Can 4 Years and 10 Months of Service Qualify for Gratuity? Let's Discuss Legal Insights

Friends,

All of us are in a confusion. Can a service of 4 years and 10 months constitute 5 years of continuous service? The answer is yes. By virtue of the judgment of the Supreme Court rendered under the provisions of the ID Act in Surendra Kumar V. Central Govt. Industrial Tribunal (1980 (4) 433), it is enough that an employee has a service of 240 days in the preceding 12 months, and it is not necessary that he should have completed one whole year of service. As the definition of continuous service of the ID Act and Payment of Gratuity Act is synonymous, the same principle can be adopted under the act as well. Hence, an employee rendering service for 4 years, 10 months, and 18 days is considered to have completed 5 years of continuous service under Sec 24 (2) and thereby is eligible for gratuity.

Reference book: Guide to Payment of Gratuity Act 1972 - S.D. Puri.

If you have any other references against it or in favor of it, please send me.

Swarnali

Sir,

I would like to know the position of a situation wherein an employee is terminated from service due to the closure of the firm, and at the time of closure, he has completed 2 years. Kindly tell me what benefits he can seek from his management.

With regards,
Ramesh

Hi Swarnali,

Thank you for the post. I have heard about a judgment regarding this matter in the Madras High Court and Delhi High Court. However, I couldn't locate the text. If you have the full text or the case reference number, please send it.

Regards,
Madhu T.K

Supreme Court Judgment and Legal Amendments

This position is incorrect, and the Supreme Court judgment will not hold because the amendment to the law came out in 1984 after the Supreme Court judgment. The Madras High Court has erred in its judgment.

Thank you.

There was a judgment by the Madras High Court (copy enclosed), but I have not heard of any judgment by the Delhi High Court in this regard.