Gratuity Payment - Road Accident

Kannan Sir
I agree with Mr.keshav Koregaonkar.There is no need to regret. In fact I want to clear my understanding about the eligibility of a deceased employee vis-a-vis LIC Scheme. You have now clarified it. Thanks.
B.Saikumar
HR & Labour law Advisor
Mumbai

Dear Vasant Nair

You have differed from S.D.Patil's view and according to you, the deceased employee( or his nominees/legal heirs) is entitled to gratuity even for four months. I hold the same view as that of S.D.Patil.Probably you appear to have based your finding on Sub-sec.(1) of sec.(4). No doubt Sec.4(1) dispenses with the requirement of 5 years of continuous servcie in case of death or disability and makes such employee eligible for gratuity.

Thus Sec.4 (1) deals with mere eligibilty. Once the eligibility is decided under Sec.4(1), then the next question is how much gratuity is to be payble to the employee. That question is not answered by Sec.4(1) and that is answered by Sub- Sec.(2) of Sec.4 of the Gratuity Act . Sec.4(2) links the quantum of gratuity payable to an employee to the period of sevice rendered by him in the organisation. It says gartuity is payable at the arte of 15 days wages for every completed year of servcie.

Therefore the Act desires that an employee shall atleast complete one year of service. In construing an year of service, Sec.4(2) considers any period of service in excess of six months as one year.This is the mandate of Sec.4(2). Therefore Mr.Patil said that the deceased employee is not eligible for gratuity in view of his 4 month servcie. Probably this must be the reason as to why he said that gratuity in this case an be paid by the employer as a good will gesture. I also subscribe to this view.

B.Saikumar

Mumbai

Dear Kannan & Koregoankar,
Really it was a meaningful discussion to all, in the we reached on a perfect result. Really its a good platform where we can share and can get results for our compliance related problems.

This has become very interesting.
Section 4 of the Act stipulates the pre-condition of completion of 5 years' continuous service to become eligible for payment of Gratuity. It also sates that this pre-condition does not apply in cases where termination of service is caused by death.
Sub Section (2) of Section 4 clearly states that for every completed year of continuous service or part therefof in excess of six months shall attract payment of one year's gratuity.
In this case the employee has worked only for 4 months and is therefore eligible to payment of Gratuity only for these four months.
I would like to stay with my original opinion that the deceased's nominee is entitled for Gratuity claculated for 4 months.
Vasant Nair