Am I Eligible for Gratuity After 4 Years and 11 Months of Service?

Hi, please advise. I have been in regular service for 4 years, 11 months, and 17 days on the payroll of the company. (For example: my date of joining was November 26, 2005, and my last working day would be November 13, 2010). Will I be eligible for the Gratuity?

Eligibility for Gratuity Under the Payment of Gratuity Act, 1972

Put your claim before the employer if the Payment of Gratuity Act, 1972 is applicable to the establishment where you are working. If denied, you can fight for the claim utilizing the judgment of the Hon'ble Madras High Court. Strictly according to the Act, one needs five years of continuous service. This is the only ruling which supports such cases, and thereafter, it depends upon the Controlling Authority under this Act how they take up/consider the matter.

Regards,
R.N.Khola

Hi, please advise. I have been in regular service for 4 years, 11 months, and 17 days on the payroll of the company. (For example: my date of joining was November 26, 2005, and my last working day would be November 13, 2010). Will I be eligible for the Gratuity?

Gratuity Eligibility Criteria

Please note that one should work for not less than 5 years of continuous service to qualify for gratuity. When calculating the length of service for each year, the employee must work for not less than 240 days, which should include holidays and leaves taken, among others. In your case, you did not provide any information regarding the actual number of working days for each year. To be eligible for the bonus, you must work for more than 240 days for 5 years consecutively.

According to your statement, you have worked for 4 years, and in the 5th year, you worked for only 11 months and 17 days. If your number of working days is not less than 240 days each year continuously, then you will be entitled to receive your gratuity.

Regards,
NVRao
Hyderabad

Just to elaborate:

Employment Details

My Date of Joining (DOJ): 26 Nov 2005
Resignation Date: 30 Sep 2010

I am serving a notice period of 45 days, i.e., till 13 Nov 2010, whereas as per the company agreement, I am supposed to serve a notice period of 90 days. During my notice period, 20 accumulated leaves earned by me will be adjusted, and the rest will be bought out by my new employer. Will this help, as including this, I will complete 5 years of service?

Please advise.

I agree with Mr. Khola that if somebody has completed 4 years and 240 days (service period as per the Payment of Gratuity Act), then he/she is eligible to receive gratuity as per one or two judgments. Unfortunately, no employer accepts the above-said conditions unless someone resorts to litigation (which is not recommended for a good and fair employee/professional).

However, I would suggest you apply to your employer through Form No. I (specified in the PG Act) and see what happens.

Regards,
Amit Dhiman

If you are in continuous service, then don't worry. Let's complete 5 years of continuous service, and as per the act, you will be entitled. If your employer removes you from the job, you can approach the Commissioner stating that you have been removed due to another reason, but the main reason is that your employer doesn't want to pay gratuity. This makes your claim stronger, and you may be entitled to gratuity.

Understanding the Payment of Gratuity Act

The Payment of Gratuity Act states that there should be 5 years of continuous service or 6 months thereof. This means that even if there are any fewer months required for the full 5 years, you are still entitled, and it should be calculated based on 5 years.

If you have completed 240 days of continuous employment in the fifth year, yes, you are entitled to payment of Gratuity.

Best Wishes,
Vasant Nair

Gratuity is payable to staff members who resign after continuous service of 5 years. In your case, it is 4 years and 11 months. I think you are not eligible for gratuity payment as per the Gratuity Act.

Regards.

To the best of my knowledge and belief, a period of more than 6 months is to be rounded off to the next full year. According to this ruling, a period in excess of six months, which is 11 months and 17 days, is to be rounded off to the next full year, that is, a full 5 years, making the employee eligible and entitled to payment of gratuity. As suggested earlier by some friends, the concerned employee may apply to her employer for payment of gratuity in the prescribed form and await a reply. Certainly, the response should be positive. If it is negative, then the aggrieved employee may apply to the controlling authority for relief.

To avoid this, the concerned employee should have attempted to complete a 5-year tenure with his/her former employer. The notice of 90 days is the minimum period. The law does not forbid anybody from giving more than a 90-day notice. In this case, the notice period could have been 103 days. The new employer would have also not objected to a delay of 13 days to help the employee comply with the eligibility criteria for gratuity. Others may take a lesson and try to comply with the eligibility criteria for such short durations. The important issue here is whether the notice period can be more than 90 days or not. My assertion is that it can be more than 90 days, not short of 90 days in any case. I wish success to Elamita in his/her efforts to get gratuity from her former employer and also note the lesson which could avoid such complications in the future.

Regards.

Hi Elamita, as per the latest amendment, if you have completed 4 years and 6 months of continuous service, you will become eligible for gratuity.

Regards,
R. Devarajan

Eligibility for Gratuity

As per the act, Mr. Elamita is eligible for gratuity provided he worked for 240 days/190 days continuously for the completed years of service. Please refer to sections 2A and 4 of the Act.

Suppose someone has completed six years of continuous service in an organization, and their gross salary was Rs. 7,075/- upon leaving. What should be the amount of gratuity payable to them, and how is it calculated?

Gratuity Calculation and Claim Process

The formula for the calculation of gratuity is provided in Section 4 of the Payment of Gratuity Act, 1972. To understand the format of the claim, one is required to review the applicable Gratuity Rules, whether central or state-specific. The form may vary from state to state.

Regards,
R.N.Khola

You are eligible for gratuity payment. The minimum period for receiving gratuity is 4 years and 8 months. You have completed the required period, and the company is liable to pay the amount.

Regards,
BKMALVI

Dear R. Devarajan, Where is the latest amendment on the issue of eligibility? We have not come across such an amendment.

With Regards,
R.N. Khola

Dear Heena,

Please find enclosed the form "I" application for direction to the employer under The Payment of Gratuity Act.

Regards,
KIRAN KALE.

Eligibility for Gratuity in Absence of Appointment Letters

I worked for a company from 1999 to 2007. Since it was a small branch that had just started, we did not have any policies regarding issuing appointment letters or similar documents. In this scenario, is the employee eligible for gratuity? Furthermore, the company has changed its name 2-3 times.

Thank you.

Regards,

Simply put, you first need to complete 5 years of continuous service. Thereafter, rounding off and other options are available.

Sir, I will be completing 4 years and 9 months and reaching superannuation. Am I eligible for gratuity? I am working in a private company.

Thank you.

Welcome to CiteHR. For your query, please go through similar topics provided on the right side of your posting.

R.N.Khola

"Rounding off period in excess of six months to treat the said period as one year" applies only for calculation purposes and not for eligibility for payment of Gratuity.