Gratuity Eligibility Confusion: Is 4 Years and 9 Months Enough for Payout?

To: Mr. Madhu T.K. Sir,

I am facing an issue regarding gratuity in my company. One employee left upon completing his service period of 4 years and 9 months. According to a Kerol High Court ruling (I currently do not have the document), anyone is eligible for gratuity after completing 4 years and 8 months of service. Is this correct? Please assist me with this matter.

Regards,
Swarnali Banerjee

Hi, this question is a little atypical. As per the Gratuity Act, 5 years of service are required to receive the benefit of gratuity. However, you are correct that some judgments have been made in this regard. If someone has completed 240 days in the fifth year, they become eligible for gratuity, but no amendment has been made in the act. In my view, he is not eligible for gratuity.

Thanks and regards,
J. S. Malik

No, he is not eligible for gratuity. Employees are eligible for gratuity only on completion of 5 years as per the law. Any period after 5 years is rounded off and considered for the purpose of calculation. If the employee leaves the organization after putting in 6 years and 7 months of service, then for the purpose of gratuity calculation, it will be considered as 7 years. If he leaves the organization before completing 5 years of service, he is not eligible for gratuity. For example, if he leaves after serving 4 years and 11 months, he will still not be eligible as per the law. This exception applies only in the case of death.

Dear,

As far as gratuity is concerned, a minimum of 5 years of continuous service is required for eligibility. Upon completion of five years, the employee becomes eligible. The criteria state that the employee must have worked at least 240 days in each of the five years to claim gratuity eligibility. I hope this clarifies any doubts regarding the requirement of 240 days of work in the fifth year.

Regards,
Prabhakar Rao.M