Gratuity Act Dilemma: Should Gratuity Be Paid if 240 Days Were Not Worked in One Year?

Gratuity Act Query

As per the Gratuity Act, a minimum of 240 working days is required. I have a query: if a worker has worked for 5 years but within those 5 years, in one year, he did not work for 240 days, and the company did not take any action against him, what should be done? Is it necessary to pay the gratuity amount?

Thank you.

Regards

If he has been on the regular rolls of the company and has not had any loss of pay days in between the five years of service, and if no disciplinary action was taken against him, then he will be eligible to receive gratuity.

Regards,
Madhu.T.K

One more thing, is there a need to pay 5 years of gratuity payment, or is it valid if we pay for 4 years?

Thanking you for your valuable suggestion.

Regards,
Pravin K.

If breaks in service (meaning a shortage of days to complete 240 days) are waived off, naturally the year will become part of continuous service, and as such, you would have to give five years of gratuity.

Regards,
Madhu.T.K

I would like to get one clarification from you. Whether the contract labor is eligible for Gratuity after completion of 5 years of service. In case they are eligible, and if the subcontractor is not paying the same, who is responsible? Kindly clarify.

Regards,
R Sudahkar

Workers engaged through a contractor, if completing five years of service, are eligible for gratuity, and the primary responsibility of paying the same rests with the contractor. However, if the contractor fails to pay, the principal employer is liable to pay it and can later recover the amount from the contractor's payable amount. There are numerous cases supporting the principal employer's responsibility to pay gratuity in case the contractor fails to do so. The attached verdict may help you to better understand this.

Regards, Madhu.T.K