Is Gratuity Required for a 30-Year Employee in a Small Organization? Seeking Legal Guidance

One of our staff members is resigning from the service after completing 30 years of service. Our organization does not come under the Provident Fund, Gratuity, and ESI Act as we have less than 10 employees working at any given time.

Is the resigning staff entitled to gratuity under these circumstances? Is there any law which states that gratuity has to be paid to an employee who has served for 30 years continuously in an organization? Will you please guide and quote the law if any?

Dear Thomas,

According to the Payment of Gratuity Act 1972, the employee is entitled to gratuity. I am quoting a paragraph of the Act. Please see to it.

[B]. SHORT TITLE, EXTENT, APPLICATION AND COMMENCEMENT. - (1) This Act may be called the Payment of Gratuity Act, 1972. (2) It extends to the whole of India: Provided that insofar as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir. (3) It shall apply to - (a) every factory, mine, oilfield, plantation, port, and railway company; (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months; (c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf. (3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten. (4) It shall come into force on such date as the Central Government may, by notification, appoint.

Hope you know how much gratuity is to be paid.

Enjoy helping people.