Dear All.
While working with one of private company, it was practice that, even in case of eligible permanent workers who has rendered service more than 5 years, they considered those years in which the worker has physically present for 240 days. The management's interpretation was that, the gratuity is payable according to Section 2 A (2) (a) (ii) of the Payment of Gratuity Act, extract of the clause is shortly stated below.
[2A. Continuous service.—For the purposes of this Act,—
(1) an employee shall be said to be in continuous service ............................
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer—
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days,....................................
(ii) two hundred and forty days, in any other case;
After reference of provisions of the Act & some case laws as well as discussions had with seniors, my assumptions is, the above clause may applicable to Badali/Temporary workers who are working in absence of permanent worker for time being.
My query is, Is it legal and proper to apply above clause of 240 days actually worked in each year for eligibility of gratuity payment to permanent employees ? Is there any case law in which Hon'ble Court may have explain in details or made interpretation on the above clause is not applicable for the gratuity payment of permanent worker ?
Shaikh. I.Y.
Manager HR.