Gratuity Eligibility After Employee's Death in Service: How to Navigate This Situation?

One of our employees has passed away within 3 years of service due to ill health. I would like to inquire if the individual is eligible for gratuity and, if so, how to calculate the gratuity amount. I would also appreciate guidance on referring to the Gratuity Act to settle this matter.

Regards,
Sathish Kumar M R
HR, Bangalore.

The answer to your question is - Yes, provided the Payment of Gratuity (POG) Act is applicable to your company. The calculation is as follows:

Gratuity Calculation

Last drawn salary (Basic + Dearness Allowance) per month divided by 26, multiplied by 15 (days), multiplied by 3 years.

You refer to the first proviso to sec 4(1) and the explanation under sec 4(2) of the POG Act for the answer.

Varghese Mathew

Please refer to Section 4 of the Payment of Gratuity Act, 1972, where it is mentioned that the completion of continuous service of five years shall not be necessary where the termination of employment is due to death or disablement. As such, the payment of gratuity shall be payable to the nominee or legal heir, as the case may be. Our respected member, Sh. Keshav Korgaonkar, has rightly suggested the formula to calculate the amount of gratuity in respect of the deceased.

Regards,
BS Kalsi
Member since Aug 2011

Continuous service of a minimum of five years is compulsory to claim gratuity. However, it is not necessary in the case of the death of the employee, in which one year of service is sufficient to claim gratuity. Accordingly, the answer to your doubt is that the employee is eligible for gratuity. His nominee can claim it.

Gratuity Calculation Formula

The formula to calculate gratuity is: Salary (Basic + DA) * Number of completed years of service * 15/26 or 30/52. For the meaning of completed years of service, you can refer to the Factories Act.

Regards,
D. Phani Kumar
DGM- HR
Vasavadatta Cement
(B.K. Birla Group of Companies)
Sedam, Gulbarga Dist,
Karnataka.

I am writing to clarify that one year of continuous service is sufficient to claim gratuity in case of death.

Source: [CiteHR](https://www.citehr.com/458291-gratuity-claim-death-service-3-years.html#ixzz2RXOA073h)

Regards

As per the provisions of The Payment of Gratuity Act, the deceased nominee is eligible to receive the compensation amount as gratuity, given the circumstances of death. For further details, please refer to Section 4 of the aforementioned Act.

Regarding the calculation aspect, Mr. Korgaonkarji has provided a correct explanation. I hope this clarification is sufficient to address your queries.

Thank you,

Regards,
AK SHARMA