Is My Wife's Maternity Leave Affecting Her Gratuity Eligibility? Seeking Advice on Legalities

Dear Members, My wife will be completing 5 years in a company on 10th July 2011. I have a few queries regarding her gratuity.

1. She had taken maternity leave from 4th May 2010 to 17th July 2010. Furthermore, she extended her leave until 30th November 2010.

2. She was paid a salary for a 12-week period, and the rest of the months were leave without pay. Now, the company is telling her she has to work for all the leaves taken, including CL, EL, maternity leave, and leave without pay taken during her term of employment, and only then is she eligible for gratuity. Is this the law?

Any feedback would be of great help. Kindly assist me.

Warm regards, Chandra Shekar

If she is working up to July '11 (completing five years), she will be eligible for Gratuity as per the Payment of Gratuity Act. In the Gratuity Act, there is no provision for working against the leave taken.

With Best Wishes,

Leave and Gratuity Considerations

Leave with wages is considered as days worked. Leave without wages can be considered as a break in service. The company cannot ask her to work for all the leaves taken, but they may ask her to work for the number of days for which there was leave without wages to complete 5 years of service.

Regards,
Kamal

Dear Kamal,

Thanks for the info, but does she need to work for 4 more months or just the differential for the mandatory 240 days working? Because if it's mandatory 240 days, she would have worked for 239 days already in the calendar year. Also, I would like to tell you that the company forfeited her earned leave, saying they cannot grant both together. Your input would be very helpful.

Regards,
[Username]

An employee is eligible for payment of gratuity after the completion of 5 years of continuous service. There are high court rulings where the court has ruled that if the employee has completed 4 years of service and worked 240 days in the 5th year, he/she will be eligible for gratuity. Unfortunately, till today, The Payment of Gratuity Act, 1972 has not been amended in this regard. It is possible that the company may ask her to complete 5 years of service by working the number of days left in completing the full 5 years. Earned Leave (EL) has nothing to do with gratuity. Gratuity and EL encashment can be given together.

Regards,
Kamal

I don't remember exactly, but there is also a Supreme Court ruling that "an employee rendering service of 4 years 10 months and 11 days is considered to have completed 5 years of continuous service."

You can refer to these court judgments regarding the definition of 5 years of continuous service.

Reference to Kamal's Views

Kamal's views are correct. I am adding the judgment for your reference.

Regards,
S. Sethupathy, Erode.