Gratuity and Service Calculation: How Do Leaves and Accidents Affect Eligibility?

Could you please help me with the following points:

1. How to calculate gratuity in case of death?
2. How is service calculated? Do we need to consider casual leave and loss of pay?
3. In the case of an accident, if a person has completed 5 years and taken 3 months of leave, is he eligible for gratuity?

Regards,
Sriram

As per the act, the completion of continuous service of five years shall not be necessary where the termination of employment of any employee is due to death or disablement. Service needs to be calculated by considering the retirement age as per the appointment letter.

Gratuity Calculation in Case of Death

Gratuity is payable to the employee due to death based on the number of years he or she has worked. For example, if an employee worked for 5 years and 240 days, then that employee is eligible for gratuity for 6 years. Gratuity is calculated based on Basic + DA / 26 days x 15 days, which equals one year gratuity amount multiplied by the number of years.

Even if an employee died while in service before the completion of 5 years, gratuity is to be paid based on the number of years the employee worked. For instance, for one year of service, it is calculated as Basic + DA / 26 days * 15 days = 1 year x 1 year (or) the number of years worked.

No way does this relate to the full 'retirement age'. In the case of the death of an employee, gratuity needs to be paid even for only one year of service or the number of years the employee worked.

Senior's views, please.

Regards,
Sundararaman

I appreciate the views of Pragna and Sundararaman on the payment of gratuity and agree with their perspectives. In the case of death while in service, the time limit for the eligibility clause of 5 years is not applicable. The benefit is paid to the dependents for a full term, as it is done in the case of a retiring employee, as per the terms and conditions of employment at the retirement age.

For the past service, if any, it is calculated on an actual basis, and the rest on an assumed basis as if the individual is on continuous service.

Clarification on Leave and Service Calculation

This has been answered in detail in previous posts. Please go through the originally noted links.

CL (Casual Leave) and LOP (Leave on Loss of Pay) are both counted towards the service. CL and LOP, when availed with proper approval, do not constitute a break in service nor indicate indiscipline.

PL/Medical leave for accidents, with proper approval, can be deducted from the leave balance. Even if there is insufficient PL/ML or Sick leave in the leave account, LOP or Leave without pay can be granted without resulting in a break in service.

Regards, Kumar.s.

Gratuity Calculation

In the case of death, gratuity is to be calculated based on the number of years served by the deceased employee. This approach is not in line with Ms. Pragna's views.

Regards,
Satish

An employee died after serving only 6 months of service. What will be the gratuity, and how should it be calculated?