five years service. The employee who has worked for 240 days in a year, then a year is treated complete year. Since the employee has completed four years and 240 days, he/she will be elegible for gratuity but after the completion of five years whether works for remaining period beyound 240 days or not.
G K Sharma
14th March 2008
The date of completion of 5 years will be taken from the date of joing to the date of leaving service. The issue of 240 days comes only to decide continuous service. Therefore, if one works for 4 years and 240 days, it is not neccessary that he is eligible for gratuity but on the date of leaving he should have 5 years total service.
14th March 2008 From India, Kannur
Your friend is eligable for gratuity.As per Income Tax Act 1961 If his company cover under Payment of gratuity Act then the Days/Month Fraction is add as a next year.
But Please take legal Advice also
14th March 2008 From India, Pune
he will be entiled for gratuity for 5 years . this is because he has worked for 240 days which is above 6 months and if the fraction months is 6 or aove, then the fraction is added to consider one complete year
15th March 2008 From India, Mumbai
what is a year of service under Gratuity act?.
An Year of service means, for the purpose of calculation gratuity, he should have worked for 240 days in that calendar year. For an instance an employee had worked for more 7 years and his no of days worked in each are as follows:
Assume that the total No of days per year is 303 days
1 st year: 300 days
2nd year: 255 days
3rd year: 298 days
4th year: 129 days
5th year: 310 days
6th year: 110 days
7th year : 303 days
Now the employee is eligible for five years since he has not completed 240 days which is the eigible criteria for two years. But normally 99.99% of the companies are not following this.
But application of the Act is extended to those who have completed 4 yrs and 240 days in the fifth year. For calculation purpose the gratuity is calculated in multiplicity of 6 months. That is if an employee completes 6.7 yrs the gratuity is to be calculated for 7 years.
Hope I am clear.
Michael Nicholas
15th March 2008 From India, Madras
As pointed out by me in my earlier posting, the date on which one completes 5 years of service with reference to his joining is the date on which he becomes eligible for gratuity. One who joined on 1-1-2003 becomes eligible to get gratuity on 1-1-2008. If he leaves during 2007 but working for 240 days in 2007, cannot get gratuity as per the Payment of Gratuity Act. In P.Raghavalu and Sons Vs. Additional Labour Court, Andhra Pradesh, it was decided that one who had worked for 4 years, 11 months and 10 days (just 20 days short) was not eligible for gratuity saying that the qualifying phrase "fraction of period exceeding six month shall be taken as one year" will be considered for deciding the amount of gratuity and not for deterning the eligibility for gratuity.

I heard that there is some other judgement against this ruling permitting those with 4 years + 6 months to get gratuity. But the intrepretation of the Act is to take 5 years from the date of joining to date of leaving.

The fraction of six months and 240 days are considered for determining the amount of gratuity. As such one who has worked for 6 years and 7 months will get gratuity for 7 years.


17th March 2008 From India, Kannur
Hi... i got a query related to the same subject. If the gratuity is inculded in the employee's CTC and the employee leaves the organisation before the completion of 5 years. will he be elgible for the gratuity...
17th March 2008
No. Not at all. Showing the gratuity payable on discharge or leaving or on superannuation in the monthly salary itself is a wrong practice followed by the new generation companies. Gratuity will not accrue right from the beginning. It is not payable during the service period, but it is payable only when an employee leaves after completing 5 years or dies while in service. The gratuity and reimbursements are shown as salary (CTC) just to lure employees. It is cheating. It is not paid every month. But it is payable only after 5 years and that also only when he leaves. Therefore, even if the gratuity shown as part of CTC, it will not be paid until he completes 5 years and leaves.
18th March 2008 From India, Kannur
i also have a same issue ........ i m working for an organisation in India since 21st june 2004 and have to join the Head Office of the same organisation abroad on 15th March 2009. Though it is the same organisation and i m completing the 4yrs and 240 days of employment shall i be eligible for the gratuity from office in INDIA?
Please reply soon.
16th December 2008 From Netherlands, Amstelveen
Hi Friend of mine has drawn Indian salary for 4 years 8 months and 3 years singapore salary through samecomany.Is he eligible for Gratuity?
19th January 2009 From India, Madras
Hi Friend of mine has drawn Indian salary for 4 years 8 months and 3 years singapore salary through same company.Is he eligible for Gratuity?
19th January 2009 From India, Madras
Dear All,

I too have 2 queries related to Gratuity calculation

1. One of my friend has worked in XXX organization for about 4 years and joined in some other organization for 5 months and again joined back the same company after 5 months. Is he eligible for Gratuity as he has worked before in the same company?

2. How Gratuity is calculated as per montly calculations? I have a great confusion that it is 4.83% or 4.81% or any other calculation.

Pls some of you clarify this.

Apart from this I have 1 more query about Union formation though this is some other topic, i want your suggestions pls. one of our factories is in this problem. Now all the factory workers are formed as a union and they have given a demand notice to the management in written and gave 1 week time, otherwise they said they do strike. now the 1 week time is almost over. can anyone tell me actually what process anyone has to follow in this situation what i mean is that workers has to file this even in acl office or they can approach directly and do strike or what is the actual procedure?

Pls guys some one help me i am in total confusion. Awaiting for your valuable responses.

Thanks & Regards,
21st January 2009 From India, Hyderabad
If a person at the time of leaving organisation has just completed 5 yrs. and 6mnths will he be eligible for 6 yrs. or 5 yrs. gratuity ? As for example Arun joined in XYZ company in 1st April 2004 , his last day in the organisation is 30th September 2009. But he has worked more than 120 days from march 2009 to sep 2009.
18th November 2009 From India, Chennai
Hi All, I have a question. I want to know that if a person dies and at the time of death he has completed 4 years and 240 days then will he be eligible for Gratuity? Sonali N Kapoor
23rd December 2009
Dear Vijaya,
1. Ur friend will not be eligible for gratuity as there was a break in his period of service.
2. Gratuity is not calculated on monthly basis ut we calculate at at the time of superannuation of any employee after the completion of 5 yrs. The formula is:-
Basic+DA (Generally an Average of last 10 months is taken)*15*no. of yrs. worked/26
Sonali N Kapoor
23rd December 2009
Hi Vijaya

1. The workmen who form into a Union, they got to get registered with the ACL Office.
2. When any demand is submitted to the Management, they have produce a copy of the Charter of demands to the ACL Office too.
3. The Trade Union had to submit minimum 14 days of strike Notice to the management, stating that if their demands are not settled with in 14 days, they would go on strike.
4. The management should at first have a discussion on the charter of demands raised by the trade union, with its Union Leaders, and come out with a amicable solution and draft out a Bilateral agreements and submit a copy to the ACL Office.
5. If the demands are not settled the Union can approach for ACL involvement for settlement. ACL would call on the Union Leaders and the Management representatives for a discussion on the issues raised and their could be a TRIPARTITE AGREEMENT.
6. The Trade Union can not go for any strike before 14 days of notice served with the management, then it is a illegal strike.

It is always better to sought out the issues bilaterally with out intervention of the ACL, to have better understanding and relations with the workmen.

Mohan Rao
Manager HR
23rd December 2009 From India, Visakhapatnam
Warm Greetings to HR fraternity..
Mr.Madhur is abs. right..
Gratuity Act itself explains that it should be granted only after 5 YoS. The clause of 240days is way to overcome some issues in case of fatal accident/death of an employee. Pl avoid to take advantage of a subway.
Thanks & Regards,
"Vishal Saxena"
28th February 2010 From India, Kota
Dear Mr.Madhu,
Thanks for the post ,its a big valid point regarding gratuity inclusion in ctc,it is a cheating which should be avoided.I am doing MBA in HR as well as Masters of labour law,such kind of discussions are really helpful for Freshers ...& i Believe point made by mike 1957,is logically correct...
28th February 2010 From India, Pune
My wife worked in a MNC as Tech. Support Exec. from 02, Feb 2004 till 05 Sept 2008 which makes it 4 years 7 months n 3 days. She worked for 5 days a week (2 days off per week). She did not take any leave without pay. All her leaves were either sick or planned leave. Is she eligible for Gratuity? As per my calculation:
total days from 02/02/2004 - 05/09/2008 = 1645 days.
Total no of off days (2 off days per week) between the working period is 468
so 1645 - 468 = 1177 days worked.
Is she eligible for Gratuity?
If so then how do we go about it. Please help.
30th June 2010 From India, Bangalore
Hi I worked with an mnc in mumbai and following are my detail.
Please let me know if I am eligible for Graduity. I suppose I am after reading through the graduity act and the blog here.
Start Date End Date No of Days
18-Jul-05 17-Jul-06 364
18-Jul-06 17-Jul-07 364
18-Jul-07 17-Jul-08 365
18-Jul-08 17-Jul-09 364
18-Jul-09 03-Jun-10 320
8th July 2010 From India, Mumbai
Dear Friends Whether a employee is worked for 4 yrs 220 day, whether the employee is eligible for grauity. Are any special case is applicable for such case. regards RAMESH.A HR-EXECUTIVE
8th July 2010 From India, Madras
does this prevail in case if the employee is on third party contract ?? kindly elaborate regards
9th July 2010 From India, Ahmadabad
My friend is working in a small scale industry for the past 10 years. They are giving wages to him on daily wages basis & the wages was settled on weekly basis. Now he want to leave from the company. Whether he is eligible for gratuity? (i.e. daily wages employees are eligible for gratuity).
17th August 2010 From India, Bangalore
Dear Member,
If the Payment of Gratuity Act, 1972 is applicable to the establishment then this daily wager employee is also eligible for receiving gratuity payment from the employer.

17th August 2010 From India, Delhi
Dear Madhu Sir,
I'm really not clear about the eligibilty of Gratutity from your reply.
In your earlier postings you had mentioned about a Madras high court case , wherein an employee rendering continuous service for a period of 240 days in a year will be deemed to have continued in service for one year . Quoting from the judgement - "
Thus an employee who has put in service for 10 months and 18 days for the fifth year subsequent to first 4 years should be deemed to have completed continuous service of fiveyears - His claim for gratuity is tenable.

Does it not stand valid now ?

Please explain .
Thanks & Regards,

11th November 2010 From India, Bangalore
Dear Member, He will not be eligible to receive gratuity from the employer under the Payment of Gratuity Act, 1972. R.N.Khola Skylark Associates, Gurgaon (Haryana) (Labour Law Consultants) (M)
11th November 2010 From India, Delhi
Hi All
I have one doubt please clarify xyz employee completed 4year and 160 days that employee eligibile gratuity or not.
please.............. i request reply me anybody.....
25th October 2013 From India, Bangalore
I AM Completed 12 years service in public ltd company. I apply for the gratuity through form I . But they refused I am accountant for that concern.they are not given any money for gratuity . we follow so many letter and email no response. and I legaly petition to deputy commissioner of labour , but my bad time that post is empty for the past three years. only number alloted case not moved . In this situation some person told only 3 years are eligible for gratuity claim .morethan 3 years it is not valued.
Please suggest your immediate reply. and also how to follow these problem.
10th July 2015 From India, Chennai
My friend working in a leather industry in 17 years. Please suggest how calculate for this
11th May 2018 From India, Gurgaon
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