Gratuity Payment for Less Than 5 Years: Is It Ever Possible and Under What Conditions?

Gratuity Payment for Less Than 5 Years of Service

Is it possible to receive a gratuity payment for less than 5 years of service in any case? If so, under what circumstances?

Regards

If I worked in my company for 4 years and 8 months, why am I asking? Because, in fact, it has been said that if you work more than six months, then the next year shall be taken into consideration.

Regards,
Vishwajeet - HR

Termination Due to Death

Can you please explain further?

Everyone has a different interpretation. To be eligible for gratuity, you need to have continuous service of 5 years or more without a single day less. Working for 240 days in a year does not equate to working for one full year.

Regards,
Clement

Dear Members, if one works for 9 years and 7 months, should their service be considered as 10 years for gratuity purposes? Please clarify.

Regards, Veda

If the employee concerned has rendered continuous service with the same employer whose establishment is covered under the Payment of Gratuity Act, 1972, then we are to consider this period of service as ten years for the calculation of gratuity.

Regards,
R.N.KHOLA

Dear Mr. Balvinder,

As per the Factories Act, if an employee has worked for a full calendar year and has not worked for 240 days due to absenteeism (with some exceptions), then he is not eligible for Privilege leave in the subsequent year and vice versa.

As per the Gratuity Act, if an employee has resigned in the fifth year of his employment (not calendar year) and has worked, say, 11 months, and completed 240 days, then he is not eligible for gratuity as he has not completed 5 years of service.

Regards,
Clement

Yes, you need to consider it as 10 years as he completed 6 months. After 5 years, if an employee works for more than 6 months in a year, it is to be taken as 1 year for calculating the gratuity amount. Less than 6 months will not be considered.

Cheers,
Jai