Am I Eligible for Gratuity After Working 4 Years and 9 Months in Two Cities?

Dear All, I worked in the ISP for the below time period. Note: Half of my tenure was in Bangalore, and the last half was in Chennai. I quit the company when I was working in Chennai.

Employment Duration

From and including: Friday, 14 February 2003
To and including: Friday, 30 November 2007

It is 1,751 days from the start date to the end date, with the end date included. This is equivalent to 4 years, 9 months, and 17 days, including the end date.

I request you all to let me know if I am eligible for Gratuity or not.

Thanks in Advance,
Sreeni

According to the decision of the Honourable Madras High Court in Mettur Beardsell's case, you are entitled to gratuity. As per this decision, the last 9 months and 17 days have to be regarded as one year of continuous service under the PG Act. If interpreted this way, you have completed five years of continuous service required under the PG Act to be entitled to gratuity. If your employer refuses to pay gratuity on the grounds that you had not completed five years of continuous service as required by the Payment of Gratuity Act, you may file a claim before the Controlling Authority under the Payment of Gratuity in Chennai, appointed by the Central Government, as your employer has branches in multiple states. Before the Controlling Authority under the Payment of Gratuity Act, you can reference the decision of the Madras High Court in Mettur Beardsell's case. This Controlling Authority, located and functioning in Chennai within the territorial jurisdiction of the Madras High Court, is bound by the decision in Mettur Beardsell's case. Wishing you good luck.

Regards,

Dear Hari Krishnan Sir, Thanks a lot for the valuable reply. I have some confusion regarding your statement; please clarify it for me.

Clarification on Filing a Gratuity Claim

Hari Sir's Statement: “You may file a claim before the Controlling Authority under the Payment of Gratuity at Chennai, appointed by the Central Government, as your employer has branches in more than one state.”

Do I need to go to any Central Government office also for the claim, or only to the Controlling Authority under the Payment of Gratuity at Chennai?

Sir, please note: My old employer's head office is in Chennai. So, do I still need to go to the Central Government, or can I just file a claim before the Controlling Authority under the Payment of Gratuity at Chennai?

Thanks in advance.

Regards, Sreeni

Please furnish the following information:

1. What was the last place of your employment? Was it in Chennai, Bangalore, or any other location?
2. Does your employer have branches in more than one state?

If you provide the above information, I will be able to clarify the issues raised by you.

With regards,

My last place of employment was in Chennai. Yes, my old employer has branches across India. For your information, the head office and registered office of my old employer is only in Chennai.

Thanks & Regards,
Sreeni
[Phone Number Removed For Privacy Reasons]

As your last place of employment was in Chennai, the cause of action has arisen there, and the Controlling Authority under the Payment of Gratuity Act in Chennai has jurisdiction to decide any claim relating to you under the Payment of Gratuity Act.

Since your employer has branches across India, the Central Government is the appropriate authority under the Payment of Gratuity Act in regard to your employer. Therefore, if you wish to file a claim under the Payment of Gratuity Act against your employer, you must file the claim before the Controlling Authority under the Payment of Gratuity Act appointed or notified by the Central Government.

In Chennai, the Controlling Authority under the Payment of Gratuity Act appointed or notified by the Central Government is situated at the Office of the Regional Labour Commissioner (Central) in Shastri Bhavan, Nungambakkam. This office also houses the Passport Office.

Regards,

Dear Hari Krishnan Sir, sorry to ask you for a few more clarifications:

1) Can I visit the BANGALORE office of the "Controlling Authority under the Payment of Gratuity Act appointed/Notified by the central government" to claim my gratuity?

2) To claim gratuity through the Controlling Authority, should the company be registered with this Government Authority, or do all companies by default come under this Controlling Authority?

Thanks & Regards,
Sreeni
[Phone Number Removed For Privacy Reasons]

You cannot file a claim before the Controlling Authority under the Payment of Gratuity Act in Bangalore, appointed/notified by the Central Government, as your last place of employment was in Chennai. The company does not need to be registered with the Government Authority for you to claim gratuity.

With regards,

Thank you, HariKrishnaa Sir, for clarifying and answering all the questions. I will reach out to my employer with all these details and will also update this forum with the final status. 

Thanks & Regards,
Sreeni

Below is the response from my employer.  Any suggestions on this, please?

Understanding Gratuity Eligibility

Dear Srinivas,

Please understand that you left in 2007 and are now asking about the gratuity. As per the act, you are entitled to receive gratuity only upon the completion of 5 years. In a judgment, it was ruled in a particular case that employees who have completed 240 days are entitled to gratuity. However, the act has not been amended yet; it is only a court ruling.

As you know, our Gratuity Trust is with LIC, and at the time of forming the trust, it was mentioned in our deed to pay the gratuity only upon the completion of 5 years. To be more precise, this has not been amended. Normally, there is no unpaid fund on this, and we have provided the termination list month on month, and your account was closed.

You should have approached us in 2007 (at the time of leaving) for this clarification, and it is now too late. Associates who have completed 5 years receive their gratuity settlement automatically without asking. I can provide many references for not being paid... the law has not changed, and there is only a court ruling.

Legal Clarifications on Gratuity

Section 4 of the Payment of Gratuity Act, 1972, provides that an employee is entitled to gratuity upon the completion of continuous service of 5 years. While clarifying the 5 years of complete service, the Andhra Pradesh High Court held that the minimum period for becoming eligible for payment of gratuity should not be less than 5 years, as it should be a complete 5-year service. It was further clarified that the words 'or part in excess of six months' are only meant for the purposes of computation of gratuity for the subsequent year or years after the first complete 5 years. It was also held that if an employee has worked for 4 years, 11 months, and 10 days, they will not be eligible for gratuity due to the lack of completion of 5 years.

Further, in a subsequent case, the Madras High Court, while relying upon the clarification by the Supreme Court pertaining to 240 working days in one year, deemed it to be continuous service of one year, meaning that there should not be a complete 12 calendar months' service. The Madras High Court further held that an employee who has put in service of 4 years, 10 months, and 18 days in 5 years will be entitled to gratuity.

With this, I am closing this mail.

Regards,

The decision of a Single Judge of the Madras High Court in Mettur Beardsell's case has not been overruled yet, either by a Division Bench of the Madras High Court or by the Supreme Court. It is correct that the Payment of Gratuity Act has not been amended. However, the judgment of the Single Judge of the Madras High Court is an interpretation of the existing provisions of the Payment of Gratuity Act, especially on the definition of "continuous service." The judgments of the High Courts and Supreme Court are also law.

In some other thread in Citehr, I have quoted extensively from an article by a practicing advocate and also from a judgment of the Honourable Bombay High Court, which has held that the Tribunals in a State (in your case, the Controlling Authority under the Payment of Gratuity Act) are bound by the decisions of the High Court in whose territorial jurisdiction that Tribunal is functioning. If this principle is applied, then the Controlling Authority under the Payment of Gratuity Act at Chennai has to follow the decision of the Madras High Court in Mettur Beardsell's case and to award gratuity to you. The Controlling Authority under the Payment of Gratuity Act at Chennai need not follow the judgment of the Andhra Pradesh High Court referred to by your previous employer, as a judgment of the Madras High Court on the issue is still in force.

You left the services of the ISP in 2007. You should have applied for gratuity to the ISP within thirty days from the date on which your employment came to an end. As per the information furnished by you, there is a delay in the submission of the request to the ISP or probably you have not submitted the request to the ISP at all. You can still apply for gratuity to the ISP in the prescribed form and through registered post with acknowledgment due, and in the application form, you can give the reasons for not applying within the prescribed time. If the employer either remains silent or refuses to either condone the delay or to make payment of gratuity, you can, after waiting for fifteen days from the date of receipt of the application for gratuity by the ISP, file a claim petition before the Controlling Authority under the Payment of Gratuity Act in the prescribed form.

Regards,