Am I Eligible for Gratuity After 4 Years and 10 Months in a BPO? Seeking Advice

Hi,

I need your advice on Gratuity. In my previous company, I have completed 4 years and 10 months (including a 6-month probation period). I wanted to know whether I can claim gratuity. My previous company says that, as per company policy, I am not eligible for Gratuity. Please advise on what to do? What is the procedure or steps to be taken in case I am eligible for gratuity? My previous company is a well-known BPO company.

Please let me know if you need any further information.

Though as per the Payment of Gratuity Act, completion of 5 years of service is mandatory, following some verdicts, in some states, gratuity is allowed for an employee who has completed 4 years and 240 days in the fifth year. Please contact the District Labour Officer for details of its applicability.

Regards,
Madhu T.K

Dear Madhu,

In our company, the number of years of service towards gratuity consideration comes into effect only when the employee completes the probation period. During the training period, regardless of its duration, the company does not consider it as part of the service.

The company has rejected some employees' requests for gratuity as they have completed 5.5 years of service, but 2 years were spent in the training period. The company asserts that the training period will not be counted towards gratuity, making them ineligible for gratuity payment. Is this the correct procedure?

The Gratuity Act implies 4 years and 240 working days for gratuity consideration. The actual period of service counts towards gratuity eligibility.

Regards,
Rsudhaakar

Dear Mr. Sudhakar,

I want to make this point clear: when only an employee is given either training or probation, their training and probation periods will not be considered for gratuity at all, as these periods are treated as work learning periods. According to the Gratuity Act, an employee is someone who has successfully completed both their training and probation periods.

If the training and probation periods are not regulated for the next probation or confirmation period respectively before the last date of such training or probation, the employer is not entitled to extend those periods. The employee will be deemed fit for the next period of their service. Hence, all successful employers should be more cautious on this subject.

Regards,
V. Ganesan

For calculation of gratuity, the first day of an employee's appointment as a Trainee or Probationer shall be considered. The training period as per the Apprentice Act, 1961, as well as under the certified Standing Orders of the company, shall be taken as the learning period. An employer can extend training or probation to deter the rights of the employee under Labor Laws. Therefore, if found unfit, the employee should not be allowed to work. This should not take more than a year. If an employee was under training for two years and later placed on probation, with the probation then extended for another two years, and so on, this practice should be described as unfair. Hence, with the exception of Apprentice Training (under the Apprentice Act and as per the certified Standing Orders of the company), all training periods should be treated as service periods only.

It is essential to note that all trainees, except those mentioned above, are covered by EPF and ESI, implying that they are employees.

Regards,

Madhu.T.K

Dear Sir,

Thank you for your timely update. Meanwhile, would it be possible to have either your mobile number or email address? This way, if it is needed urgently, we can get in touch with you.

Regards,
R Sudhakar

Employee has to complete continuous service of 5 years, but after the ruling of Madras High Court, if there are 240 working days in the 5th year, even then an employee is eligible for the gratuity.

Example: Where an employee has completed 4 years & 240 days of continuous service in the 5th year, he is eligible for the Gratuity.