Gratuity [Thread 266952]

Dear All,
The possible explanation for *15 & /26 can be given thus. The Payment of Gratuity Act, 1972 provides for payment of
gratuity @ half month's salary for every year for services rendered. Minimum services for being eligible for payment of gratuity is 4 years, six months and two days. Six months and two days rounded off to one full year, completing 5 years.
Recently a high court most probably Tamil Nadu High Court had given a verdict to this effect. There iare no separate formulae for calculation of gratuity for retirement/resignation and death. Some employers offer higher gratuity in death cases. An employer may offer gratuity higher than Rs.10 lakh (from 24/05/2010) but the amount over and above Rs.10 lakh would be taxable.
Imprtant note: An employee dismissed from service on account of misconduct, loses right to get gratuity from his employer.
Shyam Agrawal

The Madras High Court verdict in Mettur Beardsell Ltd, Madras Vs Regional Labour Commissioner, (not a recent one but a verdict which came in 1996) tells that an employee who has worked at least for 240 days (not Six Months and Two days) in the fifth year is eligible to get gratuity. However, this being a ruling by a High Court the same need not be implemented in other States. Similarly, there is no amendment in the Payment of Gratuity Act consequent to the verdict. However, many decisions have then been taken by the payment of gratuity authorities of different states following the Madras High Court verdict allowing gratuity to employees who have worked for four years and 240 days.
Regards,
Madhu.T.K