Is My Friend Eligible for Gratuity After 4 Years and 9 Months of Service? Seeking Expert Advice

A friend of mine has served 4 years and 9 months with his company. I want to ask experts if my friend would be eligible for Gratuity. A few weeks ago, I read in an article that one should be eligible for Gratuity if one has completed more than 4.5 years with the company.

If your friend worked for 4 years and 240 days, then he/she can claim gratuity.

Dear Manasvi,

I differ with the view my friend has given. To become eligible for gratuity, a minimum of five years of service is required, which is clearly mentioned in the Gratuity Act. Where did this concept of eight months come from?

In one case, the Madras High Court has ruled that if someone has completed 240 days in the fifth year, then they become eligible for gratuity. However, this does not mean it has become a rule, as there has been no amendment in the act based on this decision; the act will prevail.

Thank you.

J. S. Malik

Please refer to Sec. 2A (2aii) of The Payment of Gratuity Act, 1972. It has been clearly mentioned that 240 days actually worked can be considered as one year.

I have referred to the section, and it is applicable for continuous service, not for the applicability of the Act. Please refer to the applicability, and gratuity is applicable if someone has served for five years in the establishment.

I have also gone through the Gratuity Act where it is mentioned that 5 years of continuous service are required for it to become applicable. However, for subsequent years, it is rounded off as mentioned.

I am facing a different problem. I was employed with an autonomous body under the Ministry of Industries, Government of India. I believe that the same rules apply for it. However, my organization did not pay me gratuity even after completing 9 years and 7 months of service, claiming that in government service, gratuity is not applicable when a person resigns.

I have lodged a complaint with the Assistant Labour Commissioner (Central) in Gujarat where I was posted. However, even after 13/14 months, I have not received any communication from either of them.

Kindly advise as to what should be my next course of action and how many years of gratuity are applicable to me.

Thanks

Gratuity is paid even after putting your paper down. You are eligible for 9 years of gratuity, which shall be paid based on your last drawn basic salary.

I have been a reader for many months on the HR site.

One important question to the seniors - In my current company, two employees have completed 5 years of continuous service. Currently, my company's strength is 7 employees. Over the last 5 years, the employee count has mostly been below 10, but at one point, it reached 15. Given this scenario, will the two employees be eligible for gratuity upon leaving the company?

Please refer to the Gratuity Act Section 1(3A) in which it is mentioned:

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.

There is no need for an argument when the law clearly states that a minimum of five years of service is mandatory to become eligible for the payment of gratuity. If your employer waives off that shortfall in the tenure of your services, it is his prerogative, but there are no legal bindings. However, generally, this does not happen in real life.

Mr. Mallik is very much correct. After completing 5 years of continuous service, one becomes eligible for gratuity. An organization needs to fulfill this provision after 3 years from the start of the organization, which is also a legal requirement.

Hi,

The eligibility criteria is a minimum of 5 years of service, as clearly mentioned in the Gratuity Act. However, if an employee dies while in service, this clause will not be applicable.

I have a question regarding the Gratuity Act. Company A was established 4 years ago with a workforce of 300. Under 'A', company 'B' is a manpower contractor established 3 years ago with a total of 150 employees, i.e., covered under the Gratuity Act.

Within company B, Ram, an employee who has been working for the past 3 years, recently passed away due to an accident.

My question is: Are Ram's family eligible for gratuity under Section 4(c), and who is responsible for bearing that amount - the contractor or the principal employer?

Is insurance mandatory for every company, including contractors, for the payment of gratuity under Section 4-A?

I do agree with Mr. Malik that in the case of gratuity, one must serve at least 5 years continuously in the organization.

I have a query on the Gratuity Act. Is gratuity payable to an employee's dependent who has committed suicide? Please mention the ruling with citation also.

MKTyagi

SVS is right. If you complete 4 years and 240 days, you are eligible to claim.

Madras H.C - (1998, LLR 1072) has cleared this matter once and for all.

Sunder Rajen