Gratuity Eligibility in Maharashtra: Does 4 Years and 8 Months Qualify for Payment?

Dear All,

I just want to inquire about a Gratuity case. An employee who has worked continuously with the company in Maharashtra for 4 years, 8 months, and 10 days, would be eligible for Payment of Gratuity or not.

Your valuable comments please.

Thanks.

Ritesh Ambade
HR Professional
M- 9823319007

Ritesh,

The said employee has completed 4 years and 254 days. So, he is eligible for gratuity in full as applicable to one who has completed 5 years. This concession is only for those who have completed 4 years and are entering the 5th.

Employers in Maharashtra often have certain rules that are unheard of in the rest of India. Their calculations for CL/SL/EL/Gratuity/Leave encashment can be quite confusing.

Regards, Chandru

Dear Mr. Chandrasekar,

Thank you for your immediate reply.

Further to this case, the employee has provided a reference to a Madras High Court judgment to the employer. The employer responded by stating, "The Judgment of Hon'ble High Court, Madras in the referred case was in a different context, which is not applicable in this case. Section 4 of the Payment of Gratuity Act unambiguously provides that gratuity is payable only after completion of five years of continuous service."

I would like to learn more about this situation because the current employer of the employee is refusing to pay gratuity. Are there any other judgments given by the Supreme/High Court related to this matter? Please suggest how the employee can receive his gratuity payment from the employer.

Your valuable suggestions/opinions will be highly appreciated.

Thanks,
Ritesh Ambade
M- 9823319007

Dear Madras High Court has given judgment in Metturbeardsell Ltd. vs. Regional Labour Commissioner, Madras, stating that an employee who has worked more than 240 days in the fifth year will be eligible for gratuity.

Dear, it is a question of interpretation. What is continuous service? If an employee has worked more than 240 days in a year, it means he has completed one year of continuous service. However, you are correct; generally, employers do not pay before the completion of five years.

Thank you.

J. S. Malik

Dear Ritesh,

For gratuity purposes, any completion of months above six months is rounded to the next. So completion of 4.5 years is taken as 5 years, and the benefit is paid for 5 years. If it is 5.5 years, you can round it to 6 years.

For those fulfilling 5.5 years, they can pay the actual 5.5 or 6. Once again, it all depends on the employer's perspective, and we cannot force them. It's good as long as the amount is paid to the employee.

Regards,
Chandru