Am I Eligible for Gratuity After 4 Years and 9 Months? Seeking Clarity on Rules and Calculations

I joined the MNC in July 2007, and my last working day would be April 30th, 2012. Am I eligible for gratuity as I have completed 4 years and 9 months (240 days)? Please let me know whether Saturdays and Sundays are not considered when calculating the working days (5 days a week). Is the gratuity amendment applicable for Haryana state too? And how do we calculate gratuity?

Thank you.

No, sir, for gratuity, you need to complete 5 years in full. In that case, not even 4 years and 1 month will be considered. It is not yet amended.

You have not indicated the location of your place of work. If it is in Tamil Nadu, then, for your information, the Honourable High Court of Madras has held in the case relating to Mettur Beardsell Limited that if an employee has completed 240 days in the fifth year of their service with the employer, they are eligible to receive gratuity under the Payment of Gratuity Act. This decision of the Honourable High Court of Madras is binding on all authorities under the Payment of Gratuity Act situated within Tamil Nadu. Therefore, if your place of employment is within Tamil Nadu, you can claim gratuity from your employer based on this decision, provided the Payment of Gratuity Act is applicable to the establishment in which you are employed and to you as well.

With regards,

I have a similar case in Gurgaon, Haryana. I have completed 4 years, 9 months, and 22 days in an MNC which follows the Gratuity Act. Am I eligible for gratuity?

I tried to cite the Madras High Court judgment to my HR, which clearly interprets the qualifying period mentioned in the Gratuity Act to be 4 years and 240 days. They say that it is not valid here. Is there any other Supreme Court judgment in this regard? Please advise on how to proceed.

Thanks in advance.

The authorities in Haryana may or may not follow the Madras High Court judgment.

Regards,
V. Harikrishnan

Yes, you shall be eligible for gratuity. As per the Gratuity Act, there is a clause for continuous service of completed 5 years only (we should consider one year as 240 days completed).

Continuous Service

An employee is said to have rendered continuous service if:

- They have been in uninterrupted service, including service interrupted by sickness, accident, absence from duty with or without leave, lay-off, strike or lock-out, or cessation of work not due to the employee's fault.

Note: If an employee, having been superannuated, is re-employed by the employer without any break in service, they will be eligible for payment of gratuity.

With Regards,
Jignesh Sisodiya
Asst. Manager HR & IR
[Phone Number Removed For Privacy Reasons]

Yes, you are eligible for gratuity under the Act. One condition is that you have to work a minimum of 240 days each year. In certain cases, leave with wages, National and Festival Holidays can also be considered for the calculation of the 240 days.

Regards,
Rampalaniswamy

Gratuity Eligibility Based on Service Duration

The decision by the Madras High Court is not binding on authorities in Haryana. Generally, employers in other states maintain that an employee must complete 5 years of continuous service to be eligible for gratuity. Completing 4 years and 240 days of service does not entitle an employee to gratuity eligibility.

Hello @Jignesh Sisodiya and @Rampalaniswamy, thank you for your insights. I am meeting the 240-day criteria for the 5th year for gratuity, but my employer says that I have to complete 5 calendar years to be eligible. My company is based in Gurgaon, and they are not considering the Madras Court judgment. Can you please advise on how to proceed and how to convince them of my case? At this moment, they are absolutely sure that it is five calendar years.

Your inputs would be well appreciated. Thank you.

You are eligible for gratuity as you have completed 240 days in the 5th year.

Regards,
Ankur

Is there any salary limit in the definition of an employee for gratuity? For example, if anyone who is drawing more than Rs. 6,500 is not eligible to get PF, and they are not covered under the PF Act. I would like to know whether there is any such limit restricting the applicability of gratuity?

Section 2(s) of the Payment of Gratuity Act defines the term "wages." This definition does not put any ceiling on the quantum of wages that could be reckoned for calculating gratuity. However, if you refer to section 4(3) of the PG Act, it states that the maximum amount of gratuity payable cannot exceed Rs. 10 lakhs. Therefore, there is an indirect ceiling on the wages by restricting the maximum amount of gratuity payable.

Regards

Dear Mr. Radhakrishnan,

Understanding Gratuity Under the Payment of Gratuity Act

Section 2(s) of the Payment of Gratuity Act defines the term "wages." This definition does not impose any ceiling on the quantum of wages that could be considered for calculating gratuity. However, if you refer to Section 4(3) of the PG Act, it states that the maximum amount of gratuity payable cannot exceed Rs. 10 lakhs. Therefore, there is an indirect ceiling on the wages by restricting the maximum amount of gratuity payable.

Eligibility for Gratuity

We have one employee who joined us on 13th Oct 2008 and was relieved on 23rd Aug 2013. Please suggest whether he is eligible for gratuity or not.

Regards,
N. M. Vyas