Am I Eligible for Gratuity After 4 Years and 240 Days? Seeking Advice and Proof

I am working in the IT industry, and I work 5 days a week. My date of joining the organization was 09.04.2007, and my last working day in the organization was 05.03.2012. Since I am not completing 5 years, my company is not willing to pay the gratuity amount due to me. After researching on different websites, I found that a person who has worked for 4 years and 240 days becomes eligible for gratuity payment, though I didn't find any supporting clause or section. If this is true, then I believe I am eligible for gratuity payment.

Can I request your expertise here as I have no knowledge of the subject? Am I eligible or not? If yes, can you provide some supporting documents which I can forward to my company so that they pay my gratuity amount?

Many thanks in advance.

Regards

You have no doubt completed four years by 8th April 2011. Since you resigned on 5th March 2012, you should have also worked for 240 days during the twelve-month period from 4th March 2011 to 5th March 2012 to be eligible for gratuity. However, any leave with wages availed by you during the said 12 months will be included in calculating the 240 days.

Regards,
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
Tel: [Phone Number Removed For Privacy Reasons]

Thanks, Sai, for your response. I don't think I have availed leave in excess of 15 days, which includes my casual, sick, and annual leave. If you take that into account for accounting purposes, even though it totals more than 240 days, it makes me feel like I am eligible. What do you think? Can you please share some documentary proof that states a person who has served 4 years and 240 days in any organization is also eligible for gratuity payment? Is this necessary as I need to show my company that I am eligible? Thanks again for your kind help.

Regards,
Vishal Srivastava
[Phone Number Removed For Privacy Reasons]

Please refer to the book "BARE ACT Gratuity Act" for documentary proof. This book is legally valid. Any person who has completed 4.5 years or more is eligible for gratuity. Also, you may find court orders on Google as well.

Thanks,

Hi Vishal, I can provide a citation of a case in support of what I have said. You can show it to your company after procuring a copy of the judgment. The case is Mettur Beardsell Ltd, Madras v. Regional Labour Commissioner (Central) 1998 III LLN 414; 1998 LLR 1072 (Mad HC). Additionally, you can also browse Chipinbiz Company's website for e-books that deal with similar issues.

Regards,
B. Saikumar
HR & Labor Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
Tel: [Phone Number Removed For Privacy Reasons]

I support the statements of Mr. Sai Kumar. Since you have worked for four years and in excess of five months, you are eligible for Gratuity. We have incorporated this clause in the Gratuity Policy amendment of our company recently.

Regards,
Sumit

Dear Vishal,

Please go through the highlighted attached portions of the Gratuity Act (bare act) which are relevant to your case, and you'll know how you are placed. Don't delay; put them on the defensive, apply for your claim in the prescribed form under proper acknowledgment immediately, and wait for exactly one month. Then, follow up on the lines of what the act says. Don't worry, don't delay.

There are umpteen numbers of case laws similar to yours.

All the best.

Regards,
Kumar S.

Gratuity Entitlement Clarification

For entitlement to gratuity, one should complete 5 years of service. It is a must as per the Gratuity Act. However, in one case, the Madras High Court gave a verdict stating that the completion of 4 years, and in the 5th year, if anybody puts in 240 days of work, it should be treated as completion of 5 years of service, and such a person is eligible for gratuity.

The Gratuity Act is a Central Government Act. The Central Government has to amend it for applicability in all states. Therefore, at present, this completion of 4 years and 240 days in the 5th year for gratuity payment is applicable in the Madras State only. In other states, one should complete 5 years of service.

If any management wants to pay gratuity as per the Madras High Court's decision, it will be a welcome aspect in the interest of the welfare of employees. Nothing prevents.

Regards,
D. Gurumurthy
LL.HR & IR Consultant

I have worked for a reputed Indian company for 4 years and 9 months in the capacity of Senior Manager, out of my total 22 years of career with some good companies. I need help and suggestions on the following points.

Gratuity Payment Eligibility

1. If a past employer is not willing to pay the gratuity despite all provisions, to whom should I approach since I have worked for 4.9 years and am eligible as per the Gratuity Act?

Reduction in Fixed Compensation

2. Can an employer reduce the fixed compensation (fixed emoluments) to less than what was offered prior to joining without any reason to any individual employee in the middle of employment (at least after working for 2 years), especially when the employer had offered better prospects before joining the organization? If not, whom should I approach for justice?

Thanks,

Regards,
Suresh

I agree with Mr. Gurumurthy. Please don't waste your time. Gratuity is applicable after 5 completed years only.

Gratuity Eligibility Clarification

Gratuity is payable only after the completion of 5 years of continuous service. Please don't get confused. You are not entitled after 4 years and 9 months.

Regards

Please read the above statement to understand how it becomes.

Formula for Gratuity Calculation

=current basic / 26 * 15 * service period

Thank you.

Is this 240 days inclusive or exclusive of weekends or holidays falling in between?

Regards,
Anu

Although I am ready to stand corrected, I believe eligibility would trigger only upon completion of 5 years (and not the 4 years and 240 days).

Regards

[QUOTE=tripathianoop;1771126] Mr. Suresh, Gratuity is payable only after the completion of 5 years of continuous service. Please don't get confused. You are not entitled after 4 years and 9 months.

Dear All,

Please go through the link where a similar query was already discussed. You'll find the SC judgment attached thereto. For your reference, the same is attached. If anybody doesn't wish to believe it, it's your choice.

Regards, kumar.s. https://www.citehr.com/104526-sc-rul...tuity-act.html

Dear Anu,

You were paid wages for the days of service (including weekly offs, holidays, etc.) except for breaks in service, if any. Therefore, for the purpose of "Continuous Service," your rendered service is counted.

Regards,
Kumar S.

Difference Between Gratuity and Service Compensation

I would like to know the difference between "Gratuity" and "Service Compensation." How will the Service Compensation as per the Shops & Establishments Act be calculated, and what is the eligibility? I would be very grateful if learned friends could shed some light on this as I am quite confused on this subject.

Thanks & Regards,
Pradeep

Relevant Extract from the Gratuity Act

Please see the relevant extract from the Gratuity Act.

kumar.s.

Dear Pradeep,

As you seem to be located in Andhra Pradesh, the AP Shops & Establishments Act, 1988 would be applicable. The term Service Compensation is referred to in this Act in the case of "termination"; this is known as "Service Compensation." Gratuity, on the other hand, is payable under the Gratuity Act. Both are different. Why are you confused? What is the matter?

Please see the attachment for more clarity.

Regards,
Kumar S.

In my view, this Sec. 47, specifically 47 (5), should be reviewed together with the Gratuity Act. Under the Gratuity Act, eligibility requires a continuous service of 5 years. Depending on these conditions, one must study the individual's case. A plain reading suggests he would be eligible since he won't be paid under the Gratuity Act. However, you may search for some settled case laws which could shed more light on this issue. Right now, I don't have the relevant case laws. You may consult an advocate in AP.

Regards,
Kumar S.

Dear Sir, My son-in-law joined a multinational software company on the 9th of May 2007 and resigned from his job effective from the 10th of February 2012. (The resignation was at the instance of the management, I understand). Unfortunately, he passed away on the 3rd of March 2012.

Gratuity Claim Inquiry

I kindly seek information on whether his nominee can claim gratuity, considering he had not completed five years of service at the time of resigning from the job. If there are any relevant decisions and judgments on this matter, please inform me at your earliest convenience. Kindly reply to my email ID [Email Removed For Privacy Reasons].

Thanks and regards,

R.K. RAJAGOPALAN
No. 9, 7th 'B' Main, Muthiyal Nagar, Bangalore - 560054
Mobile: [Phone Number Removed For Privacy Reasons]

Gratuity Calculation: Components of Salary Considered

For gratuity calculation purposes, which parts of the salary are considered? Is it just the basic salary or are any other allowances like Dearness Allowance included? In the private sector, allowances are often named differently, such as Specialization Allowance, in addition to the Basic salary. The Act specifies 'WAGES'. Is this Specialization Allowance included in the definition of 'WAGES'?

You have no doubt completed 4 years by 8th April 2011. Since you resigned on 5th March 2012, you should have also worked for 240 days during the twelve-month period from 4th March 2011 to 5th March 2012 to be eligible for gratuity. However, any leave with wages availed by you during the said period of 12 months will be included in calculating 240 days.

Gratuity Calculation

For gratuity calculation purposes, what parts of the salary are considered? Is it just BASIC or any other allowance like Dearness Allowance? Private sectors call the allowances differently, like Specialization Allowance, apart from Basic as part of the salary. The Act says 'WAGES'. Is this Specialization Allowance part of the 'WAGES' definition?

Regards,
Janardhan.

If the gratuity is part of CTC, then is it mandatory to pay in F&F even if the period is less than 5 years?

Regards,
Tejas K

As per my knowledge and experience:

1. The Assistant Commissioner of Labour of your establishment (organization) area is the proper authority under the Payment of Gratuity Act. You can initially make a simple application to him regarding your case. Upon receipt of your application, the authority will contact your previous company and attempt an amicable settlement. If no settlement is reached, then you can have your lawyer file a case for the payment of gratuity under reference.

2. Regarding the reduction of remuneration - since you are working at a senior level, at the time of joining, you must have received the appointment order or documents related to remuneration. Based on these documents (showing higher pay), you can claim in court for a violation of the contract. While this is possible, it is not advisable as making a litigation with the employer at your senior level may cause problems for you. This is my opinion.

Regards,
SDP

I have been working as a staff nurse at a hospital for six years and six months. I resigned on September 15th, but I have not received my gratuity yet. How many months do I have to wait to receive my gratuity money? Please help me.

Regards

Am I eligible for gratuity? I joined a private limited company on March 22, 2007, and worked continuously until May 31, 2012.

From March 2007 to February 2008 - Total days worked = 242 days
From March 2008 to February 2009 - Total days worked = 270 days
From March 2009 to February 2010 - Total days worked = 234 days
From March 2010 to February 2011 - Total days worked = 268 days
From March 2011 to February 2012 - Total days worked = 225 days
From March 2012 to May 2012 - Total days worked = 58 days

There were no breaks in service during this period. Our company has mentioned that the days worked in the 3rd and 5th years are less than 240 days, indicating that gratuity may not be applicable to me. Could you please advise on this matter?

Thank you for your assistance.

Regards,
Aazad