Am I Eligible for Gratuity After 4 Years and 11 Months of Service? Seeking Advice

I have completed 4 years, 11 months, and 23 days in an LTD company governed under the Payment of Gratuity Act 1972. Am I eligible for gratuity or not? I have gone through an article which says that eligibility for the payment of gratuity is 5 years. I also read some articles which state that, as per the Supreme Court, eligibility of 4 years and 8 months of service will be considered a full year if someone has completed 4 years and 8 months or more. Please advise me regarding my eligibility for the payment of gratuity.

As far as my understanding goes, it is 5 years. However, the organization can decide to pay gratuity if anyone has completed 4 years and 8 months. What's the hurry? Just a matter of another week, and you'll be eligible anyway.

Regards,
Sree

Dear Srikanth, Please go through the numerous posts on a similar query on this site, CiteHR. Yes, with 4 years plus 240 days, you are eligible for gratuity.

Regards, Kumar.S.

You are eligible for gratuity if you have completed 240 days in the 5th year. An employee rendering continuous service for a period of 4 years and 240 days in the 5th year will be deemed to have continued in service for 5 years as stipulated by Section 2A of the Act and hence shall be eligible for gratuity as per the judgment of the Madras High Court (1998 LLR 1072).

Thank you,

Regards,
Subrata Singha

Gratuity Eligibility Under the Gratuity Act 1972

The gratuity eligibility service as per the Gratuity Act 1972 is 5 years. However, according to a judgment from the Supreme Court:

"Judgment from Supreme Court: Yes, by virtue of the judgment of the Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal, [(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months, and it is not necessary that he should have completed one whole year's service. As the definition of continuous service in the Industrial Dispute Act and the Payment of Gratuity Act are synonymous, the same principle can be adopted under the act also. Hence, an employee rendering service of 4 years 8 months is considered to have completed 5 years of continuous service under sec.4(2) and thereby is eligible for gratuity."

Eligibility for Gratuity Based on Service Duration

An employee who has served for a period of 240 days in the fifth year will be considered to have continued in service for one year.

Mettus Beardsell Ltd., Madras Vs. RLC(C) 1998 LLR 1072 (Mad)

You are entitled to receive gratuity as per the provisions of the Payment of Gratuity Act. You may refer to the judgment of the Hon'ble Madras High Court, wherein it is clearly mentioned that if an employee renders continuous service for a period of four years and completes 240 days in the fifth year, the employee will be deemed to have continued in service for five years. Consequently, the employee is entitled to gratuity.

Thank you,
Anil Sharma

In my experience, the completion of 240 days of work in the fifth year is enough to be eligible for gratuity. Even though your employer states that you have not fulfilled 5 years, you have the right to challenge it before the Controlling Authority. Begin by making a request to your employer, then send a reminder, and finally submit Form N under the Payment of Gratuity Act to the Controlling Authority.

Thanks

Regards

Gratuity Entitlement Calculation

If an employee has worked in excess of six months in the fifth year, then it will be counted as one year for entitlement and gratuity calculation.

He has to work at least 240 days in the fifth year for entitlement.

Thanks,
Subrata Singha

Advice for Young HR Professionals on Gratuity Eligibility

My suggestion to all young HR professionals is to refer to the books of statutes in the first place, and only in cases where clarity is required, queries may be posted. The relevant provision of the Act is very clear.

Understanding Gratuity Eligibility

Section 4 of the Act requires an employee to render service of not less than 5 years. Section 2A of the Act defines the term 'Continuous Service'. Each year has to be a continuous service of one year, not only the fifth one, in order to qualify for gratuity. The concept of having put in 240 days of actual work under the employer is relevant, whether it is in less than 12 calendar months or a lesser number of months. Therefore, if you have actually worked for 240 days in the first four years (as allowed for interruptions in section 2A) and also in the fifth year, even if not in employment for the full twelve calendar months, you are eligible for gratuity.

Supreme Court Judgment on Gratuity Eligibility

Please get your doubts cleared once and for all. Attached is the Supreme Court judgment regarding 4 years plus 240 days for eligibility to receive gratuity.

Regards,
Kumar S.