Gratuity Eligibility in India: Does 4.6 Years of Service Qualify for It?

Hi,

If the workman has completed 4.6 years of service, is he entitled to gratuity? What is the basic rule or act governing this? Is this implemented from state to state or all over India?

Thank you.

Dear Jeet,

As per the Gratuity Act/Rules, after completing 5 years of service, an employee will be eligible for gratuity equivalent to 15 days of their last salary for each completed year.

In your case, you are not eligible for gratuity as you have only completed 4.6 years of service, making you unqualified for gratuity.

Regards,
Wasim

Dear Jeet,

Greetings.

Please follow the URL where you will note that after 4 years and 10 months, a person can be eligible for Gratuity. https://www.citehr.com/104526-sc-rul...tuity-act.html

Cheers,

With regards,

Trisha HR Professional

No, Trisha, he is not eligible for gratuity. He has to complete 5 years. After completion of five years only the rounding-off year is applicable.

- If an employee completes five years of continuous service, he is eligible for gratuity.
- If the service of an employee at the time of his resignation is 6 years 7 months, his total years for gratuity are to be considered as 7 years.
- If the service of an employee at the time of his resignation is 6 years 4 months, his total years for gratuity are to be considered as 6 years.
- Calculation: Last drawn salary (Basic + DA) x number of years of service x 15 days (divided by) 26.

OK?

Dear friends,

An employee who has completed 4 years and 6 months of service will not be eligible for gratuity. The rounding off rule for periods over 6 months is only applicable for determining the full number of years of service for which gratuity is to be paid, and not for eligibility as such.

However, it is understood that the Supreme Court in the case of Surendra Kumar Verma v Central Govt. Industrial Tribunal (1980 (4) SCC 433) has held that an employee who had completed 4 years, 10 months, and 18 days would be considered as having completed 5 years of service. If anyone has a copy of the judgment, kindly forward the same.

Regards,

Dear PCA,

I am also looking for the same, but not able to get till date. If you happen to get, then please share the same.

Dear Friend,

I am providing the copy of the same, but it seems to be a different case. Kindly go through it.

Are you able to get the copy of the judgment on the Gratuity? I am still looking for the copy...

Dear Mr. Verma,

Thank you for the copy of the judgment. It falls under the Industrial Disputes Act. The Supreme Court has held that an employee who has completed 4 years and 10 months will be deemed to have completed 5 years for the purposes of the Act. While this is not directly related to gratuity, the same logic could be applied in the case of gratuity as well.

I am also trying to obtain a copy of the relevant judgment under the Payment of Gratuity Act. It is understood that the Madras High Court, in the case of Mettur Beardsell Ltd, Madras v. Regional Labour Commissioner (Central), Madras [LLR 1072 (Mad HC)], has held that an employee who has served for 10 months in the fifth year following the fourth year should be deemed to have completed 5 years and is entitled to receive gratuity. If you have a copy, could you kindly share it?

Regards,

Mr. PCA,

You are absolutely correct; this is the relevant case. I am still looking for the copy. Definitely, I will share the same here.