Is an Employee with 3 Years of Service Eligible for Gratuity if Retrenched?

If an employee has 3 years of continuous service in the organization and is retrenched, is he eligible for gratuity or not?

Hi Mr. Pavani,

Mr. Khola is very much right. An employee has to complete 5 years of uninterrupted service in a single organization to be eligible for gratuity. If he is retrenched before completing the 5-year tenure, he is not eligible for any gratuity.

Mohan Rao
Manager HR

Hi,

As per my understanding, the PF number should remain the same for a continuous 5 years, regardless of whether a person changes organizations or not.

Sanjay
HR Executive

Hi Sanjay,

Please give your valuable opinion on whether an employee is eligible to receive gratuity when they are retrenched after completing 3 years. Please do not divert the discussion to PF rules.

Mohan Rao
Manager HR

Dear sir,

Sir, main ek company mein 7 saal se kaam kar raha hoon, is samay meri salary 3900 se hai. Ab main kisi karan job chod raha hoon, aur mujhe us company se full and final lena hai. To ab mujhe kitna hisaab milna chahiye.

Please mujhe bataye.

Please reply to me, sir.

Waiting for you.

Mr. Kumarjay,

After completion of 5 years of uninterrupted service in a single organization, yes, the employee is eligible to claim gratuity from his employer as per the Gratuity Act.

Mohan Rao
Manager HR

Dear Mr. Rao,

I mean that when a person turns 5 years in an organization, he is eligible for gratuity. Please tell me how we can calculate gratuity.

Hi, Mr. Sanjay,

The employee who completes 5 years of interrupted service is eligible for gratuity, as I have mentioned on many occasions. The calculation of gratuity is as follows:

Last paid wages/salary divided by 26 days to arrive at per day wage/salary. Per day wage multiplied by 15 days for 1 year of service the employee had rendered in the organization to arrive at per year of gratuity. Per year of gratuity multiplied by the number of years of service he had given to the organization.

The employee's service must be 5 years or more without any break in service. The break in service within 5 years should not be counted towards the 5 years of service.

Mohan Rao Manager HR

Uninterrupted service again means a particular number of days in a year, right? Is it like 160 days minimum a year for 5 years to be eligible for gratuity, or is it any other figure? Please confirm.

Hi all,

I saw a High Court decision in a magazine stating that 4 years and 240 days should be completed for gratuity. Is this okay?

Hi,

As per the provisions of PGA, he is not eligible for the same. I am enclosing herewith a soft copy of the PGA for your kind perusal.

Regards,

Balamurugan Sivaprakasam
Head- HR
ICIL-MM Nagar