Gratuity Eligibility and Legal Aspects: Detailed Insights on Service Duration and Employee Benefits

Hi,

I worked for a company in India from 18th July 2005 to 5th July 2010. From 6th July 2010, I was transferred to the USA location of the same company on an intra-company transfer visa. I worked until 18th November 2011 in the USA and resigned on the same day.

When I asked my company about the gratuity amount, they said I am not eligible for gratuity as I have not completed 5 years of service in India. However, I believe I am eligible for gratuity as I have served the company for more than 6 years (4 years 11 months and 17 days in India and the remaining period in the USA).

I have the following questions:
1. Am I eligible for gratuity at all?
2. If I am eligible, would I be paid gratuity only for my service in India?

Your response is greatly appreciated.

Thanks,
Saritha

Hi Saritha,

You have completed 4 years, 11 months, and 17 days. You are eligible for gratuity as per the act. Even if you completed 4 years and 6 months, the next 6 months will be considered as completing 5 years only.

Amount of gratuity payable - Gratuity is payable at 15 days' wages for every year of completed service. In the last year of service, if the employee has completed more than 6 months, it will be treated as a full year for the purpose of gratuity.

In the case of a seasonal establishment, gratuity is payable at 7 days' wages for each season. [Section 4(2)].

Wages shall consist of basic plus D.A., as per the last drawn salary. However, allowances like bonus, commission, HRA, overtime, etc., are not to be considered for calculations. [Section 2(s)].

So, you can take into account this legally.

Dear Saritha,

I do agree with Satyaak. You are definitely eligible for gratuity. Your 4 years and 11 months will be counted as 5 years of service. So, for sure, you can ask for and take legal action for your gratuity amount.

The most important aspect is where you were receiving your salary when you were posted in the USA. If the present company has officially transferred you with the issuance of transfer orders on the company's letterhead, then you are eligible to claim Gratuity for the entire service as you would be considered an employee of the company. Whereas, if you only consider your 4 years and 11 months, then you are still eligible for Gratuity as per the Factories Act.

Regards, Kenhr Management Consultancy

Hi Saritha,

You are eligible for Gratuity. Four years and 240 days are sufficient for you to get gratuity from your ex-employer. You have worked for 4 years and 353 days. Please refer to the Labour Law Report - 1998LLR1072 (Madras HC).

Regards,
Chaithanya.

You are very much eligible for your gratuity. Simply fill up the Final settlement form No. I (see the attachment) and hand it over to your employer to obtain a copy with acknowledgment. Keep it safely. They have to settle within 1 month. Thereafter, if they delay, they have to settle the gratuity along with interest for the delayed period until they settle with you.

Regards,
Kumar.s.

I completed 4 years and 353 days at the company in India and left, but I still haven't received the gratuity amount. They continuously provide reasons for not confirming the rule of granting gratuity without completing exactly 5 years, even though various references are available online.

As I left the company in June 2016, prior to the demonetization period when FD interest rates were around 8%, and now, after demonetization and approximately 1 year and 2 months later, with what interest rate should I receive the gratuity amount?