Gratuity Payable Or No?

Dear Prrsarma,
I have not gone in detail the AP Shops and Commercial Establishments Act, and that is why I have this doubt. You have said that any employee leaving the service after 1 year will be getting service compensation. Is it so or is it that any person whose service is RETRENCHED is entitled to get this compensation worked out at the rate of 15 days pay for every completed year of service? The latter is similar to the retrenchment compensation as per Industrial Disputes Act, but the former is a clause which makes the employer to pay this amount even if the employee resigns and leave.
Madhu.T.K

In a very recent judgement, the Kerala High Court has ruled that in order to be eligible for gratuity, 4 years and 240 days in the fifth year is sufficient. The judgement in Sreeja Vs Regional Joint Labour Commissioner (2015 LLR 826) has considered the precedence in Madras High Court ruling in Mettur Beardsell Ltd Vs Regional labour Commissioner (1998 LLR 1072) in which the court had held that continuous service means 240 days in a period of 12 months and for entitlement of gratuity five years minimum service is not required and an employee who has rendered 240 days in the fifth year is deemed to have completed the fifth year and qualifies for gratuity. Since this was a High Court judgement many states (including Kerala) had not considered it as binding to their respective states.

In the case of establishments working for less than six days in a week, obviously, the qualifying days for continuous service is 190 days. This is inclusive of all paid days, like holidays, weekly off days, paid leave days and lay off days, if any.

Madhu.T.K

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NILESH GOSWAMI
Mehsana (Gujarat)

If the High Court ruling is that it is enough for an employee to work 4 years and 240 days, then the Gratuity Act has to be amended accordingly. Unfortunately, the ruling of the High Court is, in my opinion, not in accordance with the Law of the land. It is the result of a total misinterpretation on the part of the High Court.. I guess I might be hauled up in the court for that !!

Hi all,
I have completed 190 days in my 5th year, as per the gratuity act, and my company is a 5 day working company. Gratuity act states that if its a 5 day working company then if you have completed 190 calendar days you become eligible for gratuity
Warm Regards,
Varsha