Dear Kumaran,
I endorse the views of Mr. KCS Kutty. But to make it more clear, I may point out that although Section 4(1) of the Payment of Gratuity Act provides the requirement of minimum of 5 years of continuous service to have been rendered by the employee for the eligibility for payment of gratuity, BUT, the Proviso below the said Rule clearly provides that the completion of continuous service of five years shall not be necessary in the case of death or disablement.
Further, although Section 4 (2) of the Payment of Gratuity Act provides that the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned, BUT, Section 4 (5) clearly provides that "nothing in section 4 shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer."
That means it depends upon the greatness of the employer to pay higher amount of gratuity, but shall not pay less than the minimum amount payable under the Act.
But, please be aware, the Gratuity is payable within a period of 30 days from the date it becomes payable to the eligible person, otherwise simple interest at the prescribed rates would also become payable as per the provisions of Section 7 of the Act.
P S Dhingra
Vigilance & Management Consultant
Dhingra Consultancy Group
New Delhi