Gratuity Eligibility: Does Working Across Group Companies for 5 Years Count?

Dear Seniors,

Is gratuity eligible if an employee has served 5 years of service in more than one group company with the same/family directors? He has not served 5 years in a single named company. Furthermore, if it is mentioned in the appointment letter that he can be transferred to any of the working places or any of the group companies, would eligibility make a difference?

Thanks in advance.

Dear Dinesh,

If you have taken or given your full and final amount for the service rendered by you at different places of your group of companies without completing five years of continuous service as per section 2A of the PG Act, 1972, then you are not entitled to have gratuity from the group of companies. However, if you are transferred from one company to another company as per the terms and conditions of service with continuity of service, then in that case, if you serve different units and complete 5 years of service as per the requirement of the Act, you are entitled to receive gratuity from the employer.

Opinion/comments submitted as requested.

With Regards,
R.N.Khola

Quote from dinesh@elecomdelhi.com;1033865:

Dear Seniors,

Is gratuity eligible if an employee has served 5 years of service in more than one group company, having the same/family directors? He has not served 5 years in a single named company. Further, if it is mentioned in the appointment letter that he can be transferred to any of the working places/any of the group companies, would eligibility make a difference.

Thanks in advance.

Thanks for the quick reply.

The case is: 01.04.2004 till 31.03.2008 in Xyz Pvt Ltd and 01.04.2009 till date in ABC Pvt Ltd, both being the same group company having common directors and shareholders.

Thanks