Supreme Court Gratuity Ruling: Can Anyone Share the Details on Eligibility?

Recently, I came to know that:

As per the latest judgment of the honorable Supreme Court, an employee is eligible for gratuity if they have completed 4 years of continuous service and 240 days of continuous working in the 5th year.

But I am not able to find the ruling. If anybody has it, please share.

In the absence of Master-servant relationship contract labours are not entitled to salary on par with regular employees.(Unreported Judgment dated: August 21, 2007 – Canteen Mazdoor Sabha V/s. Metallurgical Engg. Consultants (I) Ltd. & Ors. - Supreme Court).

I have come to know that besides the Madras High Court judgment, there is one Supreme Court judgment on this issue. Can somebody share it with the citehr members?

Dear All,

I was able to get the Madras High Court ruling, attaching it herewith.

Dear All,

I need some information on eligibility for gratuity. I would be very thankful if anyone could help me with any court rulings on that matter. The situation is as follows:

A retired government doctor worked for a private hospital for nearly six years after retiring from service, receiving all benefits, including gratuity and provident fund.

My question is: Is he eligible for gratuity, and is the hospital liable to pay him any money towards gratuity? Can a doctor be considered an employee?

- Joseph Alex

Dear Joseph,

A doctor is also an employee like other employees. The hospital is liable to pay the Gratuity. There is no age bar in the Payment of Gratuity Act, 1972. After the amendment in the act in the year 2008, teachers are also covered.

Thank you.

Dear Rajeev,

Thank you for sharing the Madras High Court Judgment on Gratuity. I am sharing the Supreme Court Judgment on the same issue.

Kind regards, [Your Name]

Dear Rajeev,

I have posted my views earlier, but I still do not agree that if someone has completed 240 days in the fifth year, then they are eligible for gratuity. Dear, if the Madras High Court has given a decision in one particular case, there should be an amendment in the Gratuity Act, and the applicability clause should be changed. If it mentions five years, then it should be five years only.

If we insure our gratuity with LIC, they also pay after completion of five years only.

Thank you.

J S Malik

Dear Malik,

You are absolutely right. Only an amendment in the Act can change the eligibility for Gratuity. I know that even after that ruling, everybody is paying the Gratuity as per the Gratuity Act. This does not mean that after that ruling, the company will start paying the Gratuity as per the ruling, but at least we should be aware of this.

Dear Rajeev,

If we read the act carefully and interpret the definition of continuous service, then yes, 240 days make the completion of one year's service concept. If someone completed 240 days in the fifth year, gratuity should be given to him. However, no one gives it and takes benefit of the applicability clause.

Regards,
J. S. Malik

What was the last Supreme Court judgment on eligibility for payment of Gratuity? Are contract employees above 7 years of service entitled to Gratuity?

Thank you in advance.

I worked at ICFAI in Panjagutta from December 2004 to January 2010. Upon joining, they provided me with a contract for one year. Later, they retained me in various roles. During this time, the company name changed to ICFAI Foundation, and after another year, it became ICFAI Academy. They are stating that I am not eligible for gratuity as I have not completed five years.

Please advise me on what steps to take next.

Sir,

As per your post, it means the Madras High Judgement is correct. If a person has worked for 240 days in the 5th year, they will be eligible for Gratuity. I believe judgments passed by the Honorable Supreme Court of India become law by virtue of Article 141 of the Constitution of India and have binding effects on all subordinate courts, including High Courts.

Therefore, it becomes a rule but needs to be notified.

Sir,

As per your post, it means Madras High Judgment is correct. If a person has worked for 240 days in the 5th year, they will be eligible for Gratuity. I believe judgments passed by the Honorable Supreme Court of India become law by virtue of Article 141 of the Constitution of India, with binding effects on all subordinate courts, including High Courts.

Therefore, it becomes a rule but needs to be notified.

My date of joining a company is 27.06.2008, and the date of release is 28.02.2013. Am I eligible for gratuity?

Could anyone please tell me: if the school did not pay us gratuity, within how much time can we claim it or go to court?

Regards,
Rajeev

Payment of Gratuity for Less Than 5 Years

The judgment given by the Honorable Madras Court regarding the payment of gratuity for less than 5 years, specifically for 4 years and 10 months, should be made general through gazettification. Until that time, I feel it would not be applicable generally.

If your employer fails to make the payment of gratuity under the Payment of Gratuity Act within one month from the date of separation, you may file an application before the Controlling Authority under the Payment of Gratuity Act. The Authority shall initiate proceedings by summoning the employer and pass orders in your favor, subject to your eligibility.

Regards

A company has asked its regular employee to leave. The company has paid a 3-month notice period as per its policy. The employee had completed 4 years and 11 months of continuous service in that company. Will he be eligible for Gratuity? Please share your views, and if there is any ruling on this, also please share. In my view, he should be paid Gratuity.

Can anybody help me in the case of gratuity? If I have worked for 28 years in a government job, but due to the lower court decision, my service got terminated. However, I appealed the same in the High Court where it is under proceedings against the lower court decisions. Can I get my gratuity for my 28 years of service?

I have a question. If anybody retires on the due date but has not completed 5 years of service due to late joining, will he be eligible for gratuity or not? I do remember there was one judgment on this issue, and the Supreme Court awarded a favorable decision. Members are requested to focus and please share a copy/reference of such a decision.

There is no reason to wait for an amendment in the Act to change the eligibility for the Gratuity, as per my view. This may invite litigation in the future.

I am a retired Bank Officer and retired on October 31, 2016. My queries are as follows:

Gratuity Payment as per Officers' Service Rules

As per our Officers' Service rules, the payment of Gratuity is as outlined below:

- The Bank's scheme of Gratuity entails one month's PAY for every completed year of service, subject to a maximum of 15 months' pay. This shall be the Gratuity payable as per the Bank's Scheme of Gratuity. In cases where an Officer has completed more than 30 years of service, they shall be eligible for an additional amount at the rate of 1/2 month's pay for each completed year of service beyond 30 years.

PAY for the purpose of Gratuity as per OSR'79 shall include:
A. Basic Pay
B. Permanent Special Allowance, if any
C. Personal Allowance, if any
Dearness Allowance shall not, however, be included.

Statutory Gratuity

(Gratuity payable as per "The Payment of Gratuity Act, 1972")

For every completed year of service or part thereof in excess of six months, the employer shall pay Gratuity to the employee at the rate of 15 days' wages. This is based on the principle that a worker earns a month's wage for attending work on 26 working days. As per the Act; Wages X 15/26 X number of years of service. The ceiling on the maximum amount of Gratuity is fixed at Rs. 10.00 lakhs. Wages as per the Act means and includes the following:
A. Basic Pay
B. Dearness Allowance
C. Special Allowance, if any
D. PQP/FPP, etc.
E. Personal Allowance, if any
CCA & Adjusting Allowance shall not, however, be included.

The Bank has not followed the Gratuity Act 1972 as they excluded Special Pay from the total salary, which is part of pay since 2012, and DA is paid thereupon. I have learned that the Supreme Court has issued a ruling cleared by the FM and sent to IBA for comments, pending with them. Please advise on the further course of action.