Is Gratuity Applicable for Employees in Charitable Associations Under Specific Acts?

Is gratuity applicable in the case of employees in a charitable association registered under the Travancore Cochin Literary, Scientific, and Charitable Societies Registration Act, 1955?

I'm working in one such organization in a different post but would like to help.

Anuradha

Hi Suresh,

How can we calculate the amount of gratuity? Secondly, as per my knowledge, it's applicable to those who have working experience of 5 years in the same organization. But does the calculation differ if the experience is more than 7 years and above?

Please guide.

Thanks for the speedy reply, Suresh. Can you elaborate on what a non-profit organization is? Our art school is for foreign students, and we do have fees for studies.

Anu

Dear,

Thank you for your response regarding Suresh/Meenakshi. I would like to clarify a bit on this query, as nowhere in the Gratuity Act is it written that gratuity is not applicable for nonprofit or charitable organizations. Therefore, the Gratuity Act is applicable here, and it will be calculated based on the number of years of service.

Thank you,
J. S. Malik

Hi Anu,

The Payment of Gratuity Act applies only to factories, mines, plantations, ports, railways, and to every shop and establishment in which 10 or more persons are employed in government/private companies. Is your Cochi office registered under the Kerala Shop and Establishment Act? If so, then gratuity is applicable. Generally, NGOs and NPOs run with a skeleton staff for social causes and don't book profits. Therefore, I don't think gratuity or bonus is applicable even if you complete five years. To be eligible, it has to fall under any of the above listings that involve high manpower, production, cash flow, and profit and loss account. If they are so conscious, they can equate a proportionate amount in lieu of gratuity.

Regards,
Chandru
Manager-HR

Hi Meenakshi,

I hope your doubts about non-profit organizations have been clarified. Regarding the calculation, you may follow the formula below:

Last Drawn Wages X 15 X No. of years of Service = Gratuity
26

If a person's experience is more than 4 years and 240 days, they are eligible for gratuity. While books may state 5 years of continuous service, legal judgments have concluded that less than 5 years is also eligible (4 years and 240 days).

Thank you.

Mr. Suresh,

Your reply regarding Gratuity is perfect, and the formula is correct.

Regards,
Chandru

Dear Mr. Suresh,

Can you please provide me with a reference to any judgment stating that a person who has served 4 years and 240 days of continuous service will be eligible for payment of gratuity?

I would also like to know whether 240 days of continuous service includes holidays, days off, and leaves.

Please reply as I am eagerly waiting for your response.

Thanks,
Ritesh Ambade
M- 9823319007