Dear Uma Maley,
The basic condition for qualifying gratuity payment under the act is still 5 year of continuous service. However, in order to count 01 year continuous (uninterrupted) service the below is used:-
In the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than-
(i) 190 days, if employed below the ground in a mine, or
(ii) (ii) 240 days, in any other case, except when he is employed in seasonal establishment.
Pls be noted the 240 days (which generally told as 08 month) has been taken on basis of Point (i), which initially reformed to count 01 year service for the mid period (1st to 4th year service). Means if an employee work for 240 or more days in a service year than it will be countable as 01 year. That does not mean 240 days will be equal to 05th year . First the employee need to complete 05th year than only the 240 days grace can be taken. This is my opinion on basis of the language drafted in the Act.
However, there are cases (court verdict) where employees got gratuity for 4 years and 08 months service, but still there is no AMENDMENT in the basic Act which shows the eligible period as 04 year 08 month. Hence in the first instance the company (employer) can deny to pay the gratuity for less than 05 year service. But if the employee put the case to the court and the lawyer give example of previous court verdict than the court may direct the employer to pay the gratuity.
There are so many discussion happened on the topic and still it is all time topic for HR professionals. Hope my points are cleared. Fellow members can put more light or correct me.