Does Leave and Weekends Count Towards Gratuity Eligibility in My 5th Year?

Dear seniors, I had worked with an IT company for 4 years, 8 months, and 17 days. As I have completed 240 days in the 5th year, I'll be eligible for gratuity. However, I would like to ask whether the casual/privilege leave and Saturday/Sunday will be counted within those 240 days of the last year. The HR team of my company is also not aware of this. They are asking if I can provide this information in writing. Kindly suggest.

Regards, Preeti

Please refer to Section 2A of the Payment of Gratuity Act, 1972, regarding continuous service in your HR department.

Regards,
R.N. KHLOA | Sr. ASSOCIATE | LL&IR | SKYLARK ASSOCIATES | GURGAON | HARYANA | Labour Law Consultants | Mobile: [Phone Number Removed For Privacy Reasons] | Welcome Skylark Associates

Thank you.

Whether you have completed 5 years of continuous service is what needs to be verified. I understand that for the CL/PL, you have availed the same after obtaining approval in accordance with your leave entitlement. If it's not an approved leave, then it would amount to LWP, which would imply a break in service. Unauthorized leave would result in a break in continuous service and hence would pose an issue when checking your eligibility for gratuity. Sat/Sun (if they are official weekly holidays in your organization) would not be considered a break in service. The entire concept revolves around the computation of the term "continuous service."

Right then, get back into your leave records and check for the same.

Dear Senior,

All my CL/PL leaves have been approved, and there has been no LWP throughout my tenure. Saturday and Sunday are the weekly holidays. I have already reviewed section 2A and shared the information with the HR team. I will make sure to communicate with them again.

Thank you for your suggestion.

Regards,
Preeti

Gratuity eligibility states that 5 years of service are required to be eligible for gratuity. If you can convince them, then that is good, but in my view, 5 years of service are required to be eligible for gratuity. As you have not completed 5 years of service, then you are not eligible.

Understanding Continuous Service for Gratuity Eligibility

The term "continuous service" of 240 days includes authorized leave, lay-off, maternity leave, etc. There have been numerous cases won in different High Courts of India where an employee completes 4 years plus 240 days and qualifies for gratuity payment. It is a misconception that an employee must complete 5 years of service to qualify for gratuity.

Imagine you have worked for 4 years plus 220 days and then taken unauthorized leave for a month, or you have submitted your resignation papers. In such a scenario, the question arises whether you are eligible for gratuity or not. Even when you are on unauthorized leave and there is no communication from management regarding the sanction or grant of leave, you are deemed to be in service and automatically qualify for gratuity.

Regards