Am I Eligible for Gratuity After Resigning from My MNC Job of 5 Years? Seeking Advice

I have been working in an MNC for the last five years, and now I am going to resign with immediate effect, serving a short notice period. My date of joining is 14.03.2008, and I have submitted my resignation on 15.02.2013, with a notice period up to 15.03.2013.

Could you please confirm my eligibility for gratuity and provide your suggestions on the same? According to my contract, I have a one-month notice period.

Regards,
Hari

You will be eligible for gratuity in accordance with the Payment of Gratuity Act. There is no need to be worried as you have completed five years of service with the management. You have fulfilled the tenure required for eligibility for gratuity.

Regards,
R. B. Yadav
Advocate

Are you sure the notice period is included in the 5-year period for gratuity? I recollect seeing many earlier threads in this forum about some companies not counting or including the notice period, i.e., expecting the resignation after the full 5-year term of service.

Regards,
TS

Gratuity Eligibility and Notice Period Impact

As per your statement, you will be eligible for gratuity as you are likely to complete just 5 years.

With regard to resignation, while your notice period is 1 month and you are serving the notice which is less than 1 month, it will not have any impact on your gratuity eligibility. However, towards short notice, your management might deduct the balance day's period shortfalling one month from your settlement.

Good luck in your future endeavors.

Regards,
B.K. Mohanty
Director
Cypress Management Associates
[Phone Number Removed For Privacy Reasons]

Gratuity has nothing to do with the notice period that you serve. It requires the basics, i.e., completion of 5 years of continuous service in the same organization. You're all the more eligible in terms as per Section 4 of the Payment of Gratuity Act, 1972.

Dear Mr. Hari, You have already qualified for gratuity as you have 240 working days in your working tenure in the 5th year. Regarding the notice period, the 240 days are actually working days, and the notice period also includes the working days.

Thanks

There is no relation between the notice period and the mandatory period of five years of service for gratuity. For gratuity eligibility, what is counted is the duration between your date of joining and the date of relieving from the organization. Even if it's a day's notice period, if the duration of service is a full five years, you should be eligible for gratuity.

Hope this helps.

Thanks,

Badri

Disclaimer: Views, opinions, suggestions, etc., expressed by me in this and other professional forums are my own. These, in no way, represent or obligate my present, past, and future employers or associates.

I am Subramanyam, working as an HR Assistant in the manufacturing industry. Could you please advise on how to calculate gratuity and the basis for it?

Thanks & Regards,
Subramanyam
Mobile No: [Phone Number Removed For Privacy Reasons]

Gratuity is calculated on basic salary + DA and is payable only to those who have completed 5 years of service.

Thanks & Regards,
Sumit Kumar Saxena

Gratuity Calculation

As per the Gratuity Act, the calculation is: Basic pay * Number of years served / 15.

For more details, please contact Laxmi at [Phone Number Removed For Privacy Reasons].

Thank you.

Eligibility for Gratuity

To be eligible for gratuity, the first condition is that the employee should have completed a minimum of 5 years of continuous service as per the Payment of Gratuity Act.

Gratuity Calculation

The calculation is as follows: Basic plus DA for the month divided by 26, multiplied by 15, and again multiplied by the number of years of service. The amount arrived at is the gratuity payable to the employee as per the Act.

Regards

You are eligible for gratuity as long as the company considers your attendance correctly. For example, if you were on some leave without pay (LOP) during the 5-year period, they may deduct the LOP period, resulting in less than 5 years of service. Some companies may do this mainly to avoid gratuity payments. Please ensure this does not happen in your case. Otherwise, strictly as per the rules, you are eligible.

Thanks,

Venkat

Bangalore

[Phone Number Removed For Privacy Reasons]

According to the Payment of Gratuity Act, the formula for computation is:

Gratuity Calculation Formula

Total years of service × (15 / total years of service) × (Basic Pay + DA)

Thank you.

In my experience and from your statement, you are entitled to gratuity as you have completed five years of continuous service. Firstly, ask your higher authority in your organization to pay the gratuity after one month of your resignation. Wait for fifteen days, then send a reminder letter claiming the gratuity, stating your date of joining and resigning. After another fifteen days, send a letter stating that this is a notice asking for the payment of gratuity. Then approach the Controlling Authority under the Payment of Gratuity Act, 1972, in your jurisdiction, likely to be the Labour Officer of the Government. Present all your evidence and Form 'N' supporting documents for your claim. I have successfully completed 5 cases in this manner.

Gratuity Calculation

Gratuity will be calculated based on the recently drawn basic salary and the period of service using the following formula:
Gratuity = Last drawn basic salary × Number of years of service × 15/26

Eligibility for Gratuity

Employees must have completed 5 years of continuous service (4 years & 240 days in the 5th year).

Regards,
S.N. Raju. U.

We also had one employee with a Date of Joining (DOJ) of 13-03-2008, and he left on 12-11-2012. Is he eligible for gratuity?

Regards,
Ram

Your employee has put in less than 5 years of service and is hence not eligible for any gratuity.

The employee has completed 4 years and 7 months of service. If the employee has not taken leaves without pay for more than 20 days, then he will be eligible for Gratuity. As per HC decisions, an employee completing 4 years and 6 months is eligible. The last six months are considered as 1 year.

Dear Suhas,

Greetings for the day. I am not aware of the fact you described. Please enclose a copy of evidence to confirm this.

Thanks & Regards,

Sumit Kumar Saxena

Opinion on Gratuity Eligibility

I refer to the Querist's email dated April 13, 2012. The Querist seeks my opinion regarding certain employees who have made a claim for gratuity. These employees have worked for four years and, in the fifth year, have worked for 240 days but have not completed five years of service. The Querist further seeks my opinion on whether the concerned employees, in such a case, would be entitled to payment of gratuity under the provisions of the Payment of Gratuity Act, 1972 (the said Act).

The Querist's kind attention is invited to Section 4(1) of the Payment of Gratuity Act, which is reproduced as under: “Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years:- (a) on...

Regards,
Sandeep Gupta
ADVOCATE
F18 KARKARDOOMA COURT,
KARKARDOOMA
NEW DELHI
Mobile: [Phone Number Removed For Privacy Reasons]
Email: [Email Removed For Privacy Reasons]
April 15, 2012

The employee has completed 4 years and 8 months of service. If the employee has not taken leaves without pay for more than 20 days, then they will be eligible for Gratuity. As per HC decisions, an employee completing 4 years and 8 months is eligible. The last eight months are considered as 1 year if the day calculations total to 240 days in total (Paid Time Off + Actual Working Days + Paid Holidays).

Gratuity Eligibility Calculation

1 year = 240 days.
1 month = 24 days.
If a month contains 30 days on average, then 30 * 8 = 240.

Attribution: https://www.citehr.com/450869-gratui...#ixzz2KwkYRESj

Regards

Dear Sumit ji, there was a typing error in this post: the employee has completed 4 years and 8 months of service. If the employee has not taken leave without pay, as per High Court decisions, an employee completing 4 years and 8 months is eligible. The last eight months are considered as 1 year if the day's calculations amount to 240 days in total (Paid Time Off + Actual Working + Paid Holidays).

Eligibility Calculation

1 year = 240 days
1 month = 24 days
If a month contains 30 days on average, then 30 * 8 = 240.

Attribution: https://www.citehr.com/450869-gratui...#ixzz2Kwjt76E5

Thanks & Regards,
Sumit Kumar Saxena

Though everybody has commented that you are eligible, I am also of the same view. However, you have to check whether your MNC is situated in an SEZ. Some of the labor laws are not applicable to the companies working in SEZ.

Regards,
MS Lenin

You are eligible after the completion of 240 working days in your 5th year, and the notice period is also included in your working days as per Section 4 of the Payment of Gratuity Act, 1972.

He did not complete a 5-year tenure; hence, he is not entitled.

Regards,
BK Mohanty
Cypress Management Associates
[Phone Number Removed For Privacy Reasons]