Understanding Gratuity and Retrenchment: Do 240 Days Include Leave and Holidays?

With reference to one of the senior member's comments on citehr, I want to clarify whether this 240-day criteria for Gratuity and Retrenchment includes "Leave, Weekly Off, and Government Holidays" or only physical presence.

Thanks in advance!

Regards

Not only under the Payment of Gratuity Act but wherever references to 240 days are made under various Acts, such as the Industrial Disputes Act for retrenchment compensation or layoff compensation, leave with wages under the Factories Act, Mines Act, etc., the days of paid leaves, leave due to employment injuries, maternity leave (in the case of women), layoff days, legal strike days, holidays, etc., will be considered as days worked. Therefore, 240 days should include all paid holidays and leaves.

Regards,
Madhu.T.K

Dear Seniors, I would like to know the definition of a workman and who falls under this classification regarding retrenchment.

Regards,
Payush

A workman is one who is employed for wages and who is not in the managerial or supervisory capacity. Though a supervisor drawing a monthly salary of more than Rs 10,000 per month is out of the purview of the Industrial Disputes Act, the real test of whether an employee is out of coverage of the ID Act is based on the following:

1. Whether the employee has the right to approve leave for his subordinates?
2. Whether the employee is the authority to initiate disciplinary action against others?
3. Whether the employee is the authority to appraise his employees.

If the answer to any of these questions is Yes, he will not come under the definition of a workman under the Industrial Disputes Act. Retrenchment benefits are the same in all sectors. However, for workers working below the ground (in mines), the number of days which constitutes continuous service is 190 days and not 240 days. The formula for computing gratuity remains the same.

Regards,
Madhu.T.K

Hi,

How do we calculate earned leaves for contract labor? The employee has worked for 240 days continuously; he/she is eligible for earned leave. Is this the same for contract labor?