Am I Eligible for Gratuity If I Resign Just Before Completing 5 Years?

Hi,

I have completed 4 years and 11 months in my company. Now, I want to resign. As per our company's rules, we have to give 1 month notice. I want to know if I resign today, will I get gratuity? Or do I have to complete 5 years before I am eligible for gratuity? Please let me know the rules regarding gratuity so that I can resign accordingly.

Dear,

You are eligible to receive gratuity even if you have worked for 4 years and 11 months. The Madras High Court, in the case of Mettur Beard Sell Ltd Versus RLC, has decided on the same type of issue. It was held that any employee who completes 240 days of service in a year in the 5th year will be deemed to have continued in service for one year as stipulated by sec. 2(a) of the Payment of Gratuity Act. It was further held that an employee who has served for 10 months and 18 days in the 5 years subsequent to the first 4 years should be deemed to have completed continuous service of 5 years and is entitled to gratuity.

The case was reported as 1998 LLR 1072 (Mad H.C.).

In case you require a copy of the judgment, I could arrange the same and upload it to this thread.

Regards

Dear Friends,

In the fifth year, not only 240 days. An individual has to complete five years of service to be entitled to get gratuity. (By Senior Member J. S. Malik). However, Adv Puneet says otherwise.

So, who is right?

Hitesh Dewan
hitesh_dewan@yahoo.com

Dear,

Our senior member, Mr. Malik, has also stated that if anybody has the patience to fight the case before the authority considering this judgment, then he may proceed with the case.

Regards,
R.N. Khola
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)
09810405361

Dear Gauria,

Yes, you can resign now. Notice period is also included in your service period, which signifies the completion of 5 years in your job. It is better to avoid any confusion on the organization's side; you should complete 5 years and then resign.

In most cases, we have found that organizations put pressure on employees to resign or terminate them before the completion of 5 years of service to avoid providing gratuity benefits. However, we have received complaints from employees regarding this issue and have won all cases in this regard.

For more details on HR/legal/Social compliance, visit [Global Overseas - Home](http://www.globaloverseas.in).

Sajid Ansari - Delhi

Hi,

You are absolutely eligible for Gratuity. As I discussed with my senior HRs, it is clear that above six months of service is considered as a year, i.e., if an employee has served for more than 4 years and 6 months, they are eligible for gratuity benefits.

Vissu

Dear Vissu,

In my opinion, as per Section 4(2) of the Payment of Gratuity Act, 1972, the formula of considering one year of service on completion of more than six months of service is only applicable after the completion of five years of continuous service.

Regards,
R.N. Khola
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)
09810405361

If you want to receive your gratuity, you have to complete 5 years of service. After completing 5 years of service, if you continue for more than 6 months, you will be considered as having completed 6 years. It is better to complete 5 years and then resign.

If you resign after 4 years and 11 months and will complete 5 years during the notice period, you are eligible to receive Gratuity. As noted before, as per a court judgment, upon completing 4 years and 6+ months, you are also eligible for gratuity. In this case, if the management denies it, you may have to fight for your entitlement.

Regards,
N R M

It will help me in the future for reference. I have decided to be a bit patient and will wait for 1 month. I am resigning the day I will complete my 5 years.

Dear Mahander,

This is to inform you about the last Basic plus DA drawn by the employee. There is no limit defined under the Act.

Regards,

R.N. Khola
(Labour Law & Legal Consultants)
09810405361

Gratuity

Dear,

I have been working in a manufacturing company for the last 6 years and am still currently employed. However, I have a question regarding my situation. My company has many subsidiary companies all over India. I was transferred from one subsidiary to another for one year, and then subsequently transferred to another subsidiary.

I would like to inquire whether gratuity is applicable in this case as per the gratuity rules act. Can anyone please assist me with this matter?

Regards,
mano