PAYMENT OF GRATUITY ACT
Gratuity is payable on death even if the 5 years have not been completed .
This is for your information that if employees have not completed his 5 years, he is eligible for gratuity.
On Condition:
If an employee completed his 4 years in service and has completed 240 days in the 5th year then he is entitled for 5 years gratuity.
Section 4 of the Payment of Gratuity Act, 1972 provides that an employee will entitled to gratuity on completion of continuous service of 5 years and while clarifying the 5 years complete service, Andhra Pradesh Hight Court had held that the minimum period for becoming eligible for payment of gratuity should not be less than 5 years since it should be complete 5 year service. It was further clarified that the words or part in excess of six months' are only meant for the purposes of computation of gratuity for the subsequent year or years to first complete 5 years. It was also held that if an employee has worked for 4 years 11 months and 10 days, he will not be eligible for gratuity for want of completion of 5 years. Further in a subsequent case, MADRAS HIGH COURT while relying upon the clarification by the SUPREME COURT pertaining to 240 working days in one year will be deemed to be continuous service of one year meaning thereby that there should not be complete 12 calendar months' service. MADRAS HIGH COURT has further held that an employee, who has put in service of 4 Years 10 Months and 18 Days in the 5 years, will be entitled to gratuity.
Case Ref. : Mettur Beardsell Ltd., Madras v. Regional Lab. Commissioner (Appellate Authority under Payment of Gratuity Act), Madras etc., 1998 (3) LLN 414
Further in a subsquent case, MADRAS HIGH COURT while relying upon the clarification by the SUPREME COURT pertaining to 240 working days in one year will be deemed to be continuous serice of one year meaning thereby that there should not be complete 12 calender months' service. MADRAS HIGH COURT has further held that an employee, who has put in service of 4 Years 10 Months and 18 Days in the 5 years, will be entitled to gratuity.
Case Ref. : Mettur Beardsell Ltd., Madras v. Regional Lab. Commissioner (Appellate Authority under Payment of Gratuity Act), Madras etc., 1998 (3) LLN 414.
R K