Gratuity Withdrawal Confusion: Does the 5-Year Rule Start from Joining Date?

I wish to have clarity on Gratuity withdrawal terms, which state a minimum of 5 years of regular service in a company. Does this 5 years mean the 5th year of joining, or is it calculated from the date of joining? Please update.

Thanks,
Ashu_bit1

Understanding Gratuity Eligibility

In the Gratuity Act, "Gratuity is applicable to a permanent employee who completes 5 years of continuous service with the organization."

An employee who has completed 5 years of continuous service with the organization is eligible for gratuity, even if the employer approved a two-year break for training or further study.

Effective from the date of joining, an employee who has completed 4 years and 240 days of continuous service in the 5th year becomes eligible for gratuity.

Basically, gratuity is calculated from the date of joining to completing 5 years. For example, if a person joins on 5th Dec 2001 and serves continuously till 5th Dec 2006, they are eligible for gratuity, even if they were on leave for 3 months in a year or for 2 years continuously, as long as it was sanctioned by the employer.

Hi, I have a question. One of my colleagues has been working in a company for the past 4 years and 250 days. Recently, he resigned from the company. Can he claim gratuity? If yes, on what basis?

Regards,
Mohan

Gratuity Payment Terms

Please note that according to Section 4 of the Act, gratuity becomes payable only after rendering continuous service of not less than five years, unless the termination of the employment of any employee is due to death or disablement.

Regards,
Apex Management Consultants, Parwanoo